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Philly says ‘desperately needed’ stimulus funding will help avert painful budget cuts

Officials warned that the federal money won’t by itself solve fiscal problems caused by the expense and economic impact of the pandemic.

Philadelphia Mayor Jim Kenney on March 12.
Philadelphia Mayor Jim Kenney on March 12.Read moreTIM TAI / Staff Photographer

Philadelphia’s city government will receive about $1.4 billion from the massive coronavirus relief package enacted this month, which will help avoid the painful cuts Mayor Jim Kenney had warned about as he prepares his second budget proposal since the pandemic began.

“It definitely will help the city recover faster,” city Finance Director Rob Dubow said Tuesday. “This is desperately needed funding.”

But officials cautioned that the federal money won’t by itself solve fiscal problems caused by the expense and economic impact of the pandemic, which Dubow said could last years.

Officials said last month that they would have to fill a $450 million budget hole for the fiscal year that starts in July. Kenney warned that the city could not rely on savings to help fill that deficit, because the previous budget approved in June already depleted reserve funds to fill a $750 million budget hole.

Now the budget will be “much less painful than we were looking at,” Dubow said, adding that details are still under review.

Of the $1.4 billion for Philadelphia through the stimulus package, half would be available within 60 days, officials said. The money can be spent to cover the cost of responding to the pandemic and to replace lost revenue.

Dubow said that the city still has “structural problems” with its budget as a result of the pandemic and that he will work to spread the federal money out over time.

» READ MORE: Philly is facing a $450 million budget gap and the pain won’t stop there

The city will also qualify for other funding from federal agencies, some of which may be funneled through the state. That includes programs for housing, rental assistance, and the airport.

“Many of the details remain to be worked out at the federal or state level,” said Sarah de Wolf, the city’s recovery officer and deputy finance director.

Kenney, who greeted President Joe Biden at the airport Tuesday as he arrived in the Philadelphia area to tout the stimulus package to voters, will present his proposed budget to City Council on April 15. The mayor typically makes that presentation in early March, but it was delayed in anticipation of the federal relief.

The $1.9 trillion federal legislation also contains funding for other agencies, including an estimated $1.3 billion for the School District of Philadelphia.

SEPTA officials expect to receive $667 million for operating expenses, part of $30.5 billion set aside to help revenue-starved public transit agencies avoid making deep service cuts.

Staff writer Thomas Fitzgerald contributed to this article.