Philadelphia Mayor Jim Kenney delivered a video address on Friday, 5/1, proposing an updated budget for 2021 in the wake of the coronavirus COVID-19 pandemic. He delivered an initial budget and 5-year plan in front of City Council back in March. Both have been since been scrapped in the face of a looming deficit due to the shutdown of the economy and in turn a loss of revenue from business and wage taxes. The Office of the Department of Finance projects that without any changes the city would have a $649 million deficit next year. That is five times the projected deficit in 2009 during the Great Recession. The city is not allowed to carry a deficit and must make changes to prevent it. The new budget raises taxes, cuts hundreds of city jobs, reduces salaries, and reduces or eliminates some city services.
"This budget pares city services down to the most essential, imposes layoffs on hundreds of workers, and reduces or eliminates some programs that are simply no longer affordable," Kenney said. "This is not what I want for our residents - and I understand if this leaves many of you angry. Frankly, I'm angry too. But after that anger fades, we must remember exactly what we are dealing with. What we have is both a pandemic and an economic catastrophe."
This new budget raises the city's property tax nearly 4%, the parking tax 4.5%, and the non-resident wage tax about a half-a-percent. There will be hundreds of layoffs of full-time, part-time, seasonal and temporary positions. Exempt employees making at least $35,000 will have pay cuts. The city will also have a hiring freeze, except for coronavirus COVID-19 related positions. Some services not included in this year's budget include opening city pools this summer and the return of street sweeping. The Office of Arts, Culture, & the Creative Economy, the Office of Special Events, and the Office of the City Representative are also proposed to be cut.
The City Council has to approve the budget. The next fiscal year begins 2021.
The Mayor said they set priorities and principles when deciding what to cut and what to keep. "We will keep all Philadelphians safe, healthy, and educated while maintaining core municipal services that our residents rely on daily."
1. Learn from the City's experiences in the Great Recession. One such lesson was that funding cuts for essential services like public safety take years to recover from. Another lesson learned is that Philadelphians care deeply about their neighborhood facilities.
2. Ensure that these decisions were made through a lens of racial equity. The budget 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.
3. Commit to leverage federal, state, and philanthropic resources. We intend to reduce our own spending by partnering with others in order to help fund or deliver services.
The budget reflects the priorities listed above by guaranteeing the following:
- No police or fire layoffs.
- No reduction in emergency medical services.
- All fire stations will remain open.
- All health centers will remain open.
- All recreation centers will remain open.
- All libraries will remain open.
- PHLpreK and Community Schools will be maintained at current funding levels for FY21 and expand over the Plan.
- Weekly residential trash collection and single-stream recycling will continue, with some adjustments.
- We will prioritize keeping Philadelphians in their homes with support for basic systems repairs, preventing mortgage foreclosure, and support for renters using local and federal funding.Â
- We will prioritize education including increased funding for the School District of Philadelphia and Community College of Philadelphia.
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