Jun 23, 2022 - News

Philadelphia City Council approves $5.8 billion budget

Illustration of Philadelphia City Hall with lines radiating from it.

Photo illustration: Allie Carl/Axios. Photo: BasSlabbers/Getty Images

Philadelphia legislators approved a $5.8 billion budget, along with tax cuts, on Thursday, even as the pandemic continues to drag down revenues.

Driving the news: The city's third pandemic budget, which doesn't include property tax hikes, boosts spending by nearly 11% over last year's plan, outpacing expected year-over-year revenue increases.

  • Several departments, like police and the Free Library, will see their spending rise under the newly passed budget, and companion legislation will bring property, wage and business tax relief.
  • Officials will inject at least $335 million in federal pandemic relief aid into the budget to buoy up revenues.

The big picture: With at least half a dozen Democratic city legislators potentially weighing a bid for mayor next year, the budget represents one of the last opportunities to put their stamp on city finances before the May 2023 primary.

Between the lines: No candidate has officially entered the mayoral race yet. Philly elected officials must resign to run for another office, per city law.

  • All 17 members of City Council are also on the ballot next year.

What to expect: The tax relief measures passed along with the budget include:

  • Small cuts to both Philly's wage tax, the largest revenue generator in the city, and Business Income and Receipts Tax.
  • An increase to the city's homestead exemption, which reduces the taxable portion of a property's assessed value, will nearly double to $80,000, saving the average homeowner approximately $1,119 on their tax bill, according to Councilman Kenyatta Johnson.

Of note: Many property owners have already seen their property taxes spike this year following the city's first tax assessment since tax year 2020.

What else: Violence prevention spending will grow to more than $200 million, up from about $155 million last year, according to Mayor Jim Kenney's administration.

  • The Police Department's budget, the largest in the city, will balloon to $788 million. That includes about $5 million for its forensics program and $250,000 for recruitment efforts amid an officer shortage.
  • The plan also includes $1.8 million for security cameras near schools.

Flashback: The increase in the police budget diverges from previous years when Philly officials effectively kept it flat in response to protests that erupted over George Floyd's murder in Minneapolis in 2020.

  • Police were originally slated about $729 million for the current fiscal year.

Meanwhile, the Free Library's budget will increase to $58.4 million, up more than $13 million over last year.

What they're saying: Mayor Jim Kenney said in a released statement that the budget focuses on core city services while maintaining Philadelphia's long-term fiscal health and reducing racial disparities among residents.

The other side: Councilmember Alan Domb, who strongly hinted at a potential bid for mayor, said the budget doesn't go far enough, slamming Kenney for failing to address public safety, the opioid crisis, low police staffing levels, and more.

  • "We deserve better. Philadelphians deserve a leader who will take action and who will be a positive force for change. A leader who actually wants the job," Domb said.

What's next: The budget and companion legislation now go to Kenney, who's expected to sign them.

  • The new fiscal year begins July 1. Legislators are on break until mid-September.

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