PHILADELPHIA — Tomorrow, Mayor Jim Kenney will deliver to Philadelphia City Council the Fiscal Year 2023 operating budget, capital program and Five Year Plan that will serve as financial blueprints for the city’s continued economic recovery more than two years after COVID-19 first hit Philadelphia. The documents can be found online.

“As you review the plan, know that every program, policy and funding priority was made with one thing in mind: how can we move all of Philadelphia forward and spur a fast, equitable recovery in every zip code and neighborhood of our great city,” said Mayor Jim Kenney. “This plan will move Philadelphia forward by enhancing core City services, accelerating inclusive economic growth across the city, maintaining the City’s long-term fiscal health, and continuing to reduce racial disparities so that race is not a determinant of success, and every single person that calls Philadelphia home can thrive. This budget demonstrates the determination to make our city a better place to live, work, and visit.”

An integral part of our Five Year Plan is the roughly $1.4 billion the City is receiving from the American Rescue Plan (ARP). This one-time federal relief helps ease the effects of projected revenue declines stemming from the pandemic.

“The support from the ARP represented a significant turning point for Philadelphia, not just in the fight against the pandemic but for the future of our great city,” Mayor Kenney will say tomorrow in his budget address to City Council. “However, the funding we’re receiving from the ARP is less than the actual need over five years in order to fully fund service needs and priorities and keep city finances on a stable, sustainable path. This fact requires us to make difficult and strategic choices.”

Despite that caution, the Mayor proposed ambitious investments in areas of education, violence prevention, economic development, and quality of life for Philadelphians. Highlights of the plan include:

Investing in Quality Education:

• School District of Philadelphia — Mayor Kenney is building on the historic commitments to public education that he has made over his two terms by investing nearly $1.4 billion over the FY23-27 Five Year Plan in the School District of Philadelphia, in addition to local tax revenues that support the District. FY23 includes $270 million in funding for the School District of Philadelphia.
• Community College of Philadelphia and Catto Scholarship — This plan invests more than $50 million in the Community College of Philadelphia in FY23, with $10.8 million dedicated to the Octavius Catto Scholarship. This program enables first-time students to attend college tuition-free, and with the supports they need like food, books, and transportation stipends to successfully earn their degree. Today, over 500 students have enrolled through this opportunity.
• Free quality pre-K and Community Schools — This plan continues the expansion of the PHLpreK program and Community Schools, supported by revenue from the Philadelphia Beverage Tax. Since launching in 2017 PHLpreK has benefited more than 10,000 children and counting. This plan proposes 300 new slots to be funded this year, for a total of 4,300 slots, providing free and high-quality early learning services that lay a critical foundation for children and families. Three new Community Schools in FY23 will bring the total number to 20 schools that provide community-based wraparound supports that serve a wide range of needs for students, families, and communities.
• Free Library — Libraries are essential community assets offering information, connection, and educational programs to all residents, and this plan adds $48 million over five years to our investment in the Free Library, bringing the total five year investment to $285 million.
• Digital equity — The City worked with a number of partners to launch PHLConnectED—a program that has provided over 21,000 free internet connections for student households. Earlier this year, we released a 5-year Digital Equity Plan, which lays out our core strategies to build on our successes and further improve access and affordability of broadband internet and devices.

Keeping Residents Safe:

This Plan makes critical investments in the Roadmap for Safer Communities, the City’s violence prevention plan. With the full set of violence prevention investments—including long-term investments—we’re directing more than $184 million to help make our communities safer and reduce violence, an 18.5 percent increase over FY22. Some of these investments include:

• $6 million to expand evidence-based programs that target those most at risk of being a victim or a perpetrator of gun violence and provide connections to services, treatment and employment. This includes investments for the Group Violence Intervention program, the Community Crisis Intervention Program, new behavioral health supports, and the implementation of a local version of READI (Rapid Employment and Development Initiative) that will help decrease shootings among those at highest risk of gun violence.
• An additional $12 million for the Anti-Violence Community Partnership Grants, which funds community-based organizations that are focused on reducing violence through trauma-informed healing and restorative practices in the neighborhoods most affected by violence. Our total investment in this program alone has been more than $32 million over the last two years.
• More than $3 million to enhance the Police Department’s ability to solve violent crime and modernize police tools with forensic upgrades and policy mobility, which will facilitate the use of enhanced forensic analysis in every homicide.

