Mayor Cherelle Parker's $6.8 billion budget for 2026 was approved by City Council during Thursday's meeting, the last before summer recess.
The final plan wasn't drastically different from the $6.7 billion proposal in March, with both including gradual tax cuts for businesses and funding for public safety efforts. But some critics felt there weren't enough safeguards in place for looming cuts that are expected at the federal level.
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The accompanying $800 million Housing Opportunities Made Easy (H.O.M.E.) initiative, which includes money to build and preserve 30,000 housing units, was also approved.
New investments include more than $26 million in additional infrastructure investments, $3.5 million in Community Development Corporation grants and $2 million for 2026 events ahead of the semiquincentennial celebrations, according to Council President Kenyatta Johnson's office.
One of the more high-profile points in the budget involves the Business Income & Receipts Tax, which previously had an exemption that allowed small businesses to exclude their first $100,000 in revenue from taxation. But a recent lawsuit forced Parker to eliminate that tax break. To help small businesses, which are now on the hook to pay that tax, the budget implemented a gradual reduction of the tax over the next 13 years — with the net income portion dropping from 5.81% to 2.8% by 2039, and the gross receipts eventually being eliminated all together. The budget also includes approximately $40 million for grants to small businesses and assistance to those paying the tax for the first time.
"Codifying these changes will ensure that we give the business community predictability, and we give them a reliable path moving forward," Parker said during a news conference following the meeting.
Public safety also made up a large portion of the budget, with $1.9 billion in general fund spending allocated for police, fire, prisons and criminal justice functions, according to a report from the city controller's office.
Additionally, the plan includes $792 million for SEPTA, which is facing a $213 million budget deficit and expects to hike fares and reduce service in the coming months to make up the difference. It also includes $30 million for Vision Zero and a $1 per hour increase in rates for parking meters in Center City, with the money going toward the School District of Philadelphia.
At-Large Councilmember Kendra Brooks, a member of the Working Families Party, opposed all of the budget bills. Councilmembers Katherine Gilmore Richardson (D-At-Large), Jeffery Young Jr. (D-5th) and Brian O'Neill (R-10th) opposed raising the Realty Transfer Tax from 3.27% to 3.57%, and Councilmember Mike Driscoll (D-6th) voted against a provision to repeal the Development Impact Tax, which put a 1% tax on the costs of new construction or improvement projects above $15,000.
Following voting, Brooks said the budget's passage was a disappointment and that the plan overwhelmingly benefitted large corporations despite apprehension about expected cuts from President Donald Trump's administration.
"The budget that we are rolling on today is largely unchanged from the mayor's proposal," she said. "City services are flat-funded or cut at a time when we need them the most. Across the country, and including in Harrisburg, legislatures worried about Trump's cuts are increasing state and local funding for services and identifying new revenue sources. Not this budget."
Councilmember Curtis Jones (D-4th) pushed back on Brooks' comments, admonishing her to "look at the glass half full."
"We are all in the Philadelphia foxhole together right now," Jones said. "We've got to pull ourselves together and say 'I'm going to hold my nose on this vote, and I'm going to go with it for the benefit of the whole of Philadelphia.'"
Advocates and public commenters present at Thursday's meeting erupted in shouts to "tax the rich" and booed upon the passage of the budget bills. Sam Lew, an organizer with the Abolitionist Law Center, called it an "attack on working class Philadelphia."
"We're still pouring money into jails, a place where pregnant moms are in solitary confinement … and where incarcerated people are paid just $2 per day to run this jail," Lew said. "Instead, we need life-saving services like healthy homes, mobile crisis teams."
