Mayor Jim Kenney released Friday a revised budget in the midst of the coronavirus pandemic. His revised budget calls for a nearly 4% hike in the city’s property tax, a 4.5% increase in the parking tax, and raising the non-resident wage tax about a half-a-percent.
It also calls for hundreds of layoffs by eliminating full-time, part-time, seasonal and temporary positions, and salary cuts to most exempt employees.
“This budget pares city services down to the most essential, imposes layoffs on hundreds of workers, and reduces or eliminates some programs that are simply no longer affordable,” Kenney said in a recorded address to the city. “To those who are directly impacted by this workforce reduction, I pledge to you that we will offer resources and support to help you through this,” Kenney said.
The Major asked residents to understand and accept the consequences generated by the current health crisis.
“This is not what I want for our residents, and I understand if this leaves many of you angry. Frankly, I’m angry too. But after that anger fades, we must remember exactly what we are dealing with. What we have is both a pandemic and an economic catastrophe,” he said.
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The Office of the Department of Finance projects that without such changes, the city would face a $649 million dollar déficit in the coming year.
“Even as our operating departments rushed to respond to the virus, I directed our finance and budget directors to start the budget process all over again,” Kenney said. “They developed a new plan that addresses the unfortunate economic reality we now face.”
The result is a new budget that proposes General Fund spending to be $4.9 billion, a $341 million decrease over the original $5.2 billion budget. It reflects the priorities listed above by guaranteeing the following:
- No police or fire layoffs.
- No reduction in emergency medical services.
- All fire stations, health centers, recreation centers, and libraries will remain open.
- PHLpreK and Community Schools will be maintained at current funding levels.
- Weekly residential trash collection and single-stream recycling will continue, with some adjustments.
Using local and federal funding, the City will prioritize keeping Philadelphians in their homes with support for basic systems repairs, preventing mortgage foreclosure and support for renters.
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There is also a wide range of reductions, revenue enhancements, and increased efficiencies, including:
- A reduction in overtime across government, including police and fire department overtime.
- Reduced investment in vehicles, technology, and other equipment.
- Reduced hours and programming at libraries and recreation centers.
- Reduced support for special events, non-profits, and the arts.
- A reduction in the use of local tax dollars for economic and workforce development, as well as affordable housing and homelessness prevention and assistance. This is possible since federal funds have been approved to support those areas, including direct assistance to businesses, individuals, and unemployed workers.
- Small increases to certain licenses and permit fees, and an increase in the cost of commercial trash pick-up.
- A delay in scheduled reductions of business tax rates and wage tax rates for Philadelphia residents.
- Rate increases for the non-resident portion of the wage tax and for the parking tax.
- Elimination of the one percent discount for paying Real Estate Taxes early.
The revised spending plan also proposes an increase in the rate of the Philadelphia School District portion of the real estate tax.
The City Council must hold a hearing on the spending plan before the new fiscal year starts on July 1.
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