Jim Kenney’s budget for Philly makes tough cuts. But are they the right ones? | Editorial

There’s nothing like a deadly pandemic to prove an old truth: Man plans, God laughs. That’s especially relevant when considering the city budget currently being discussed and subject to hearings in City Council. In the olden days of pre-coronavirus lockdown in early March, Mayor Jim Kenney’s budget painted a rosy picture of the future, directing new money to schools, pre-K, and other programs.

All that has obviously changed, with a crisis that has decimated budgets — government and household — in two short months. We don’t envy the task of rewriting that earlier version of our city’s story to align with the new reality and don’t underestimate how difficult it is to have to shift the narrative and see the city’s momentum halted.

Kenney’s revised budget seeks to fill a $649 million hole with an increase in parking, property, and wage taxes. In addition to imposing a hiring freeze, Kenney is proposing layoffs of part-time, seasonal, and temp workers, gutting arts and special events, and eliminating the Office of Workforce Development, among other cuts.

Raising taxes should be the last resort in a crisis that has left very few unscathed. Adding more tax burdens on salaries or properties at a time when incomes are plummeting or outright disappearing makes no sense. When the crisis is over, people will need to be encouraged to come back to the city; a hike in parking and nonresident wage taxes does the opposite.

The wage tax hike for nonresidents seems to ignore the fact that the workplace has been altered dramatically — and doubtless permanently. With mid- and high-income people working from homes in the suburbs, many city-based companies are rethinking whether to fully return to expensive city offices. A higher wage tax for their employees could be the deciding factor.

Also, workforce development efforts will be central to rebuilding the city and its economy, so Kenney’s decision to close the office devoted to this is troubling. While the mayor cites a flood of federal relief dollars for small businesses that justifies his eliminating the office, the city will need a planned and organized approach to do help prepare the workforce of the future.

Our worries about the budget predate the pandemic: an increase in spending during the Kenney administration by $1 billion. That was fueled, in part, by an increase in the number of employees, which was coupled inexplicably with higher overtime costs. That giant increase did not result in a reduction in the homicide rate, the poverty rate, or overdose deaths.

The process of debating the budget is underway, with Council holding hearings over the next few weeks.

Also this week, City Controller Rebecca Rhynhart issued an alternative plan that recommended ways to cut spending without raising taxes. Those cuts involve more aggressively reducing overtime and forestalling wage increases, among other steps. As City Council reviews the budget, it will also no doubt offer its own version. Mayor Kenney should keep an open mind and consider all these options. Ultimately, the budget should not just be about surviving this crisis, but ensuring the city and its citizens have a chance to come out of it stronger and healthier.