• $1.5 million to support community engagement, homicide and non-fatal shooting reviews, planning, and improved data analytics to ensure anti-violence programs are addressing the causes of violence, reaching those who need it most, and service connections are successful.
• $800,000 for violence prevention programs and supports focused on delinquent youth within the Juvenile Justice system including restorative justice programming and $1.5 million for two additional Community Evening Resource Centers for a total of four Centers operating from 7 p.m. to 2 a.m. to support Philadelphia youth who are out after a curfew.

Growing an Inclusive Economy and Thriving Neighborhoods:

To increase efficiency, the FY23-28 Capital Budget for the Streets Department programs $27 million for paving/reconstruction of streets and ADA ramps in FY23 and $173 million over the life of the Capital Program. The FY23 Capital Budget also allocates $2.1 million for traffic control improvements and $17.7 million for the full FY23-28 program, in support of the Vision Zero initiative, to make the city’s streets safer for all users. Further investments include:

• Street sweeping and cleaning — The FY23 budget includes funds for 60 miles of street paving and further expansion of street sweeping. The street sweeping program will expand to 8 new neighborhoods for a total of 14. The Streets Department will also get $2 million to stand up additional crews to respond to illegal dumping.
• Investing in infrastructure — The implementation of the federal Bipartisan Infrastructure Law should bring more than $1 billion for roads, bridges, transit, water infrastructure, and broadband access to the City, and thousands of new jobs. The Plan includes a $20 million investment in FY23 across twelve City agencies ($116 million over the FYP) to prepare for the Bipartisan Infrastructure Law so that Philadelphia can compete successfully for federal dollars and deliver high-quality infrastructure projects that transform communities and make real the commitment to improving racial equity and growing wealth in Black and Brown neighborhoods. The Capital Budget allocates $60 million for local matches to federal dollars.
• Public transportation — The FY23-27 Five Year Plan increases funding of SEPTA by $9 million a year for a total of $100 million a year, a formula-based required contribution to leverage matching funds. The City will continue to work closely with SEPTA to deliver the Philadelphia Transit Plan, A Vision for 2045, and to maximize the impact of the federal Bipartisan Infrastructure Law for Philadelphia.
• Maintaining and improving public spaces — The FY23 Budget invests $2.7 million in FY23 ($10.5 million over the life of the Plan) in Philadelphia Parks and Rec (PPR). These investments will allow PPR to expand hours and improve programming in the neighborhoods that need it most. The FY23 Budget also includes investments to further support progress in the Rebuild program as it reaches full stride in implementation and prepares for a high volume of projects transforming recreation centers, parks and libraries over the next several years.
• Small businesses and commercial corridors — This plan dedicates $500,000 for a new Emergency Grant Program and $7 million for the PHL Taking Care of Business Corridor Cleaning Program, which maintains neighborhood corridors as welcoming and attractive places, while providing accessible job opportunities.

