Philadelphia Mayor Michael Nutter presented his state of the city address to members of the Union League Wednesday.

Nutter, who said the city is doing well, urged continued investment in education.

"We must continue to invest in our students because, if children are not reading at grade level in third or fourth grade, they will struggle through middle school and more than likely drop out of high school,” Nutter said. “And in many instances, they will end up with us in a different circumstance, over with (Police) Commissioner Ramsey or (Prison) Commissioner Giorla in our prison system."

Nutter added that shortfalls in the state, federal and school budgets are problems the city must overcome.

"The commonwealth is facing approximately a $4 billion deficit, the federal government is facing a $1.7 trillion dollar deficit and the school district is facing a $629 million deficit," he said.

The mayor said these deficits could seriously hurt the city.