Philadelphia passed a fiscal 2014 budget with 5% more spending than its fiscal 2013 budget.
The fiscal 2014 budget is $3.8 billion, about a $190 million increase from fiscal 2013.
Among the increases are more than $60 million for pension, debt service and employee costs, and more than $100 million for labor obligations.
The city anticipates a general fund balance on June 30, 2014 of approximately $87 million. This is 2.3% of its fiscal 2014 budget.
“The last week has been historic for the city of Philadelphia’s finances,” said finance director Rob Dubow on June 20. “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. 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.”
Mayor Michael Nutter is proposing the city give $73 million to the Philadelphia school district, to alleviate the district’s severe financial stress. This is not part of the budget. If it goes forward, the city council would have to be address the proposal as an addendum.
The city plans to get the $78 million from a cigarette tax and from improved tax collection methods. The cigarette tax needs approval from the state government. It is advancing in the legislature, said Philadelphia spokesman Mark McDonald. Philadelphia expects it would generate $45 million in the first year and $87 million in the second year.
The improved tax collection methods should generate $28 million in the first year, McDonald said.
