Kenney proposes spending plan without tax increases. Council likes it but wants changes.

Members of City Council praised Mayor Jim Kenney’s $5 billion election-year budget Thursday, with no tax increases and more spending for education and public safety, but most of them are facing the voters, too, and several signaled they would push for changes in the plan during negotiations.

Foregone revenue from the 10-year tax abatement program for new or remodeled properties, how to use a budget surplus, and the system of property assessments are expected to draw vigorous debate between Council and the administration.

“You can’t really have equity if we don’t look at the tax abatement and some of the other issues on the table,” Councilwoman Maria Quiñones-Sánchez said after the mayor’s budget address in a packed Council chamber. She was responding, in part, to Kenney’s touting an $80 million six-year affordable-housing plan.

That money is to come from taxes paid by property owners whose 10-year abatements expire. But Quiñones-Sánchez, along with Councilwoman Helen Gym, said more needs to be done to keep Philadelphia affordable for everyone.

“It’s time. Tax subsidies are not meant to stay fixed in time forever,” Gym said. “The city is growing and changing and our needs are changing along with it, and it is time for us to take on the 10-year tax abatement and meet the needs of the city.”

During a meeting with the Inquirer editorial board later in the day, Kenney defended the program: “I think it works and should be left alone.”

But he conceded that if Council passes some amendments to the abatement, he will sign it. In fact, he predicted that Council members would do something to change the tax break based on political pressures.

“They’re going to have a piece of legislation that’s going to adjust it in some way, and I’m most likely going to support it because there’s no sense in having that fight," he said.

Kenney and Council members are up for reelection this year. Although he did not mention that he is running for reelection, Kenney’s budget address doubled as a campaign speech; he described an ambitious vision for how the city can improve in the next five years and listed his work since he took office in 2016, including funding pre-K and increasing funding for schools.

All 10 district Council members are facing challengers this election season, and the at-large Council candidate field has dozens of people running for the seven seats.

The proposed spending plan is expected to draw little controversy — in contrast to last year, when Council rejected Kenney’s call for a property tax increase.

“No new taxes is always good to hear," Councilman Curtis Jones Jr. said.

While touting his first-term accomplishments, Kenney made the case to Council on Thursday for new spending on public safety initiatives. He is including funding for 50 new police officers, 1,500 body cameras, five ambulances, and 10 emergency medical personnel. He also announced a $30 million antiviolence plan for communities.

“His commitment to antiviolence is what jumped out at me,” Jones said. “It’s a major issue in inner cities, but to have a plan and then to have allocations and resources, which is dollars, toward that plan is impressive.”

But Jones said he wants to see more funding for summer jobs programs than the $1 million boost Kenney seeks.

“We did 11,000 summer jobs for youth last year. The demand, however, was for 18,000,” Jones said. “I’ve got to believe it would reduce the violence.”

District Attorney Larry Krasner said he is going to “ask for a little more money” but declined to specify for what. Last year Krasner asked for a $5 million increase in his budget but received $1.5 million.

Kenney’s proposal for the next fiscal year already includes a $270 million increase in spending compared with this fiscal year’s adopted budget. City officials said some of the spending increases are caused by rising disability payments to city employees, a decision to put more money into the city’s pension fund, and increased recycling costs.

Councilman Allan Domb said the city has been spending too much.

“I’m a little concerned that the budget has gone up almost $1 billion in four years,” Domb said. “Under Michael Nutter for eight years it went up a total of 2.5 percent. This is 25 percent in four [years].”

Jones predicted a possible fight over the city’s surplus and Kenney’s proposal to put money into a rainy day fund for the first time.

“Now with a surplus. Should we be frugal? Should we address things that have been kicked down the road, if you will?” he said. "So that begins a different debate over the budget process.”

Although the budget does not include a proposed property tax increase, the Office of Property Assessment is still facing scrutiny after a reassessment of residential properties resulted in large tax hikes this year for thousands of homeowners. Council members already were saying Thursday that they plan to tackle the formula for assessing property values.

“I think we still don’t have a real plan for OPA and what we do around the assessments we all agree are faulty and don’t meet the standards,” Quiñones-Sánchez said.

Kenney’s use of the budget address to tout his track record and lay out goals for a second term was notable, partly because he did not hold a rally or news conference to launch his reelection bid. Instead, he announced via social media that he is seeking another term.

“I’m proud of what we’ve achieved so far on vital issues like education, public safety, growing jobs, and increasing equity in our neighborhoods,” Kenney said.

His budget address focused on increased funding for the School District, which Kenney made a priority in his first term when he returned the city’s school system to local control and appointed a new school board. Other priorities Kenney noted in his five-year vision for the city include strengthening the economy, fixing roads and infrastructure, increasing library funding, reducing crime, and combating the opioid crisis.

City Council must pass a budget and five-year spending plan by the end of June, when the current fiscal year ends.

Staff writers Chris Brennan and Jess Rohan contributed to this article.