Philadelphia council members hear FY26 budget proposal that would cut some business taxes, borrow for housing and boost public safety and wellness spending

Philadelphia City Council officials outlined the mayor's proposed fiscal year 2026 budget at a community hearing in East Oak Lane, presenting proposals to change business and wage taxes, borrow for a large housing initiative and increase spending on public safety, neighborhood cleaning and a city-run wellness program.

Council President Kenyatta Johnson opened the meeting by framing the presentation as a starting point: "this is only a proposal. Again, what you're gonna see on the screen and what's gonna be discussed this evening is only a proposal," he said, urging residents to provide feedback as council negotiates a final plan.

Helen Lawhead, the council's chief financial officer, walked through the mayor's proposal. She described two main budget categories and key revenue and spending assumptions: the city's operating budget for day-to-day services and a separate capital budget for longer-term projects. Lawhead said the proposal covers five years and includes substantial new spending: roughly $2.3 billion in new operating commitments and about $1.5 billion in capital investments over five years, with near-term additions in FY26 the administration flagged as proposals to be refined by council.

The plan would propose changes to Philadelphia's tax structure, including a phased reduction to the Business Income and Receipts Tax (BIRT/BERT) and cuts to the wage tax for residents and nonresidents. To soften the near-term effect on small companies, the proposal would set aside $30 million per year ($150 million over five years) as a transition fund for small businesses, Lawhead said.

Major program highlights cited by Lawhead included:

- Housing: the mayor's Housing Opportunities Made Easy (HOME) initiative would be supported by a proposed $800 million borrowing. The administration projects $263 million in debt-service needs over five years to pay that borrowing.

- Public safety: the largest single portion of proposed new operating spending in FY26 would go to public safety. Lawhead said about $186 million of the nearly $356 million in new FY26 operating commitments would be targeted to public-safety initiatives, including a proposed $67 million five-year commitment for a new forensic science center and $25 million in FY26 for anti-violence grants.

- Clean and Green and capital projects: roughly $337 million in proposed new capital spending in FY26, with about $122 million focused on cleaning and beautification programs, and significant capital for public-safety infrastructure.

- Schools and youth programs: the mayor proposes an additional $12 million toward the school district to expand an extended-day, extended-year program from 25 to 40 schools, serving up to 9,700 students for before- and after-school care.

- Workforce and economic opportunity: the proposal includes about $10 million for workforce development tied to the City's municipal employment and apprenticeship pathways, plus funding for the Pennsylvania Horticultural Society and corridor studies.

- Wellness and substance-use response: Lawhead and council members described a proposed wellness program that the administration is resourcing. Councilmember Catherine Gilmore Richardson noted council acted on a mid-year transfer ordinance earlier in the week that shifts money toward the wellness effort: "Today, we did pass our mid-year transfer ordinance... and as a part of that transfer, there was $40,000,000 for the wellness ecosystem," she said. Council members described a larger five-year wellness investment the administration projects as approximately $216 million in operating commitments across FY26'FY30 and additional capital funding for related facilities.

Council members and staff stressed the proposal's tentative status and the schedule for council hearings. "City council is finishing up their hearings over the next couple weeks, to tweak this proposal and reach a final adopted budget," Lawhead said.

Why it matters: the mayor's draft ties large revenue changes (tax reductions for businesses and changes to wage tax policy) to major new borrowing and programmatic commitments for housing, public safety and wellness services. Council members said they will consider residents' priorities and refine the plan before adoption.

The hearing included multiple resident questions about specific line items and local impacts, from the sugar-sweetened beverage revenue that funds early-childhood programs and park rebuilds to requests for more detail on how proposed tax reductions are meant to spur job growth.

Votes at a glance: council members said the body passed a mid-year transfer ordinance earlier the same day that includes a $40 million allocation to support the wellness ecosystem; that ordinance was described by Councilmember Catherine Gilmore Richardson as having passed in the morning session.

What council and staff said next: council members asked residents to submit written testimony and said council will hold budget hearings across districts before voting on a final FY26 budget. Lawhead and other staff said the numbers on screen are administration proposals and remain subject to change through council's deliberative process.

Ending: Council members closed the hearing by thanking residents for feedback and reminding attendees that the presentation represented a draft proposal and that council would continue district-level hearings and fiscal review before adopting a final budget.