City Councilmember Allan Domb wanted Philadelphia to overhaul its tax structure. Instead, lawmakers are set to approve a minuscule wage tax cut.
Councilmember Kendra Brooks voted against last year’s budget, saying examples of police brutality like the killing of George Floyd “called into question whether the [Police Department’s] budget is justified.” This year’s budget actually increases police spending.
And Councilmember Maria Quiñones-Sánchez wanted Philadelphia to “change course to avoid going back to an unfair ‘normal,’ ” in part by redesigning the way health and human services agencies work with nonprofit service providers and community organizations. Instead, the budget for the fiscal year starting July 1 largely preserves that status quo.
None got what they wanted from the tense and protracted budget negotiations that wrapped up last week. But like all but one of their Council colleagues, they voted to advance the $5.27 billion spending plan that is headed to final approval Thursday.
The pandemic and the city’s gun violence crisis, along with an influx of $1.4 billion in federal aid, led to calls from various constituencies to adopt a budget that was “bold” or “transformative.” But the deal that emerged from negotiations looks a lot like the one Mayor Jim Kenney proposed in April — and a lot like budgets the city adopted in the years leading up to the pandemic.
How did Philadelphia end up with a largely status quo budget despite such political pressure to make something more of an extraordinary moment?
One reason is that those calling for change were often pulling in opposite directions.
Domb and other business-friendly lawmakers wanted significant tax cuts designed to attract potential employers. Progressives like Brooks wanted to leave rates unchanged, if not raise them, to maximize revenue for needed services. Council ended up approving a slimmed-down version of Kenney’s proposed wage tax cut, while discarding measures that would have cut business taxes.
Domb blames political pressure on members who may have been open to tax cuts but were afraid to cross activists lobbying them to raise taxes on the rich. Progressive groups held rallies outside City Hall during the negotiations, and some demonstrators even staged a brief sit-in at the mayor’s office.
“What happened here is that politics got involved,” Domb said. “And people saying this isn’t the year? It’s never been the year. If this isn’t the year where we can make transformative change … tell me when that year will be.”
Another reason for the inertia is that neither Kenney nor Council President Darrell L. Clarke was among those pushing for radical change.
While the Kenney administration focused on ensuring the budget left the city’s finances in a good position going forward, Clarke worked primarily as a consensus-builder, rather than a member pushing his own agenda, said Mustafa Rashed, a City Hall lobbyist.
“[Clarke] says, ‘I’ll find out what my members want’ and tries to get them” to agree, Rashed said. “I’ve never seen him do it the reverse order and say: ‘This is what I want. I’m going to drag everyone there.’”
On taxes, Clarke didn’t see a majority for a significant cut, and didn’t push to create one.
“There will be a time and place for more discussion and action on tax reform,” Clarke spokesperson Joe Grace said in a statement. “According to a consensus in Council, however, this budget was not that time, when there are so many urgent needs of Philadelphia residents that need addressing.”
When he unveiled his budget proposal in April, Kenney emphasized the need for the city to get back onto solid financial ground by restoring some, but not all, programs cut the previous year, realigning city services to address racial disparities, and resuming a schedule of small annual tax cuts.
“The administration is proud of this budget deal and appreciates the fruitful negotiations with City Council,” Kenney spokesperson Deana Gamble said in a statement, calling Kenney’s first initial proposal “pragmatic yet bold.”
Kenney had proposed spending only $575 million of the $700 million in federal stimulus aid available to the city this year. And while some members pushed to use it all, the final deal taps the same $575 million.
Even some causes with broad support on Council didn’t see dramatic movement. For instance, 13 Council members, a veto-proof majority, called for $100 million in new spending on gun violence prevention efforts outside traditional policing. The final deal, however, includes only $68 million more. And even much of that money is a repackaging of programs already funded in Kenney’s initial proposal. Only $25.6 million of it was added during negotiations.
“When it comes down to the specific things we were asking for, $100 million is just a drop in the bucket when we’re looking at $5 billion total,” said A’Brianna Morgan, an organizer for the progressive group Reclaim Philadelphia who participated in the sit-in.
While liberal groups pressured lawmakers during the negotiations, Morgan said Reclaim opted not to ask members to vote against the final deal when it’s also waging other policy fights.
“We have to weigh the risk and benefits for anytime we’re trying to say, ‘Oppose this,’” Morgan said. “Will picking this fight right now when we are extremely burned out make sense?”
The only vote against the budget in committee came from David Oh, one of Council’s two Republicans. Members can still vote against final passage, as Brooks did last year. But approval Thursday is all but guaranteed.
Brooks said the budget deal, including the rejection of most of the proposed tax cuts and increased spending for priorities like eviction prevention, represents “a vast improvement from its original incarnation.”
“However, I do have concerns that it still falls short of adequately investing in our public services at a time when our communities are struggling more than ever,” she said in a statement. “My question is: Are we using that historic sum of money to improve the lives of Philadelphians with this budget? If not, why? And if not now, when?”
For some, a no-frills budget isn’t a bad thing. Harvey Rice, executive director of the Pennsylvania Intergovernmental Cooperation Authority, the state body that oversees the city’s finances, said it was wise to focus on righting the ship this year before considering bigger plans next year.
“While some people might say that the city budget right now isn’t transformative enough, they’ve got to keep in mind that we were facing a $450 million deficit,” Rice said of the city’s predicament before Congress approved the sweeping pandemic aid earlier this year. “We need to keep the city services that people expect, keep them being delivered, and still address the concerns that the administration did prior to the pandemic.”