Philly passed a $5.8 billion budget. Here are 7 big takeaways.
The final budget, which passed unanimously and goes into effect on July 1, puts heavy emphasis on public safety amid a historic wave of gun violence.
A week after coming to a compromise deal with Mayor Jim Kenney, Philadelphia City Council on Thursday signed off on a $5.84 billion budget for the upcoming fiscal year, about $500 million more than the current budget.
The final budget, which passed unanimously despite dissent from some members over tax cuts, puts heavy emphasis on public safety amid a historic wave of gun violence. But lawmakers earmarked millions for other projects and initiatives as well.
What can taxpayers expect from City Hall’s pocketbook in the coming year? Here are some of the big takeaways from the budget deal, which takes effect July 1:
Easing the real estate tax pains
Much of the budget negotiations focused on taxes. Council members sought to soften the impact of rising real estate assessments by increasing the homestead exemption for the property tax from $45,000 to $80,000, and increasing funding for programs that help low-income families and seniors stay in their homes amid rising taxes.
The final budget includes $2 million for education efforts to inform homeowners about assessment changes ahead of tax season.
Lawmakers also made cuts to the wage and business taxes. The wage tax rate will go from 3.8398% to 3.79% for city residents, and from 3.4481% to 3.44% for people who work in Philadelphia but live outside the city limits.
The net profits portion of business income and receipts tax is set to fall from 6.2% to 5.99%.
“We struck a deal that may appear like minor progress but it is truly monumental,” Councilmember Allan Domb, who played a key role in the negotiations, said in an email to supporters. “We have an agreement in place as part of a broader budget package that will lower both the wage tax and the business income and receipts tax bringing real relief to workers and businesses at a critical time.”
Police budget gains millions
Two years after effectively freezing the Police Department’s budget in response to protests against police brutality, the new budget is adding nearly $30 million to the department’s annual allocation, which will sit at nearly $800 million, by far the most of any city agency.
Kenney had initially proposed adding $23.7 million to the department’s allocation, most of which is to cover union-based pay raises as well as upgrades to officers’ cell phones and laptops.
Council added $6.2 million on top of that. The body earmarked $5 million for upgrades to the city’s long-neglected forensics lab. And it added $250,000 for police recruitment as the department has struggled to fill hundreds of open positions amid a nationwide shortage of cadets, plus $950,000 for staff to review surveillance cameras.
More funding for antiviolence programs
The Kenney administration last year, under pressure from City Council to address the city’s gun violence crisis, agreed to a plan to steer what it called $155 million toward antiviolence programs outside traditional policing.
Most of that money was not new, but it did include notable investments in programs that engage young people and a new grant program for grassroots organizations.
Council and the administration aren’t touting a round number this year. Still, they agreed to a deal that allocates funding to many of the same programs as last year, and it includes additional investments like funding for a pilot jobs program and more community grants.
On top of a $184 million investment proposed by Kenney, Council added several other line items, including more than $4 million for security-camera installation and $500,000 for the city’s new Office of the Victim Advocate.
Millions to combat raging quality-of-life issues
During last-minute negotiations with Council last week, lawmakers also agreed to add millions to improve neighborhood conditions that have deteriorated throughout the pandemic.
The budget deal includes $2 million to tow abandoned vehicles, $2 million to improve streetlights, and $1 million to combat short dumping, plus boosts for other basic city services. Over the last year, the city’s backlog of abandoned-car complaints grew to more than 34,000, while a lapsed contract with a streetlight maintenance vendor left potentially thousands of city streets in the dark.
Council requested additional funds for cleaning and sealing vacant properties, as well as $1 million for pothole repair. Lawmakers touted the additional funds as a commitment to restoring basic city services in the city’s hardest-hit neighborhoods — but also as an antiviolence measure, citing research that links gun crime to quality-of-life issues like blighted buildings and junker cars.
Rec centers, libraries get boost amid gun crisis
In addition to a modest increase proposed by Kenney, City Council tacked on $2.5 million for the Department of Parks and Recreation to open about 50 recreation centers with gymnasiums for an additional two days per week. Currently, recreation centers are not regularly open more than five days a week.
The $2.5 million is enough to fund about 50 full-time positions. Filling them will take time amid a broader shortage of public-sector workers, but the city hopes to have at least some of the centers open by fall.
And two city parks got a last-minute infusion. Councilmember Cindy Bass on Thursday introduced an amendment that adjusts the capital budget to allocate $7 million to the Jerome Brown Recreation Center and $3 million to Barrett Playground, both of which are in Bass’ North Philadelphia district.
The funding was agreed to after Bass, who chairs Council’s Parks, Recreation and Cultural Affairs Committee, threatened to hold up Kenney’s citywide parks revitalization plan because she felt her district wasn’t getting enough funding. She held the vote Tuesday and the spending plan was approved.
The Free Library of Philadelphia will also see a significant funding boost that its leadership has called historic. Its $58.4 million allocation under the plan is about $15 million higher than its budget last year.
While some advocates and activists wanted to fund the system so that branches could be open seven days a week, officials say the bump will only help the system “stabilize” its service at five days. Since the pandemic, library branches across the city have had fluctuating hours due to staffing shortages – some are open only four hours a day a few days a week, and the system says hiring hundreds of workers will take months.
$15 million in new rental assistance funds
Council also added a $15 million allocation for rental assistance. Council and Kenney’s administration said they agreed to commit a total of $30 million over the next two years, which will flow through the Philadelphia Housing Development Corp.
PHDC administered an emergency rental assistance program during the pandemic that stopped accepting applications in January when its funding dried up. Through four phases since May 2020, PHDC distributed nearly $250 million to almost 39,000 households.
The last budget for some lawmakers?
The Democratic primary for next year’s mayoral race is less than a year away, and as many as five Council members may throw their hats in the ring.
Because Thursday was Council’s last session before summer break — and because Philadelphia’s Home Rule Charter requires officeholders to resign from their city jobs in order to run for a different post — the final meeting could have been the last time this group of lawmakers met as one body.
Domb, who has said he is considering running for mayor, prepared remarks for the occasion that sounded a lot like a stump speech.
“As we close out this Council session, I’m feeling reflective — especially since this could be the last time I speak before City Council in my current position,” Domb said. “While we put forth a balanced budget that provides support for those in need, frankly it doesn’t go far enough. Too many people across our City still can’t get a good night’s sleep, whether it’s because they’re worried about supporting their families, or the safety of their loved ones as they hear the sounds of gunshots echo through the night.”
Other potential mayoral candidates include City Controller Rebecca Rhynhart; grocer Jeff Brown; and Council members Cherelle Parker, Helen Gym, Derek Green, and Maria Quiñones-Sánchez.
Correction: An earlier version of this story misstated the amount that the budget has grown. Next year’s budget is about $500 million more than this year’s.