Mayor Parker presents $6.7B city budget proposal touting $800M housing plan, 'historic' tax cuts, extended-year Philly school pilot expansion

Mayor Cherelle L. Parker’s second budget address to Philadelphia City Council sounded in many ways like an ordinary mayoral speech, with Parker waxing poetic about heroic first-responders, touting wins during her first year, and pitching new proposals on housing and tax cuts contained in her $6.7 billion proposal for the city budget that takes effect July 1.

But looming over Parker’s 90-minute speech on Thursday was a wild card with the potential to make this year’s city budget negotiations anything but ordinary: President Donald Trump, who has threatened to dramatically cut federal funding for local government.

“I know there is uncertainty in the air right now,” Parker said in Council chambers during her speech, which has traditionally served as Philly’s version of the presidential State of the Union address. “People don’t know what to expect from their government, and uncertainty can breed fear. I want the people of Philadelphia and our city employees to hear me: Your city is here to keep you safe and to safeguard your basic rights.”

During her first year in office, Mayor Cherelle L. Parker was criticized by some road safety and public transit advocacy groups for cutting $1.5 million from the city’s Vision Zero traffic safety program.

The administration always insisted it wasn’t a real cut, because $1.25 million was added to the Streets Department’s budget to implement traffic calming measures. (Even taken by that logic, however, $1.25 million is less than $1.5 million.)

During her budget address this year, Parker highlighted her commitment to Vision Zero.“Every Philadelphian deserves to travel safely throughout our city and return home safe and unharmed,” said Parker.

“I do wholeheartedly approve this message,” Parker said at the closing of her city budget address Thursday.

“I want you to know that my name is Cherelle L. Parker, and I am the 100th mayor and first woman to lead Philadelphia in 341 years,” Parker said in the final moments of her 90-minute speech that sprawled across various topics including public safety and health, taxes, education, and housing.

Parker then instructed attendees in the Council chambers to hold up a finger — or their “ones” — in honor of her “One Philly” slogan. “Oh, that’s not nice, everybody put your ones in the air,” she said when some in the crowd hesitated.

Mayor Cherelle L. Parker on Thursday cast her tax cut plan as "historic and unprecedented," saying that she wanted to dramatically reduce the business tax in an effort to boost the local economy.

"This proposal will spur businesses to grow and new ones to locate here," Parker said in her budget address to City Council.

The mayor is proposing that the city adopt a 15-year schedule for tax cuts. But during this spring's budget negotiations, the administration and Council can only control what happens in the fiscal year that begins July 1. And Parker is proposing starting small.

Mayor Cherelle L. Parker said that in the wake of the “shock and awe” of the Philadelphia 76ers' surprise decision to stay in South Philadelphia, she will be making the revitalization of East Market Street a priority.

The long debated, and highly controversial effort to build a basketball arena on East Market Street was cited by city officials as key to the renewed fortunes of the beleaguered shopping district.

Members of Parker’s administration told reporters that the arena would spur more development on the corridor, which suffers from high levels of vacancy, just a few days before the 76ers surprised everyone by cancelling the project.

Parker is proposing nearly $300 million in new funding over the next five years to continue construction and operations at the Riverview Wellness Village, her administration’s new city-run rehabilitation housing for people recovering from drug addiction.

The facility opened in January after the mayor secured $100 million in funding last year to kickstart construction.

“There were some who said it couldn’t be done. That it was too much, too fast. ‘Where would the facility be located? Where was the plan?’” she said. “We did not have time to wait. We are in the middle of a humanitarian crisis, and we acted with urgency, focus, and a plan.”

The Parker administration is expanding its so-called “extended-day and extended-year” program in Philadelphia schools by 15 more schools — 10 district and five charter.

It’s not immediately clear which schools the city will be adding.

In June, Parker announced a pilot for 25 district and charter schools to test out the program, which would provide before and after-care, be open during winter and spring break, and offer six-week summer programs.

At the midway point in her speech, Mayor Parker touted the $800 million she has proposed that the city pump into housing policy under her administration.

Half of the money would become available almost immediately.

Full details of how that money will be spent were not immediately available, but Parker promised they will be revealed in 10 days' time at a special session of City Council on March 24.

Parker briefly alluded to the national political climate in her budget address Thursday after reviewing her administration’s accomplishments from the past year.

"I know there is uncertainty in the air right now," Parker said. "People don't know what to expect from their government, and uncertainty can breed fear. I want the people of Philadelphia and our city employees to hear me: Your city is here to keep you safe and to safeguard your basic rights.

"Our diversity is what makes us one Philly, a united city, and we will never compromise," Parker said.

The Philadelphia Police Department’s new $50 million forensics lab will be located on Market Street in University City, a decision the city made after spending years securing funding and evaluating real estate options.

Mayor Cherelle L. Parker announced the location of the new crime lab Thursday during her budget address, saying the new lab to be located at 4101 Market St. will “mark a giant step forward in forensics technology and crime solving ability for our police department.”

“We're embracing technology to improve our performance,” she said. “The police department will move forward with a new forensics lab to assist the force with forensics investigations to help solve crime.”

After thanking her family and recognizing city employees, Parker kicked off her address by touting accomplishments from her first year in office, starting with public safety and outlining steps she says led to sharply declining rates of homicides and gun violence.

She ticked off efforts funded in her first city budget, including an increased number of police officers walking foot beats and millions of dollars in funding for grassroots community organizations that fight violence.

“I felt a sense of urgency and that we’d be laser focused and unapologetic about improving public safety,” Parker said. “I promised it, and it’s working.”

Pennsylvania Attorney General Dave Sunday is in Council chambers Thursday to attend Mayor Cherelle L. Parker’s budget address.

