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Council members, CDCs and advocates back proposed Community Capacity Building Fund; revenue office flags fiscal cost of tax credit alternative
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Summary
The finance committee heard competing views on a bill (250324) to expand funding for community development corporations (CDCs). CDC leaders urged multiyear flexible operating support; the Departments of Revenue and Commerce questioned fiscal cost and administration and recommended exploring grants instead of tax credits.
Community development corporations and their city supporters urged the finance committee to approve a new Community Capacity Building Fund (bill 250324) that would provide multi-year, flexible operating support for CDCs across Philadelphia. Proponents said CDCs deliver neighborhood stabilization, affordable housing production, commercial corridor revitalization and eviction prevention and argued predictable multi-year funding would help retain staff and expand services.
Rick Sauer of the Philadelphia Association of Community Development Corporations, Jamila Harris Morrison of Achievability, Majid Rashid of Nicetown CDC and others testified that CDCs recently handled pandemic-era emergency responses and continue to deliver affordable housing, commercial corridor investments, vacant-land management and community services with limited operating budgets. The proposed program would either expand an existing CDC tax credit (raising the per-business credit cap to $125,000 and enabling up to 50 additional nonprofits to receive credits) or allow the administration to operate two new grant programs totaling $6.875 million annually, at the administration’s discretion.
Revenue Commissioner Kathleen McColgan testified for the administration and said expanding tax credits would reduce simplicity in the tax system and risk fiscal impact. Revenue’s fiscal note estimated the proposed expansion could reduce real estate tax revenue by approximately $30.1 million over the FY26–FY35 plan if structured as tax credits, and the Department of Revenue and Commerce recommended holding the bill to develop alternatives including grant-based options that the city could more directly target.
Councilmember Gauthier, sponsor of the bill, and many CDC witnesses said the city should prioritize the grants or the tax-credit expansion because federal funding streams are uncertain and CDCs need predictable operating support to meet expanded responsibilities under the proposed HOME initiative and ongoing neighborhood needs. CDC leaders described the fund’s envisioned impact: funding for staff, IT infrastructure, matching funds for capital projects, and multiyear program planning.
No formal committee vote was recorded at the hearing; Revenue and Commerce asked for additional time to collaborate on a fiscally workable implementation approach.
