Preliminary Philly Budget to Reduce Police Funding by $14M, Adds Reforms

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Amid widespread protests calling for the defunding of police departments, as well as economic shortfalls caused by the coronavirus pandemic, Philadelphia's City Council on Wednesday gave preliminary approval to a budget proposal that would reduce police funding by $14 million while implementing reforms and allocating millions to anti-poverty measures.

City Council’s Committee of the Whole gave initial approval to the $4.9 billion budget for the 2021 fiscal year on Wednesday. The proposal would invest $25 million in anti-poverty measures and $20 million in affordable housing while restoring funding for the arts.

The proposed budget comes amid nationwide protests demanding police reform in the wake of George Floyd’s death, and follows a projection earlier in the month of a $749 million shortfall caused by the coronavirus pandemic and the city’s subsequent shutdown.

It’s also a reversal of Mayor Jim Kenney’s original plan to increase funding to the police department by $19 million. The mayor later pulled back on that proposal after 14 of the city’s 17 council members signed a letter objecting to the funding increase and calling for the city to “recalibrate” budget priorities.

“The COVID-19 pandemic and unrest in our city and country these last few weeks have magnified the disparities that were glossed over by a booming economy and years of cutting resources from our country’s social safety net,” City Council President Darrell Clarke (D-5th District) said in a statement following Wednesday’s vote.

“The lack of access to affordable housing, health care, living wage jobs and healthy foods has been exposed by these crises – along with many problems. We cannot go back to that old normal. We need to create a ‘New Normal’ and address these disparities head on. I believe this budget is an important start towards doing that.”

John McNesby, president of the Fraternal Order of Police Lodge No. 5, which represents law enforcement officers in the city, did not take kindly to the budget proposal, saying in a statement that "city leadership has turned its back on the residents and police department" and that the proposed budget is "both reckless and irresponsible."

"Our political leadership is tone deaf and blind to the realities of public safety in our city by implementing these drastic budget cuts," McNesby said, arguing that the cuts would also affect police community outreach efforts.

A City Council spokesperson said they worked with their finance team and the Kenney administration to close the gap and produce a balanced budget by the June 30 deadline.

In a statement, Kenney thanked the City Council for “stepping up as true partners throughout the most difficult budget process I have ever experienced” and for showing “a level of seriousness and dedication that matches the gravity of the situation facing Philadelphia, both in terms of the COVID-19 pandemic and our shared desire to work toward social justice and racial equity.”

The mayor expressed disappointment that the new proposal will reduce some city services and cut “hundreds” of jobs, but said his administration and City Council “prioritized core services, protected our most vulnerable residents, and maintained our financial flexibility to enable a quick rebound.”

The proposal will get a first reading during the council's regular meeting Thursday. It includes the following actions:

POLICING

The reduction in police spending calls for the following reforms:

• Body cameras for police officers

• Implicit bias training for police

• Engage mental health professionals for police-assisted diversion

• Equity Manager for the police force

• Transfer funding for crossing guards ($12.3 million) and public safety enforcement officers ($1.9 million) to Managing Director’s Office (MDO)

• Create a Deputy Inspector General for police-related investigations (in MDO)

• Fund a Police Oversight Commission ($400,000 to MDO)

• Additional funding for the Public Defender ($1.2 million)

ADDITIONAL INVESTMENTS FOR PHILADELPHIA 

New Normal Budget Act. $25 million in the budget is earmarked to address healthcare needs, healthier food options, affordable housing, anti-poverty efforts, job training and other measures to "address the disparities laid bare by COVID-19 and the unrest in Philadelphia following George Floyd’s murder."

Quality, Affordable Housing. An increased investment of $20 million for the Housing Trust Fund.

Adult Education. $1.45 million for Adult Education.

Arts and Culture funding. $1.35 million in funding slated for elimination due to COVID-19’s impact has been restored, through the Cultural Fund and African-American Museum

Criminal justice reform.  $825,000 in funding for Re-Entry Services

FIRE DEPARTMENT 

The Kenney Administration and City Council agreed to hold the Philadelphia Fire Department to its Fiscal Year 2020 level of funding which they say will generate $5 million in savings. 

REVENUES 

City Council says the Non-Resident Wage and Net Profit Tax will increase to 3.5019%, below the rate for Philadelphians of 3.871%. 

“This slight increase goes along with a decision not to seek a reduction in the Resident Wage Tax, as previously planned,” a City Council spokesperson wrote. “Together, these changes should generate $17.2 million in FY21. For a commuter earning $50,000 a year, this would increase his/her wage tax by $27 a year, or $1 per pay period. The tax increase is sunsetted after one year.”

“The Parking Tax will increase from 22.5% to 27% to generate an additional $17 million in FY2021. The tax increase is sunsetted after one year.”

PENSION DEBT RESTRUCTURING

City Council and the Kenney Administration agreed to a pension bond debt restructuring they say will generate savings of about $80 million in Fiscal Year 2021. 

"It is extremely disappointing that at this time we are not able to move forward with some of the crucial investments I proposed back in March, before the pandemic and resulting economic downturn were felt in Philadelphia," Mayor Kenney wrote.

"And it pains me that this budget reduces some City services and eliminates hundreds of jobs. Still, we have prioritized core services, protected our most vulnerable residents, and maintained our financial flexibility to enable a quick rebound."