Sunday, elected in November, is the lone Republican from the state government in attendance. The mayor’s office invited all state-level government officials, and Sunday was the only Republican who appeared to take it up on the offer.

Parker welcomed Sunday's attendance Thursday, saying "AG, Sunday, we are super excited about your presence. Thank you so very much, sir, for being here."

Philadelphia City Councilmember Brian O’Neill, the lone Republican in the body, bantered with his colleagues across the aisle Thursday morning as Council makes its way through its regular session ahead of Mayor Cherelle L. Parker’s budget address.

At the start of the session, O’Neill — one of Council’s quietest members — called attention to Council President Kenyatta Johnson accidentally skipping over newly-elected Democratic State. Sen. Sean Dougherty when Johnson was welcoming dignitaries (who were “on time”) ahead of Parker’s address.

“I know he was on time because I was on time and he was here,” O’Neill said of Dougherty, who represents the Northeast and is a special guest of O’Neill’s.“I like that bipartisanship,” Johnson replied, ribbing Dougherty for apparently sitting in the wrong area.

Mayor Cherelle L. Parker has transmitted the legislation for her $6.7 billion budget proposal to City Council, setting the stage for her high-profile address to lawmakers later Thursday.

The legislation includes the budget itself — which dictates how much money each department gets — along with budget-adjacent bills changing city tax rates, laying out the city's five-year financial plan, setting a capital budget program for the next six years, and increasing some fees.

Parker this year wants to cut the city wage and business tax, increase the real estate transfer tax, and eliminate the construction tax.

When Philadelphians think about why their city is plagued with a persistently high poverty rate, frequent public safety crises, and often-deficient city services, the business income and receipts tax may not be top of mind for many.

But to hear some people in and around City Hall talk, reforming or eliminating Philadelphia’s unique business tax, known as BIRT, could be the key to revitalizing the city.

That hypothesis will be hotly debated this spring, thanks to a report released last month by the Philadelphia Tax Reform Commission convened by City Council President Kenyatta Johnson that calls for the elimination of the tax over the next eight to 12 years.

Mayor Cherelle L. Parker is set to propose nearly $300 million in additional spending over five years to support construction and operations at the city-run drug addiction recovery house in Northeast Philadelphia, which opened in January and is a key part of her signature plan to end the open-air drug market in Kensington. About $100 million of that money is in this year’s budget.

Council already approved $100 million in funding last year to kick-start building on the site, which is adjacent to the city’s jail complex. When the facility is complete, it is expected to hold more than 600 recovery beds, doubling what is currently available in recovery houses citywide.

Only part of the Northeast complex at Riverview is open now. As of late February, fewer than 50 people were being housed there, according to city officials who testified recently before members of City Council. Patients can be referred to the site after completing a 30-day inpatient treatment program elsewhere, and then can live at Riverview for up to one year.

Mayor Cherelle L. Parker is making housing policy a centerpiece of her second year in office in pursuit of her goal of building or repairing 30,000 homes in her first term.

To that end, she plans two $400 million bond issuances — costing $166 million in debt service in the next five years — to support a variety of new and expanded programs. The administration also wants to increase the real estate transfer tax to help pay for the housing initiative, from 3.278% to 3.578% of the sale price or assessed value of a property.

Parker initially planned to unveil her housing plan last fall, but the rollout has been repeatedly delayed. Most of the details of the mayor’s housing policy proposal will not be presented Thursday, and Parker instead plans to go into greater detail in a speech later this month with her newly appointed director of the initiative, Angela D. Brooks. One detail that did emerge Wednesday is that the Philadelphia Office of Planning and Development would receive an $11 million boost over five years to add staff to execute the new policies.

In her first budget proposal, Mayor Cherelle L. Parker punted on engaging in the decades-long debate over Philadelphia’s unusual tax structure and proposed no tax rate changes. This year, she’s entering the fray.

Parker is proposing a small cut to the city wage tax and major changes to the business income and receipts tax, or BIRT. Those proposals broadly align with the recommendations from a report released two weeks ago by the Philadelphia Tax Reform Commission, which was convened by Council and called for the complete elimination of BIRT in eight to 12 years.

BIRT has two tax rates — one on businesses’ profits and another on businesses’ total revenue, regardless of whether they turn a profit. Parker wants to lower the net income tax on profits from 5.81% to 5.71% next year, and the gross receipts tax from 0.1415% to 0.141%. Those cuts would cost the city $9.2 million next year.

Mayor Cherelle L. Parker last month convened representatives from Philadelphia’s major educational and medical institutions with a simple message: The city needs your help.

The Feb. 20 meeting included lobbyists or other representatives for Drexel University, Children’s Hospital of Philadelphia, Temple University and its health system, the University of Pennsylvania and its health system, and Thomas Jefferson University and its health system, according to multiple sources with knowledge of the meeting who spoke on the condition of anonymity to discuss the private gathering.

Despite being some of the largest employers in the city and most having budgets or endowments in excess of $1 billion, Philly’s “eds and meds” institutions, as they are often called, are exempt under state law from paying many local taxes because they are nonprofits, and activists have long called for them to do more to help the city.

Mayor Cherelle L. Parker’s proposal for the next city budget will include cutting Philadelphia’s business tax, spending $100 million more on a new drug recovery center in Holmesburg, and borrowing $800 million for a major housing initiative, according to people who were briefed on what will be included in the mayor’s budget address to City Council on Thursday.

The mayor will also propose increasing the real estate transfer tax and repealing the construction tax when she delivers her high-profile speech in Council chambers, kicking off three months of negotiations between the administration and lawmakers over the fiscal year 2026 city budget, which takes effect July 1.

The Inquirer learned details of the mayor’s $6.7 billion proposal from multiple sources who attended administration briefings on the plan. They shared the information on the condition of anonymity because the mayor’s team did not give them permission to disclose it publicly.