Philadelphia legislators continue to hash out a budget with the Kenney administration for the coming fiscal year with a slate of tax proposals and funding for anti-violence programs among the biggest hangups.
A City Council committee will take up the spending plan and tax cut proposals during a hearing at 2:30 p.m. Tuesday as negotiations between legislators and the Kenney administration remain ongoing.
Legislators must pass a budget before July 1.
Mayor Jim Kenney’s $5.2 billion proposed budget includes modest wage and business tax reductions that were delayed due to the coronavirus pandemic last year, nearly $35 million for anti-violence programs, and no cuts to the police department’s budget, among other things.
The Kenney administration has been circulating amendments to its wage tax cut proposal, said one person with knowledge of the situation.
Kenney spokeswoman Deana Gamble declined to detail ongoing negotiations, saying the administration “doesn’t negotiate in the press so we won’t be commenting further on the budget until we’ve reached agreement with Council.”
“We are continuing to work collaboratively with City Council toward that goal and are hopeful it will happen some time this week,” Gamble said.
Council President Darrell Clarke tightly controls the budget negotiations between the Kenney administration and legislators. Most negotiations are done behind closed doors. A spokesperson for Clarke did not immediately respond to a request for comment.
The city will receive $1.4 billion in federal pandemic stimulus funding over two years. The Kenney administration is dedicating approximately $575 million of that funding to the upcoming budget to make up for revenue shortfalls due to the pandemic.
In addition to Kenney’s wage and business tax cuts, at-large Councilmember Allan Domb has proposals to further cut the city’s wage tax and reduce the business income and receipts tax (BIRT) in the coming years; and Councilmember Cherelle Parker, the majority leader, has proposed reducing the parking tax rate to 17% from 25%.
Advocates of the tax cuts say they are needed to draw back businesses, commuters and tourists as the city recovers from the pandemic, and move the city away from its reliance on wage and business taxes to fund its budget.
Opponents of the tax cuts say they disproportionately benefit large corporations, the wealthy, and suburban commuters, who are overwhelmingly white.
Councilmember Jamie Gauthier, who represents the 3rd District in West Philadelphia, said there appeared to be tension between the Kenney administration and Council over the direction of the city’s fiscal future.
Gauthier said while the Kenney administration was aiming for tax cuts and taking a conservative approach to using federal stimulus funding, legislators wanted more investments in public spaces, gun violence prevention, and neighborhoods disproportionately affected by the pandemic.
“We should be directing resources to the populations that we want to support,” she said. “If we want to support workers, if we want to support Black and brown businesses, I think there are ways we can do that directly without broad-based tax cuts that lean more towards providing relief to the wealthy and to big corporations.”
At-large Councilmember Helen Gym posted on Twitter Sunday that she is “on record opposing nearly $500M in wage/BIRT tax cuts and a massive tax break for millionaire parking lot owners.
“No major American city is using its money to pursue tax cuts rather than invest more in our city,” she wrote. Gym did not respond to a request for comment.
Some Council members are also pushing the Kenney administration to dedicate $100 million to address the surging gun violence, which overwhelmingly affects Black Philadelphians. Gauthier and Gym have said they would not vote for a budget that does not include funding for anti-violence efforts at that level.
Councilmember Kenyatta Johnson, representing the 2nd District in South Philadelphia, said he was “pretty confident” that legislators were making headway on securing more funding for anti-gun violence initiatives in the budget that Council members have put forward.
Council members would have to advance the budget proposal and tax cut bills out of committee in order to introduce them during Thursday’s legislative session. That would allow for a final vote on the legislation on June 24 — the final scheduled session before Council members break from meeting over the summer. They still hold private meetings and community forums.
Legislation needs nine votes to pass or 12 votes to override a mayoral veto.