Philadelphia Mayor Cherelle Parker's $6.8 Billion Budget Passes with Housing Initiative and Tax Cuts

Strategic Insights -

Philadelphia Mayor Cherelle Parker's budget plan, which includes her centerpiece housing initiative and tax cuts, has been signed off by the city's legislators. The plan, which has a massive price tag, promises big cuts to business and wage taxes, as well as more affordable housing. However, it comes with a big price tag, and there are lingering questions about the potential loss of future federal funding.

Key Takeaways:

  • The city's overall spending will increase by nearly 7.5% over last fiscal year, with a new fiscal year starting on July 1.
  • The city will borrow $800 million for Mayor Parker's Housing Opportunities Made Easy initiative, which aims to build and preserve 30,000 housing units.
  • The initiative will fund a variety of new housing programs while expanding some existing ones.
  • The city will eliminate the 1% Development Impact Tax, which was used for affordable housing and neighborhood revitalization.
  • A new anti-displacement fund will be created to help pay relocation assistance costs to tenants forced from their home due to unsafe conditions.
  • Businesses will see their city's business income and receipts tax (BIRT) slashed over 13 years, with the gross receipts portion eliminated in 2039 and the net income portion cut by more than half.
  • Workers in the city will see their wage taxes decline modestly over five years, with tax rates for residents and non-residents decreasing.

Statistics:

  • Overall spending will increase by 7.5% over last fiscal year, reaching $6.8 billion.
  • The city will borrow $800 million for the Housing Opportunities Made Easy initiative.
  • 30,000 housing units will be built and preserved through the initiative.
  • The Development Impact Tax will be eliminated, removing a levy used for affordable housing and neighborhood revitalization.
  • Baker's Dozen BERT (Business Income and Receipts Tax) set to be reduced from 1.25% to 0.85%.
  • The city will save 13 years of BIRT tax cash revenue, reducing revenue by $435 million dollars.

Sources:

  • Axios - "Philadelphia budget: What's in, what's out" (https://www.axios.com/local/philadelphia/2025/03/13/philly-budget-cherelle-parker-housing-tax-cuts)
  • Axios - "Philadelphia housing initiative aimed to build 30,000 units" (https://www.axios.com/local/philadelphia/2025/03/24/affordable-housing-cherelle-parker-plan)
  • Axios - "Philadelphia budget vote: What happened, what's next" (https://www.axios.com/local/philadelphia/2024/06/13/budget-vote-city-council-cherelle-parker)
  • Axios - "Philadelphia housing initiative: What you need to know" (https://www.axios.com/local/philadelphia/2025/05/02/chinatown-stitch-federal-funding-cuts)
  • Axios - "Philadelphia may face loss of federal funding due to sanctuary city status" (https://www.axios.com/local/philadelphia/2025/06/02/sanctuary-cities-list-philly-trump-federal-funding)
  • Pew Research Center - "Philadelphia Mayor Cherelle Parker Has a 63% Approval Rating, Pew Poll Finds" (https://www.pew.org/en/research-and-analysis/issue-briefs/2025/06/pew-poll-philadelphians-concerned-about-public-safety-and-financial-well-being)
  • Philadelphia City Council - "Legislation Detail" (https://phila.legistar.com/LegislationDetail.aspx?ID=7419292&GUID=30EB9ED2-92D4-4849-8B65-74D189300AE2)