Four for Friday: Focusing on Philly’s finances

Philadelphia City Council gave initial approval to Mayor Cherelle Parker’s $6.8 billion city budget after several hours of negotiations that began Wednesday and didn’t end until Thursday evening.

Despite the prolonged closed-door negotiations, Councilmembers largely agreed to Parker’s initial proposals and are set to give final approval to the spending package on June 12. 

If you couldn’t keep up with all the goings-on, we’ve got you covered. Here’s your Four for Friday, recapping the biggest parts of the budget:

Bond, Housing Bond

Never say never again: The major obstacle in budget negotiations – Mayor Parker’s request for $800 million in borrowing authority to support her housing initiative that aims to create or preserve 30,000 housing units – was finally approved Thursday. While council members recognized the importance of the issue, some thought the price tag was too steep and that lawmakers should have additional oversight on how the funds are spent. 

But after two days of back-and-forth behind closed doors, an agreement was reached on Parker’s original Housing Opportunities Made Easy, or H.O.M.E., initiative, advancing four zoning bills that are part of the legislative package. In addition to creating and repairing existing housing, the measures also seek to provide rental assistance for low-income individuals, remove vacant and blighted properties and prevent homelessness, among other goals. 

The Parker administration said it expects the redevelopment authority to borrow two tranches of $400 million, with the first occurring in the fall and the next two years later. If given final approval, City Council and the City Controller’s Office would have oversight over how the bond proceeds are spent under the initiative. 

Collection of tax cuts

Parker also pushed through her original schedule of cuts to the wage tax and the business income and receipts tax, another potential sticking point. 

The mayor’s proposals were adopted without amendment, setting up her plan to lower the gross receipts rate from 0.1415% to 0.141% and net income tax from 5.81% to 5.71% next year, with annual cuts continuing through 2039. The plan would also cut the wage tax from 3.75% to 3.74% next year and lower it to 3.7% by 2029. 

Safety, security and SEPTA

Parker applauded City Council’s work and planned investments in a variety of areas, including public and street safety, as well as support for small businesses and the struggling SEPTA system. 

Among the notable investments are a $67 million allocation for a new forensic science center for the police, a $350 million investment in capital programs for street paving and ADA compliance, and a $30 million investment over six years for Vision Zero. Additionally, the city is allocating $716 million for SEPTA operating support and $76 million for SEPTA capital spending. 

Federal shadow

Throughout the negotiation process, discussions on spending and taxation included concerns about the uncertainty of federal funding under President Donald Trump’s administration. 

Trump has repeatedly threatened to cut federal funding to so-called sanctuary cities, including Philadelphia, that decline to assist federal immigration enforcement. And according to the Philadelphia Inquirer, Councilmember Curtis Jones said it’s likely that the threat of federal aid cuts played a role in Parker and Council President Kenyatta Johnson’s decision to not take the tax cuts a step further, as some councilmembers suggested. 

Council will meet again next week for a final vote on the spending package, which needs to pass before the start of the next fiscal year on July 1.