PHILADELPHIA – Mayor Kenney today proposed the Fiscal Year 2021 Budget and FY21-FY25 Five Year Plan, which feature important new investments focused on the top priorities for his second term, including reducing gun violence, investing in education, and making streets safer and cleaner.

“The key investments in this Plan and the Capital Program will advance these specific goals, and ultimately help lift at least 100,000 Philadelphians out of poverty—a priority I know we all share,” the Mayor said in his address to City Council. “These investments continue programs we know are working well for our residents such as PHLpreK, Community Schools and Rebuild. They also fund the commitments we’ve made to prioritize key issues over the next four years.”

In his fifth budget address to City Council, the Mayor elaborated on investments that fall under his five second term priorities:

  • A safer and more just city
  • Quality education for all
  • Cleaner and safer streets
  • Inclusive and resilient neighborhoods
  • A more diverse, efficient, and effective government

The Mayor vowed to work hand-in-hand with Councilmembers over the next few months as the lawmakers review the spending plan. “As we work through these priorities, I am confident that none of us will lose sight of the greater goal we all share—to make Philadelphia safer, cleaner, healthier, and to give our children opportunities to achieve their dreams,” said the Mayor.

A safer and more just city
The FY21 budget includes an increase of more than $8 million for anti-violence programs over the initial FY20 budget. These funds will support evidence-based, community-informed initiatives to reduce violent crime such as Police Assisted Diversion, Community Crisis Intervention, Group Violence Intervention, and targeted blight remediation in high-crime areas via Licenses and Inspections. An additional $5.7 million is earmarked to expand the Police Department’s “Operation Pinpoint.” Using data, technology, and on-the-ground experience, this initiative pinpoints our worst offenders and neighborhood attractors for crime; and operates in conjunction with the community, within our most volatile targeted areas.

Quality education for all
The FY21-25 Plan includes an unprecedented $2 billion for education. The FY21 Operating Budget proposes $267 million in funding for the School District of Philadelphia, a $45 million increase over FY20. “The crisis with lead and asbestos removal in our schools is evidence enough that decades of cuts and disinvestment come at a price,” said the Mayor. “It is our generation who must now have the political courage to act and lead our city from a legacy of survival to a future of students thriving.”

The spending plan also includes a groundbreaking new investment in higher education for thousands of Philadelphians. The Mayor announced a major investment of $87 million in new funding for Community College of Philadelphia over five years. $63 million will launch the pathbreaking Octavius Catto Scholarship program. “We have a simple but vital goal—to significantly increase graduation rates for full-time CCP students,” the Mayor told Councilmembers.

Cleaner and safer streets
The budget includes funding to improve the condition and safety of Philadelphia streets. Following a successful pilot in FY20, the City will significantly expand street sweeping through a $10.5 million investment in street cleaning crews and vehicles, bringing the total FY21 budget for the Streets Department to $118.5 million (not including the $51.5 million for trash and recycling disposal). Other funding and capital projects further the Mayor’s commitment to street paving and improving the condition of our roadways, as well as Vision Zero’s goal of eliminating all traffic-related deaths and severe injuries by 2030 and providing more protected bike lanes.

Inclusive and resilient neighborhoods
The budget and Five Year Plan propose significant investments to drive economic mobility, raise incomes, grow businesses, and support neighborhoods hit the hardest by crime and opioids. Included are wage increases for the youth summer jobs program, WorkReady, and $3.3 million to the Department of Public Health and Managing Director’s Office to expand prevention and analytical capabilities to address the opioid crisis.

The Five Year Plan continues historic investments in housing affordability, homeless services, and homeownership. From FY19 through the end of this Plan, $115 million is earmarked for contributions to the Housing Trust Fund. There is nearly $33 million over the Five Year Plan to expand rent support to stabilize households living in poverty, with a focus on youth aging out of foster care, low-income working families, and individuals with disabilities. The goal of this new initiative, PHLRentAssist, is to ultimately help move youth and families out of poverty by preventing eviction and housing instability.

In order to promote growth throughout the City, the Plan has over $200 million in wage and business tax cuts including an extension and acceleration of reductions to the net income side of the BIRT. No tax rate increases are being requested, and the Five Year Plan includes a major change long requested by the Philadelphia business community: moving to Market-Based Sourcing in Tax Year 2023. With Market-Based Sourcing, receipts are taxable at the location where the customer is or the benefit is received, rather than where the business does the work. This provides a better measure of the economic profit a company derives from a given marketplace.

A more diverse, efficient, and effective government
The Five Year Plan calls for $300 million in capital funding to modernize services, including streamlining and integrating business processes across finance, procurement, and other departments. The Office of Innovation and Technology will receive $22.5 million for network infrastructure improvements and other applications used by departments. Several departments will receive funding to support the transition from antiquated IT infrastructure to modern systems that will offer efficiency and customer service improvements, like the new Integrated Tax System in the Department of Revenue, which will add self-service functionality and improve operations.

Those investments are all made in the context of maintaining the City’s fiscal health. The FY21 fund balance is six percent of the budget, which is the low end of the City’s internal target, but still far below the amount recommended by experts. Having a moderate fund balance is especially important to ensure that we are prepared for an economic slowdown.

The Mayor’s Budget Address, Operating and Capital Budgets, and Proposed FY21-25 Five Year Plan are available here.