Philadelphia, like many cities, received crucial federal funds to respond to COVID-19. But those dollars aren’t recurring and have a spending deadline looming. After that, the City will need to balance its books and provide for City service delivery on its own or face a fiscal cliff (a sudden and severe imbalance in revenues and spending). Despite careful planning:
•Revenue growth faces challenges, like the recent fluctuations in the Realty Transfer Tax
•Planned budget cuts may impact services.
•The FY28 fund balance of $86M is about $1B less than recommended (yikes).
As the Parker Administration proposes its first budget and the FY25-29 Five-Year Plan this spring, it will need to make sure that Philadelphia navigates the end of the federal funds while maintaining an adequate fund balance. To keep PICA Tax and other state funds flowing to the City, PICA will be looking for in the FY25-29 Plan:
•Reasonable revenue estimates.
•Realistic operational expenses.
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