PHILADELPHIA – Mayor Jim Kenney issued a statement today following approval by City Council’s Committee of the Whole of the Fiscal Year 2021 Operating Budget and Capital Program.

“I want to thank all members of City Council, under the leadership of Council President Darrell L. Clarke, for stepping up as true partners throughout the most difficult budget process I have ever experienced. They approached this work with a level of seriousness and dedication that matches the gravity of the situation facing Philadelphia, both in terms of the COVID-19 pandemic and our shared desire to work toward social justice and racial equity.

“It is extremely disappointing that at this time we are not able to move forward with some of the crucial investments I proposed back in March, before the pandemic and resulting economic downtown were felt in Philadelphia. And it pains me that this budget reduces some City services and eliminates hundreds of jobs. Still, we have prioritized core services, protected our most vulnerable residents, and maintained our financial flexibility to enable a quick rebound.

“In short, thanks to Council’s leadership, I believe this budget will accomplish the goal I laid out on May 1: we will keep all Philadelphians safe, healthy, and educated while maintaining core municipal services that our residents rely on daily. Just as importantly, the most difficult decisions were made through a lens of racial equity. The budget intentionally limits the impact of service delays or cuts on people of color, who are disproportionately impacted by the virus and already suffering from decades of systemic inequality. I look forward to final approval by City Council on June 25.”

Budget Revisions: The Operating Budget and Capital Program approved by Council’s Committee of the Whole today include several changes of the proposal submitted to City Council on May 1. Among them:

• Anticipating a $749 million revenue shortfall rather than the original $649 million projection, this spending plan realizes additional savings through a restructuring of the Pension Fund’s General Obligation Bond, and through further reductions in the projected fund balance.
• The operating budget reduces the Police Department’s budget by $33 million, bringing it below the FY20 level.
• The operating budget reduces the Fire Department’s budget by $5.8 million, bringing the PFD budget to the FY20 level.
• The PPD and PFD reductions allow the City to provide additional funding for housing, arts, adult education, and workforce development, including:
  • $20 million to the Housing Trust Fund.
  • $1 million to the Cultural Fund.
  • $1.4 million for adult education.
  • A full restoration of City’s funding to the African American Museum ($350,000).
• The spending plan includes revenue enhancements that limit racially disparate impacts and are likely to produce the expected revenues without significant implementation costs or delays due to a need for state approval.
  • The increase in the Parking Tax would expire after one year, to generate an additional $10 million in FY21.
  • The increase in the Non-Resident Wage and Net Profit Tax remains as proposed, bringing the rate to 3.5019%, still below the rate for Philadelphians (3.871%). This change is paired with a decision not to seek a reduction in the Resident Wage Tax rate, as had been previously proposed.