Broad Street Brief Special Edition: FY26 City Budget Address Recap

Mayor Cherelle Parker’s “One Philly 2.0” Budget Address

On Thursday, March 13, Mayor Cherelle Parker delivered her second annual Budget Address to the Philadelphia City Council, unveiling her $6.77 billion FY26 Budget proposal—an approximately $400 million increase over the FY25 budget approved last June. The proposed FY26-30 Five Year Plan and FY26-31 Capital Program include $2.30 billion in new operating investments and $1.47 billion in capital investments over six years.

Her speech noted the success of the FY25 “One Philly Budget” in creating “a safer, cleaner, and greener city, with access to economic opportunity for all,” citing significant reductions in violent crime; the cleaning of more than 67,000 streets, the towing of 11,617 abandoned vehicles, and the cleanup of 17,319 vacant lots; and the opening of 25 extended day and year-round school programs. She also highlighted the City’s strong fiscal health, including a projected $280 million in the Budget Stabilization Reserve Fund and the highest combined credit ratings in decades.

Mayor Parker’s proposed FY26 budget—which she dubbed “One Philly 2.0”—aims to build on the administration’s successes by continuing to invest in these critical areas, as well as preparing for major events in 2026 and reducing business taxes. Read the full transcript of the mayor’s speech here. Below are some of the highlights of the Mayor’s budget proposal.

FY26 budget hearings in the Committee of the Whole are scheduled to begin on Tuesday, March 25 and will conclude in early May. Subsequent negotiations between lawmakers and the administration will aim to finalize budget amendments, with preliminary approval expected in early June—ahead of Council’s last scheduled meeting on June 12 and the end of the current fiscal year.

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Economic Opportunity & Tax Reform

Mayor Parker proposed lowering the City wage tax and the Business Income & Receipts Tax (BIRT) to make Philadelphia more competitive and create jobs. Proposed changes to the tax structure include:

• Reducing the net income portion of BIRT by more than half to 2.8% within seven years of the pension fund reaching 100% funded status in FY33, with an immediate reduction of the net income portion from 5.81% to 5.71% in the next year.
• Eliminating the gross receipts portion of BIRT entirely over the same seven-year period, with an immediate reduction from 0.1415% to 0.141% in the next year.
• Reducing the wage tax for Philadelphia residents to 3.7% and for non-residents to 3.39% by FY30, with an immediate reduction from 3.75% to 3.74% for residents and 3.44% to 3.43% for non-residents in the next year.
• Removing the existing exclusion of the first $100,000 in gross receipts due to anticipated legal challenges.
• Repealing the 1% Construction Impact Tax to further support economic growth.
• Increasing the real estate transfer tax from 3.278% to 3.578% of the sale price or assessed value of a property.

The total cost of proposed tax reforms through FY30 is estimated by the administration to be $210 million, with approximately $110 million allocated for wage tax reductions and $100 million for BIRT reductions. The proposed budget also includes more than $451 million in operating investments in economic opportunity, including:

• $30 million annually ($150 million over five years) to establish a Jumpstart Business Program.
• $250,000 in FY26 for Creative Philadelphia night time economy programming.
• $150,000 for a tax incentive study.

Housing

Mayor Parker highlighted the recent launch of the administration’s Housing Opportunities Made Easy (HOME) initiative, designed to build or restore 30,000 housing units—an historic and unprecedented investment. The proposed budget includes:

• $800 million over five years to the HOME Initiative, with $400 million in bonds to be issued in FY26.
• $11 million over five years to Planning & Development for 32 new positions and consultant support.
• $300,000 annually in tangled title investments, funded by a proposed $3 increase to the Document Recording Fee.

Public Safety

Mayor Parker emphasized the importance of public safety investments, including funding for additional police officers, new equipment, and initiatives to combat violence and improve street safety. The budget includes $746 million in new operating and $289 million in capital funding, including:

• $67 million for a new Forensics Lab in West Philadelphia.
• $25 million in FY26 for anti-violence grants and $3.4 million over five years to backfill expiring anti-violence grants.
• $5 million in FY26 and $30 million through FY31 for Vision Zero initiatives.
• $2.8 million to expand the Police Assisted Diversion unit in FY26 as a pilot.
• $2.5 million to upgrade Fire Department medic units.
• $1.4 million in new technology costs for the Fire Department.
• $1.25 million annually for 21st-century wage requirements for Homeless Services.

Clean & Green Initiatives

Mayor Parker emphasized that significant investments in cleaning and greening initiatives enhance Philadelphians’ overall quality of life. She highlighted the allocation of funds for street cleaning, maintaining vacant lots, and improving parks and recreational facilities, with $65 million in new operating investments and $752 million in capital funding, including:

• $1.5 million annually to the Delaware River Waterfront Corporation (DRWC) to maintain land under I-95.
• $2.7 million over five years in new planters.
• $1 million annually in turf and landscape maintenance.
• $160,000 annually for supplies for Parks & Recreation.
• $500,000 in new youth sports funding.
• $750,000 annually to the Office of Clean & Green Initiatives.
• $75,000 annually for an Environmental Justice position.
• $1.7 million annually for the Pennsylvania Horticultural Society for year-round cleaning of vacant lots.
• $716 million in operating support to SEPTA from FY26 through FY30.
• $7 million in capital support to SEPTA from FY26 through FY31.

2026 Preparedness

Mayor Parker emphasized the importance of preparing for the nation’s 250th birthday celebration and other major events that the city will be hosting in 2026 to ensure Philadelphia is “ready to welcome the world.” The budget includes significant funding for special events, partnerships, and safety measures to elevate Philadelphia on the global stage, with a total $100 million proposed allocation, including:

• $1.5 million over two years for vehicle rentals, portable restroom rentals, increased travel expenses, and communications support through the Offices of the City Representative and Special Events.
• $750,000 for highway beautification through the Community Life Improvement Program (CLIP).
• $500,000 for supplies through Parks & Recreation.
• $500,000 for clean and green supplies.
• $250,000 for tree pruning.
• $250,000 to prepare Lemon Hill for events around the 2026 FIFA men’s World Cup network connectivity through the Office of Transportation & Infrastructure Systems (OTIS) and Parks & Recreation.
• $500,000 in FY26 and FY27 for increased outreach through Behavioral Health.

Wellness

• $175 million for recovery-based housing, clinical services, and medical care.
• $216 million in wellness ecosystem operating funds from FY26-FY30.
• $500,000 annually for opioid-related outreach to address overdose disparities.
• $855,000 in FY26 and FY27 for wound care.
• $4.3 million annually for Medication Assisted Treatment (MAT) at the Prisons.
• $2.8 million annually to continue 175 homeless services beds.

Workforce

• $550 million in Labor Reserve funds for the City to negotiate and reach multi-year agreements with the City’s four municipal unions.
• $5 million annually in SEPTA benefits for employees.
• $5.7 million over five years in strategic human resource investments.
• $225,000 for lactation pods for the Fire Department.
• $350,000 annually for Police Department recruitment.

Education

Mayor Parker emphasized the importance of education investments to support the city’s youth,  highlighting  the expansion of extended day and year-round school programs, adding over 7,000 new slots for educational enrichment.

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