Highlights adoption of AVI and new investments.
June 20, 2013– Mayor Michael A. Nutter praised Council President Darrell Clarke, City Council and Administration officials for passing the FY14 Budget and Five Year Plan, including the adoption of the Actual Value Initiative and a 1.34% property tax rate with a $30,000 Homestead Exemption and $20 million in gentrification relief, as well as new investments in public safety, labor obligations and government efficiency.
“I want to thank Finance Director Rob Dubow, Budget Director Rebecca Rhynhart and their staff and Council President Clarke and City Council for their hard work throughout the budget process,” said Mayor Nutter. “The City of Philadelphia has passed a common-sense budget that focuses on the historic overhaul of the City’s property assessment system through the Actual Value Initiative, creating for the first time a system that is fair, accurate, understandable and more transparent. The budget implements a majority of cost-saving operational efficiencies from the recommendations by FTI Consulting and new investments in the safety, education and health of every citizen.”
The FY14 Budget totals $3.8 billion, about a $190 million increase from FY13 expenditures. The budget increase includes about $20 million in new investments, more than $60 million for pension, debt service and employee costs and more than $100 million for labor obligations, including $20 million for the Philadelphia Police Department award and $84.7 million of appropriations for potential labor obligations:
- $37.2 million to fund potential costs for future contracts with the International Association of Fire Fighters (IAFF), District Council 33 and District Council 47; and
- $47.5 million for potential costs related to the IAFF award currently under appeal.
The FY14 Budget includes funding to increase the Philadelphia Police Department strength to 6,525 officers and increase the Philadelphia Fire Department strength to 2,216 fire fighters with a class of 160 cadets this summer.
The FY14 Budget also includes $20 million in new investments, including:
- $1.7 million for the Office of Property Assessment’s property assessment function;
- $1.3 million to partially replace cuts related to the federal sequestration to the Department of Public Health and the Office of Supportive Housing;
- $1.2 million to improve delinquent tax collection for the Department of Revenue;
- $1 million for the Free Public Library to expand branch hours;
- $1 million to offset tuition increases at the Community College of Philadelphia;
- $781,000 for the Department of Licenses and Inspections to hire additional code enforcement inspectors and building inspectors;
- $624,000 to fund the KeySPOTS program; and
- $622,000 of funding to the Department of Public Property for its maintenance team.
Taking into account the City’s revenue and obligation projections, the FY14 projected General Fund balance level is approximately $87 million.
Beginning July 1, the City will resume the Wage Tax Reductions that were suspended during the Great Recession. Over the course of the Five Year Plan, wage and business tax payers will see more than $325 million in rate reductions.
“The last week has been historic for the City of Philadelphia’s finances. Within one week, the Administration and Council: agreed on a tax rate to go with our move to accurate assessments; agreed on an operating budget; and put in place the City portion of a plan to restore the School District to fiscal health,” said Finance Director Rob Dubow. “While all that was happening, the City got a rating increase from Standard & Poor’s – reaching the A category for the first time in over three decades.”
In addition, the City has proposed $73 million in additional revenue for the School District of Philadelphia through strengthened tax collection efforts on current and delinquent taxes and a $2 per pack cigarette tax, which is still awaiting state approval.