Keeping Philadelphians Healthy and Housed:

• Addressing the opioid crisis — FY23 will see the continuation of the critical work of the Opioid Response Unit to spearhead our multi-departmental effort and strengthen the City’s ability to address the ongoing opioid crisis across the city. We will invest $5.5 million, and $17 million over the Five Year Plan, to maintain low-barrier emergency and permanent housing services for people who have been chronically homeless and have Opioid Use (or other substance) Disorders, plus an additional $5.1 million in FY23 to support services and safety in Kensington.
• Low-barrier employment programs — The FY23 Budget includes expansion of multiple successful low-barrier employment programs. These investments at the Office of Community Empowerment and Opportunity, the Managing Director’s Office, and the Mural Arts Program total more than $2.3 million ($10.2 million over five years) and will form a coordinated system of accessible employment opportunities with pathways to more permanent employment.
• Mitigating environmental hazards — In FY23 the City will continue to advance policies and programs to mitigate environmental hazards, especially in communities of color that have disproportionately borne the costs of environmental harms. For example, the Department of Public Health will expand its home lead remediation program. In FY22 the Office of Sustainability launched the City’s first Environmental Justice Advisory Commission, a historic step in the City’s commitment to supporting the leadership of frontline communities in addressing environmental harms. In FY23 this Commission will steer a community resilience and environmental justice grant fund and develop priorities and processes to begin making recommendations to policymakers.
• Housing — Safe and stable housing is a critical foundation for health. In FY23 we will invest $3.2 million, and $6.2 million over the Five Year Plan, to sustain non-congregate shelter services for seniors and $1.3 million in FY23 and $5.7 million over the Five Year Plan to support our homeless services providers, including to increase the wages of providers of these critical services. The Plan also makes a major investment, $27.9 million in FY23 and $144.6 million over five years, in the Housing Trust Fund for the construction of new affordable homes, the preservation and repair of existing homes, and homelessness prevention. The Plan also includes funds to continue to support eviction prevention and the new Right to Counsel program that was launched in FY22.

Building a More Diverse, Efficient, and Effective Government:

In FY23, the Kenney Administration will continue and expand efforts to reshape the internal processes of government in service of Philadelphians.

• Reforming fines and fees — For the past several years the City has worked to reform fines and fees that disproportionately burden Black, Brown, and low-income Philadelphians. The FY23 Budget commits $750,000 to remove the cost to participate in the Accelerated Misdemeanor Program, so that ability to pay does not determine who can participate in this program that diverts individuals from the criminal justice system.
• Improving City operations through a racial equity lens — By the end of FY23, all City departments will have undergone a process to assess how their operations, policies, and budgets influence racial disparities in Philadelphia and will have created Racial Equity Action Plans.
• Using data to drive better outcomes — The City will also redouble its efforts to use data to address the most challenging problems we face, from poverty to gun violence to substance use disorder treatment, through the signing of an Executive Order elevating an Office of Integrated Data for Evidence and Action within the Managing Director’s Office and devoting additional resources to increase the use of data to drive better outcomes for Philadelphians.

In preparation for this year’s budget proposal, the City initiated a comprehensive, inclusive public engagement process regarding City spending, holding over 20 community engagement sessions with more than 500 residents and City employees. Residents, business owners, non-profits, arts and culture organizations, and frontline City employees participated in engagement sessions, offering insight into Philadelphia’s needs and vision for our city, which was used to create the FY23 budget.

“To align the proposals with our goals for reducing racial disparities, the budget process this year included opportunities for diverse and inclusive input, through focus groups and town halls,” shared Budget Director Marisa Waxman. “We’ve expanded who is involved, with a concerted effort to engage Black and brown Philadelphians, and we’ve altered how we make decisions, through asking departments to explicitly design programs to reduce racial disparities and engage partners in that work to produce budgetary decisions that we expect to have a measurable impact on improving racial equity.”

The proposed FY22 operating budget assumes $5.51 billion in revenues, and $5.61 billion in expenses, leaving a $153 million projected fund balance. The plan includes restorations of some cuts imposed during previous fiscal years because of the pandemic.

The $153 million fund balance is far lower than the pre-pandemic level of $439 million and represents under three percent of revenues. The City’s internal goal for a fund balance is usually six-to-eight percent, and national best practices call for a 17 percent fund balance.

The Mayor’s Budget Address, Operating and Capital Budgets, and Proposed FY23-27 Five Year Plan are available online.