Mayor Jim Kenney is seeking to increase Philadelphia's property tax, parking tax and nonresident wage tax to help plug an expected $649 million budget gap stemming from Covid-19.
The revised budget proposal for fiscal year 2021 provides a jarring glimpse into the impact the coronavirus pandemic is having on Philadelphia's bottom line. Kenney's original budget called for revenue of $5.18 billion, which has been revised down to $4.695 billion.
Under the proposal, the wage tax for nonresident workers would rise from 3.4481% to 3.5019%. The wage tax will not increase for Philadelphia residents who also work in the city.
The parking tax rate of 22.5% would increase to 27%.
The property tax rate would rise by 3.95%, the equivalent of $58 on a home assessed at $150,000.
Kenney is also seeking to freeze the current rate for the Business Income & Receipts Tax, or BIRT, which had been expected to decrease in fiscal 2021. The freeze will enhance the city's revenue by $2.6 million.
Increasing the property tax will support an additional $30 million from the general fund to help cover deficits to the School District of Philadelphia that are larger than projected. The proposed general fund contribution to the school district is $252 million in fiscal 2021, which starts July 1.
Kenney's move to shore up funds also includes a citywide hiring freeze that went into effect April 20. Part-time, temporary and 800 seasonal jobs will be cut effective June 1, with the exception of positions related to Covid-19 public safety and operations. The city will not open public pools this summer.
The budget plan includes salary reductions for all exempt city employees making more than $35,000 annually. The reductions will range from 1% to 7% depending on income level.
The proposal also calls for agencies to cut $43 million in funds that had been earmarked for projects in fiscal 2021. For example, $4 million proposed as part of a transformation at the Philadelphia Zoo and $1.5 million for the East Market project in Center City are expected to be cut.
Citywide street sweeping, expected to cost between $10 million and $11 million, will also be put on hold.
Philadelphia — and much of the country as a whole — has been under stay-at-home orders that have virtually crippled municipalities and their economies.
The revised budget requires approval by City Council.