Mayor Jim Kenney will pitch almost $170 million more municipal spending when he delivers his budget address to City Council on Thursday. That’s on trend.
Over the past decade, between fiscal year 2011 and fiscal year 2020, Philadelphia’s annual expenses shot up 32%, from about $3.8 billion to nearly $5 billion.
The bulk of that jump occurred over the past four years, as noted by a recent Inquirer editorial. Breaking it down, Kenney oversaw a 25% increase — about $1 billion — during his first term, while under former Mayor Michael Nutter’s tenure, the budget remained mostly flat.
City revenues have increased nearly on par with spending. In some years, Philadelphia’s intake of funds has outpaced its spending — but not enough to satisfy standards for what a city needs to make it through a recession.
What effect is the soda tax having? It was in early 2016, just a couple months into his first term, that Kenney proposed a tax on sweetened beverages. Originally proposed as a 3%-per-ounce levy, it ultimately passed into law as the city’s current 1.5%-per-ounce soda tax. The Philly beverage tax brought in $192 million through FY19 and is expected to raise an additional $76 million by June 2020.
Overall, between the last fiscal year and the current one, Philadelphia’s municipal spending increased by about $193 million. During that period, revenues increased by almost $255 million.
According to the Mayor’s “Operating Budget in Brief,” the recent hike in expenses came mostly from police department wage and overtime increases, pensions, an increased contribution to the School District and expanded investment into universal pre-k and community schools after soda tax litigation ended.