PHILADELPHIA,PA — June 17, 2020 — A City Council committee today gave preliminary approval to a fiscal year 2021 city budget that reduces funding to the Police Department by $33 million, funds important reforms in policing, invests $20 million in affordable housing, another $25 million to reduce poverty and address disparities, and restores funding to the arts and culture community.
The $4.9 billion budget received approval from City Council’s Committee of the Whole today, a critical step prior to receiving first reading consideration by Council in its regular Meeting tomorrow.
The city budget process has been upended and badly impacted by the COVID-19 pandemic that has gripped the globe, devastated the United States, and left Philadelphia with more than 24,000 COVID infections and 1,503 deaths.
Earlier this month, city officials were projecting a budget gap of $750 million, a situation magnified by the city’s shutdown order for businesses during the pandemic, plummeting tax revenues, and increased expenditures related to the outbreak.
Working together with Mayor Kenney and his team, City Council and its own finance team have crafted a budget that includes the following actions to close that gap and produce a balanced budget by the June 30th statutory deadline.
The budget recommended for approval today by Council’s Committee of the Whole reduces funding for the Police Department by $33.3 million – which is $14 million more in reductions than Council and the mayor agreed upon last week. The reduction in police spending calls for the following reforms inside and outside of the department:
- Body cameras for police officers
- Implicit bias training for police
- Engage mental health professionals for police-assisted diversion
- Equity Manager for the police force
- Transfer funding for crossing guards ($12.3 million) and public safety enforcement officers ($1.9 million) to Managing Director’s Office (MDO)
- Create a Deputy Inspector General for police-related investigations (in MDO)
- Fund a Police Oversight Commission ($400,000 to MDO)
- Additional funding for the Public Defender ($1.2 million)
Additional Investments in Philadelphians
The budget recommended for approval by the Committee of the Whole includes:
- New Normal Budget Act. $25 million in the budget is earmarked to address healthcare needs, healthier food options, affordable housing, anti-poverty efforts, job training and other measures to address the disparities laid bare by COVID-19 and the unrest in Philadelphia following George Floyd’s murder.
- Quality, Affordable Housing. An increased investment of $20 million for the Housing Trust Fund.
- Adult Education. $1.45 million for Adult Education.
- Arts and Culture funding. $1.35 million in funding slated for elimination due to COVID-19’s impact has been restored, through the Cultural Fund and African-American Museum
- Criminal justice reform. $825,000 in funding for Re-Entry Services
The Non-Resident Wage and Net Profit Tax will increase to 3.5019%, still below the rate for Philadelphians of 3.871%. This slight increase goes along with a decision not to seek a reduction in the Resident Wage Tax, as previously planned. Together, these changes should generate $17.2 million in FY21. For a commuter earning $50,000 a year, this would increase his/her wage tax by $27 a year, or $1 per pay period. The tax increase will sunset after one year.
The Parking Tax will increase from 22.5% to 25% to generate an additional $8.5 million in FY2021. The tax increase will sunset after one year. Council also approved a plan to create a “Good Parking Jobs for Philadelphia Review Committee” as an agency of Council, with nine mayoral appointees, two of whom shall be members of Council. If the Committee determines to Council’s satisfaction that the parking industry is supporting the development of stable jobs for workers, it is Council’s intent beginning in fiscal 2022 to reduce the parking tax, with the goal of reducing the rate to 17 percent.
Pension Debt Restructuring
The Kenney administration proposed, and Council agreed, to a pension bond debt restructuring that will generate savings of about $80 million in FY2021.
Fire Department spending
The administration proposed, and Council agreed, to hold the Fire Department to its FY2020 level of funding, an economizing move generating $5 million in savings.
Council President Darrell L. Clarke (5th District) said this evening he believed the collaborative work of City Council and the Kenney administration will address deep social ills and other reforms in city government which were magnified by the pandemic and unrest.
“The COVID-19 pandemic and unrest in our city and country these last few weeks have magnified the disparities that were glossed over by a booming economy and years of cutting resources from our country’s social safety net,” President Clarke said.
“The lack of access to affordable housing, health care, living wage jobs and healthy foods has been exposed by these crises – along with many problems. We cannot go back to that old normal,” Clarke said. “We need to create a ‘New Normal’ and address these disparities head on. I believe this budget is an important start towards doing that.”
Council’s Majority Leader Cherelle Parker (9th District), noted the New Normal Budget Act’s inclusion in the budget agreement, saying, “We need to address the underlying health disparities that lead to worse health outcomes for people of color. They are the ones dying at higher rates of all diseases, including COVID. We need to expand the City’s use of minority contractors, starting with the $92 million CDC grant the City was awarded, and what’s left of the $85 million emergency appropriation to fight the pandemic.”
Regarding the police reforms in the budget, Council’s Whip and Chairman of Public Safety Committee Curtis Jones, Jr. (4th District), said:
“As we move forward to heal our city and nation, we must not allow the recent injustices between the police and members of the black community to continue to cause us frustration and pain, but instead use this opportunity to come together and work collectively and establish real reforms that will make a difference in our neighborhoods.”
Council’s Deputy Whip Mark Squilla (1st District), focused on initiatives outlined in the New Normal Budget Act to assist small businesses recover from the pandemic and the city’s shutdown order.
“Small, homegrown businesses are the backbone of our City,” said Squilla, who also chairs Council’s Committee on Commerce and Economic Development. “They stabilize our neighborhoods and provide jobs to local residents. As we recover from COVID-19 and civil unrest, it is critical that we invest in a smart restart of our economy.”
“Our budget is a moral document,” said Councilmember Maria Quiñones Sánchez (7th District), chair of Appropriations. “We have a responsibility to secure Philadelphians’ right to raise our children in safe, affordable, accessible housing across diverse, mixed-income neighborhoods where everyone can share access to quality jobs, quality schools, and quality transit. We can achieve this goal through this budget by investing directly in rental assistance and eviction prevention for low-income households at a moment of unprecedented need and disparity.”
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