Six takeaways from Mayor Jim Kenney’s final budget proposal

Mayor Jim Kenney on Thursday proposed a $6.1 billion budget, kicking off a four-month process known in City Hall as “budget season.”

Kenney’s administration will now negotiate with City Council members over how the city should tax residents and spend money. Council must approve a budget by the end of June, which is when the current fiscal year ends.

» READ MORE: Philly Mayor Jim Kenney reflects on his legacy and proposes his final budget in address to City Council

Here are some key takeaways from Kenney’s proposal.

Kenney is proposing that the city cut the wage and business tax rates and leave all other tax rates the same.

Kenney’s plan would continue the city’s practice of incrementally decreasing the city’s wage tax, lowering the rate for Philadelphia residents from 3.79% to 3.7565%. It also asks Council to approve lowering the net income portion of the business income and receipts tax from 5.99% to 5.83%.

The Chamber of Commerce for Greater Philadelphia applauded the plan, with President and CEO Chellie Cameron saying in a statement that the tax reductions “will help businesses throughout the city prosper, allowing Philadelphians across zip codes to enjoy an improved quality of life.”

Progressives, however, are likely to oppose the tax cuts. Arielle Klagsbrun, coordinator of Tax the Rich PHL, called City Hall’s continued focus on business tax cuts a “holdover from the trickle-down economics of the 1980s.”

“Without clear replacement revenue, cuts to the [business] and wage taxes will ultimately lead to service cuts and contribute to austerity,” Klagsbrun said.

The mayor is also proposing that the city freeze the property tax rate and all property assessments for a year amid a flood of reviews requested by homeowners. Citywide reassessments this year, the first since 2019, resulted in an average appraisal increase of 31%.

Kenney’s proposal includes a $55 million increase to the police budget, bringing the department’s total allocation to $855 million. The increase is to cover contractually obligated labor costs and new forensic specialists. The capital budget also includes about $50 million for improvements to the department’s crime lab.

The mayor is also proposing to allocate nearly $10 million for the department to hire additional analysts to carry out its hotspot patrol strategy, which aims to shift resources in real time to areas where crime is spiking.

The 8.8% increase to the Police Department budget over last year’s plan comes just three years after Council voted to freeze the force’s budget amid nationwide racial justice protests.

Democratic Majority Leader Curtis Jones Jr. said he doesn’t anticipate as much controversy this time around, saying “times have changed.”

“There’s an ebb and flow of opinion and when people are getting carjacked and when people are getting shot,” he said, “we’re going to make sure that public safety comes first.”

» READ MORE: From defund to refund: Why Democrats are shifting their tone on policing

The plan also includes a $25 million increase to antiviolence programs outside law enforcement, bringing the allocation to those programs to about $233 million. The increase will fund stipends for people who participate in a program called Group Violence Intervention, which aims to connect people most likely to shoot or be shot with city services.

New funding would also be set aside for trauma support and counseling for city workers administering programs in communities most impacted by gun violence.

» READ MORE: Philly has a $208M antiviolence budget. Just a fraction addresses shootings in the short term, the controller says.

The mayor also announced the city is hiring Estelle Richman, a former secretary of the state Department of Public Welfare, to serve as a new advisor on gun violence intervention initiatives.

Kenney’s plan also creates a new $5 million fund for Philadelphia residents who have outstanding criminal-justice-related debts and court fees that create barriers to employment.

The administration also proposed a new $107 million Transportation Fund for street paving, lighting, engineering, and crossing guards.

The fund would primarily be supported by the city parking tax, which is projected to bring in $100 million next year.

In addition, Kenney said his budget includes an additional $2.5 million investment to expand street sweeping and $4 million to hire an additional crew focused exclusively on illegal dumping.

The plan also includes $80 million for a two-year pilot program that would provide free SEPTA passes to city employees and an additional 25,000 residents living in poverty. And it sets aside $110 million this year to subsidize the transit system, an $8.8 million increase over last year’s subsidy.

Kenney said the administration is committing about $37 million over five years to staff the city’s library branches six days a week. As of this month, 10 libraries are open on Saturdays, while others are open five days a week or fewer.

He said funds approved in last year’s budget have allowed for the city to open more than 60 recreation centers on weekends. The goal is for every rec center to have weekend hours by the end of 2023.

The mayor said his administration has “doubled down” on its commitment to the Rebuild program, which was intended to revitalize city parks, pools, and rec centers and was in part funded by Kenney’s signature sweetened-beverage tax.

Some Council members have criticized the slow pace of construction under the program, which is one of Kenney’s signature achievements.

The mayor said his budget proposal includes $47.5 million of new spending and borrowing for Rebuild. The goal, he said, is for 80% of the city’s low-income households to live within a mile of a recently renovated public space by the end of the year.

“Rebuild is a win-win program that transforms lives as well as facilities, by offering support and opportunities for under-represented businesses and workers,” Kenney said.

The mayor’s budget proposal kicks off months of negotiations between his administration and Council. Council will host hearings with department heads, and some members will advocate for changes that benefit their districts or address pet projects.

The two sides must come to an agreement by the end of June, when the current budget expires.

City Council leaders predicted that the budget proposal would sail through the legislative process, with Council President Darrell L. Clarke calling it “one of the most significant consensus budgets early on in the process that I’ve seen, and that happens when you have a significant [surplus].”

Even a proposed increase to the police budget could be supported by some of Council’s more progressive members. Councilmember Jamie Gauthier, who has generally opposed increasing the police budget to add more officers to the force, said she supports investments in upgrading the department’s forensic capabilities.

She said she does question the plan to decrease the business tax “without proof that that’s going to get us where we need to be.” Gauthier was one of several members who last year voted against a similar proposed decrease to the tax.