PHILADELPHIA – The Pennsylvania Intergovernmental Cooperation Authority (PICA) Board voted unanimously today to approve the City of Philadelphia’s Fiscal Year 2027-2031 (FY27-31) Five Year Financial and Strategic Plan. The approval was based on PICA staff’s finding that the Five Year Plan is balanced in each of its years and that its projections are based on reasonable and appropriate assumptions.
The Approved FY27-31 Plan delivers strategic, high-impact investments that make life more affordable, expand access to economic opportunity, and advance financial empowerment for Philadelphia residents. The Plan also strengthens public safety efforts, enhances cleaning and greening initiatives, increases access to housing, invests in education, supports workforce development, and improves neighborhood quality of life across Philadelphia.
In its review of the Plan, PICA staff concluded that the Five Year Plan is balanced in each of its years and is built on reasonable revenue and spending projections. Staff also commended the City for the following elements included in the Five Year Plan:
Improving the health of the Pension Fund;
Planning deposits to the Budget Stabilization Reserve Fund in FY27 and FY28, bringing the projected total balance to nearly $355 million;
Reducing projected operating deficits in the coming years with anticipated operating surpluses by the end of the Plan period;
Maintaining stable credit ratings; and,
Preserving a Labor Reserve to responsibly plan for collective bargaining agreements.
PICA staff also recommended that the City continue building its fiscal reserves over time, noting that the City’s unrestricted reserves fall below the Government Finance Officers Association’s recommended benchmark level of 17 percent of revenues in each year of the Plan.
“I want to thank the members of the PICA Board and PICA staff for their thoughtful review and their continued partnership,” said Mayor Cherelle L. Parker. “Maintaining the City’s fiscal health is essential to everything we hope to accomplish for Philadelphians. This approval affirms that we can continue to make responsible investments in safer, cleaner communities, affordable housing, economic opportunity, and the services residents rely on every day while continuing to strengthen our financial future.”
The PICA Board also voted to elect Alan Kessler as its new chair, succeeding Kevin Vaughan, who served as chair for 10 years and will remain a member of the Board. Vaughan helped guide PICA through the fiscal challenges of the COVID-19 pandemic and a period in which the City strengthened its financial position, achieved its highest credit ratings in decades, and continued progress toward fully funding its pension system.
“I am excited to work with Alan in his new role and grateful to Kevin for his extraordinary leadership and decades of service to Philadelphia,” said Mayor Parker. “Alan has a long history of leadership and dedication to making our city and our nation better, and I know he will bring that same commitment to this role. Kevin’s steady guidance over the last decade helped Philadelphia navigate extraordinary fiscal challenges and make significant financial progress. Our city is stronger because of his service.”
PICA is Philadelphia’s independent state fiscal oversight authority. Each year, the City submits a Five Year Plan to PICA for review and approval The Board evaluates the Plan based on criteria outlined in the PICA Act, including the maintenance of positive fund balances and the use of reasonable assumptions for revenue and expenditure projections. If a Plan is not approved, the Commonwealth can withhold hundreds of millions of dollars in funding until a revised and balanced Plan is resubmitted and subsequently approved by the PICA Board.
The Approved Fiscal Year 2027-2031 Five Year Financial and Strategic Plan is available on the Office of the Director of Finance’s website.