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Read the news of the day in less than 10 minutes — not that we’re counting.
The last budget of Mayor Jim Kenney’s tenure will carry forward last year’s emphasis on violence prevention, recreational infrastructure and staffing, and reliable basic services.
Included are proposed cuts to the city’s wage and business taxes that would drop them to the lowest rates seen this century, even as officials project they’ll be operating in the midst of a slight recession, from about now to the third quarter of this year.
The city’s fiscal year starts July 1, so a budget has to be approved by the end of June. After the mayor presents a proposal, City Council holds hearings, negotiates changes, and eventually votes on the final document.
All together, the proposed FY24 spending plan equates to about $6.1 billion, up from last year’s $5.6 billion proposal.
Here are seven things to know about Kenney’s final budget, plus the schedule of Council hearings in case you want to provide testimony.
More cuts to wage and business taxes
The Kenney administration is proposing lowering the wage tax to 3.7565% for city residents, and dropping the net income portion of business taxes to 5.83%.
Each of those would be the lowest rates in decades, and build on reductions adopted for the current fiscal year, which saw the wage tax reduced by about 0.05 percentage points and the business tax dropped by 0.21 percentage points.
The wage tax is far and away the city’s biggest levy — it “really helps drive our budget,” said city Finance Director Rob Dubow. But even with the lowered rate, officials are projecting a nearly 4% jump in returns for a total of about $1.8 billion in revenue.
Under the proposed cuts, the business tax would generate about $20 million less, a revenue drop of less than 1%, according to city projections.
Suspending property assessments
The city won’t continue work to reassess and reevaluate local land and properties this year, according to officials.
Property assessments determine how much property tax owners pay into the city’s General Fund. These assessments have been completed on an irregular schedule recently; the round of assessments in 2022 was the first in three years.
Once an assessment is done, homeowners have the right to challenge with what’s called a “first level review.” There have been a huge number of those this round, as valuations doubled in some areas, and Philly extended the deadline to file a review multiple times.
The backlog is so big it doesn’t make sense to do new assessments this year, per Finance Director Dubow.
“The folks at [the Office of Property Assessment] are working on those reviews and the time that they would have been putting into revaluation that would have come out in a month or two has been spent on those first level reviews,” said Dubow. “We will continue doing revaluation starting next year.”
$9M boost for 6-day citywide library service
After years of sparse scheduling and a nearly total absence of Saturday service across the Free Library system, the budget proposal includes funding officials say would sustain six-day service at all library branches.
Current estimations say $61.8 million of general fund spending will go towards the Free Library this year. The proposed amount of general fund spending for FY24 is around $71 million.
Staffing those extra days of service is a separate issue.
“Obviously, it’ll take some time to get staffed up, but the resources are there to enable them to be open six days a week,” said Budget Director Marisa Waxman.
This comes on the back of a notable increase in funding in FY23 and the recent reintroduction of six-day service at 10 locations around the city. Still, the Free Library system has not been able to accomplish its goal of “stable five-day service.” Wider library services were highlighted as a community priority during budget feedback sessions run by the city.
Education at all levels
The proposed budget increases funding for education from pre-K to college, an ever-present focus of Kenney’s during his time as mayor.
One measure is funding operation costs for the PHLpre-k program, so that it can afford to service 950 additional students, bringing the total number of seats in the program to 5,250.
The city’s yearly contribution to the school district would be raised by $12 million under the new proposal, which would result in a $282 million contribution over five years.
A $51 million increase for the Community College of Philadelphia’s Catto Scholarship, a collaboration between the college and the city created during Kenney’s term, is the postsecondary part of the proposal.
New police forensics lab
Kenney proposes adding millions in funding for modern crime-solving tools, with $65 million over five years going toward a new forensics facility, new equipment, and staff.
Local law enforcement’s forensic capabilities, or lack thereof, have been a point of focus in discussions of the Philly Police Department’s clearance rate, aka how many crimes get solved.
A $5 million boost for forensics tech in the FY22 budget was described as “a drop in the bucket,” but a recent tranche of federal support allowed for the bigger plans. This year would see $22.5 million of that $50 million in federal funding spent toward the forensics lab.
Localizing surveillance analysis for PPD hotspots
The proposal includes added support for the analytical aspects of Operation Pinpoint — part of the Police Department’s violence prevention strategy — to the tune of $9.2 million over five years. These funds would build out of PPD’s surveillance capacity through hiring more monitors and civilian analysts, and setting up new infrastructure.
“It’s putting up three Crime Information Centers around the city within certain hotspot zones,” Managing Director Tumar Alexander explained.
Current video programs, like the Real Time Crime Center, are centralized at the Delaware Valley Intelligence Center — the region’s “fusion” surveillance center created post-9/11, which fosters collaboration between local, state, and federal law enforcement.
The new Crime Information Centers would decentralize some of these operations.
“This is trying to get those [monitoring] services out to some of those hotspot areas where officers, supervisors, and commanders can be able to access that rapidly,” said Alexander.
Efforts to solve city staffing crisis
As of December 2022, the city’s vacancy rate sits at 18%, a grim number that officials aim to lower through $1.8 million in new funding for the Office of Human Resources to boost hiring, and a number of incentives for city employees. For instance, the budget proposal includes $9 million for free SEPTA access for government workers.
Staff shortages have contributed to the city’s unprecedented budget surplus this fiscal year, said Dubow, the city finance director.
“Part of what’s giving us an increased fund balance over time is the increased number of vacancies as we have a hard time recruiting and retaining employees,” he said.
Unspent funds are being put to use, he added. They’ve gone to a variety of projects, including $10 million for Rebuild in a capital budget midyear transfer ordinance, to act against inflation affecting their projects.
The new money put towards hiring and retaining employees will take time to impact current trends, but the aim is to see a sharp reduction in unstaffed positions over the course of the fiscal year. Dubow said the city is trying to get the vacancy rate down to 3% to 4%.
City Council budget hearing schedule
Council debate on the budget kicks off on Tuesday, March 28, with city officials presenting the 5-year and capital spending plans. After that comes a series of department-specific hearings, including:
- March 29: Tax bills (including public testimony on tax legislation)
- April 3: Licenses and Inspections, Streets Department
- April 4: District Attorney’s Office
- April 11: Police Department, Department of Public Health
- April 18: Commerce Department, Office of Property Assessments, Board of Revision of Taxes
- April 19: Mayor’s Office of Children and Families, Parks & Recreation, Department of Human Services, Free Library
- April 25: City Commissioners
- April 26: Public testimony on the Budget
- May 2: School District of Philadelphia
- May 3: Public testimony on the School District
If you want to speak at one of the hearings, you need to let the city know by 3 p.m. on the day prior. Email Budget.Hearings@phila.gov or leave a message at 215-686-3407 with your full name, callback number, and the topic you want to address.