PHILADELPHIA (KYW Newsradio) — Philadelphia Mayor Jim Kenney is set to introduce a $5.2 billion budget on Thursday. It would restore city services to pre-pandemic levels while resuming gradual reductions in wage and business taxes and returning the parking tax to the lower pre-COVID-19 level.
Finance director Rob Dubow said the largely pain-free budget is made possible by the $1.4 billion the city will receive through the American Rescue Plan.
“It would have been a devastating budget without the federal money,” Dubow explained at a briefing on Wednesday, hours before Kenney’s scheduled budget address to the city council.
“We would be looking at major cuts. We also would have had to be looking at major tax increases so this really was a rescue plan.”
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Dubow said the city will receive $700 million next month and another $700 million in May of 2022. All the money must be spent by December 2024. By that time, the city’s projection shows tax revenues once again rising to keep pace with the demand for city services.
The funding allows most city departments to return to the spending levels proposed before COVID-19 created a $450 million deficit. A few, such as fleet management, which oversees city vehicles, will see reductions. Some will see increases.
The Department of Parks and Recreation budget will allow pools to reopen this summer and staffing to be increased for seasonal programming. The library budget will allow five-days-a-week service. The streets department will again attempt a street cleaning program in some neighborhoods.
There is also new money for storefront improvements and commercial corridor cleaning to help businesses reopen and recover.
The Department of Public Health will get a boost for ongoing COVID-19 containment and improving equity in health outcomes.
The budget also calls for adding 700 new pre-kindergarten seats and creating more community schools.
Much of the new funding will go to the mayor’s violence reduction plan.
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The budget sets aside $25 million for new contracts with all four municipal unions. The current contracts expire in June. It reserves $109 million for the fund balance.
The city also expects to refund $120 million to non-residents who worked from home, and thus don’t owe the wage tax.
Budget director Marissa Waxman said this will be an ongoing issue for the city.
“Even when health conditions allow for a return, we’re going to see a permanent shift in work locations and the pattern of work,” she said.
“We expect that to mean, for us, a permanent 15% reduction in the wage tax we’re getting from commuters.”
The capital budget calls for $270 million in new borrowing, the largest amount ever. Nearly half of that, $132 million, goes to street paving and ADA accessibility ramps.
There is also money for tech improvements, neighborhood commercial centers, the FDR Park master plan and the cap over I-95.