Philadelphia City Council proposes $2.3B operating budget and new tax reforms for FY 2026

Philadelphia City Council has unveiled a comprehensive budget proposal for the fiscal year 2026, emphasizing significant investments in public safety, housing, and community development. During the town hall meeting on May 29, 2025, Chief Financial Officer Helen Lawhead outlined a plan that allocates $2.3 billion for new operating expenses and nearly $1.5 billion for capital projects over the next five years.

A key highlight of the proposed budget is the focus on public safety, with over $186 million earmarked for initiatives aimed at enhancing community security. This includes funding for a new forensic science center and anti-violence grants, as well as investments in body cameras for prison staff. Additionally, the budget proposes $337 million in new capital spending, with a significant portion directed towards "clean and green" initiatives to improve neighborhood cleanliness and beautification.

The budget also addresses economic opportunities, proposing $10 million for workforce development through the City College of Municipal Employment and additional funding for the Pennsylvania Horticultural Society. Notably, the plan includes $12 million to support the school district's extended day program, expanding services to nearly 9,700 students.

In a move to support housing initiatives, the city plans to borrow $800 million to fund the Housing Opportunities Made Easy initiative, with $263 million allocated for repayment over the next five years. The budget also sets aside $550 million in labor reserves to facilitate negotiations with municipal unions.

Tax reforms are also on the table, with proposals to reduce the business income and receipts tax and lower the wage tax for both residents and non-residents. To assist small businesses in adapting to these changes, the city plans to allocate $30 million annually over the next five years.

As Philadelphia prepares for significant events in 2026, the budget includes $100 million for related initiatives, complementing a separate $500 million investment from the airport.

This budget proposal reflects the city's commitment to addressing pressing community needs while navigating fiscal challenges, ensuring that residents' voices are heard in the decision-making process. The council encourages public engagement as they finalize the budget, emphasizing the importance of community input in shaping Philadelphia's future.