With Philadelphia’s Fiscal Year 2024 Budget seemingly finalized, Hall Monitor looks at the process and (almost) $6.2 billion final product. So what is in the budget, and what has changed since the process began?
The budget itself is a year-long process, but for our purposes here, we’ll focus on the public aspect. Usually, in March, the Mayor makes a public budget address before city council, outlining the administration’s priorities and setting the tone for the rest of the process.
In his budget address, Mayor Jim Kenney cited “education, public safety, racial equity and alleviation of poverty, housing, and quality and accessible services and infrastructure” as his key goals in this budget. So how does the final document fund these areas?
The budget provides a $282 million payment to the School District of Philadelphia and $51 million to the Community College of Philadelphia. The contribution to the school district is a relatively small amount compared to their overall $4.5 billion budget and nearly $7 billion in capital needs. Currently, City Council members are working on plans to lobby Harrisburg for more education funding.
The budget provides over $900 million to the Police Department and nearly $450 to the Fire Department for over $1 billion in combined public safety funding.
Poverty alleviation is a trickier budget aspect to track, as multiple departments could have various anti-poverty initiatives active simultaneously. However, key departments working to alleviate poverty are Public Health ($418 million), Behavioral Health ($1.7 billion, including grants and other funds), and Department of Human Services ($880 million, including grants and other funds).
Regarding housing, Kenney’s Five-Year Plan put nearly $30 million into eviction prevention and almost $7 million into the city’s first tiny house community. These expenditures fall under the $400 million Neighborhood Preservation Initiative program.
The city will also make a significant investment in infrastructure, with the Streets Department seeing $364 million from the general fund and other city funds. Digital infrastructure will also receive a sizable commitment of nearly $222 million.
But while the budget is the largest in city history, taxes will once again be coming down. The city wage tax will be reduced from 3.79% to 3.75%, and the net income portion of the Business tax will be reduced from 5.99% to 5.81%. Philadelphians who make the median salary of just over $52,000 would see savings of $21 per year, resulting in a reduction of tax revenue of over $32 million. This is a continuation of the city’s efforts to reduce reliance on the volatile wage tax. However, there are few alternatives to recouping the lost revenue.
The budget bills will receive a second reading this week in City Council, with passage likely. Once passed, the budget is sent to the Pennsylvania Intergovernmental Cooperation Authority for review and is set to take effect July 1st, 2023.
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