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Coronavirus Philadelphia: City Budget Facing Hundreds Of Millions Of Dollars In Cuts Due To Pandemic

PHILADELPHIA (CBS) -- We are less than one day away from Philadelphia Mayor Jim Kenney releasing his proposed budget. It's expected to include a revenue shortfall of hundreds of millions of dollars because of the COVID-19 pandemic.

Kenney initially presented a budget last month but he essentially had to start all over again because of the pandemic and a lack of taxes being collected while businesses are shutdown. Meanwhile, City Council is working, too.

Some Philadelphia councilmembers held an online roundtable with constituents Thursday morning to discuss the financial challenges looming over the city.

"If we're going to make cuts, can we do that without laying off and furloughing personnel?" City Council President Darrell Clarke said.

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Philadelphia's projected tax shortfall stands between $340 million to $650 million through June 2021, according to a report released this week by the controller's office, which oversees the city's spending.

"It's a lot of money," City Controller Rebecca Rhynhart said. "There needs to be a real introspection in how the city is running itself."

Still, Rhynhart believes a tax increase and layoffs could be avoided if other restraints are put in place.

"For example, overtime has gone way up over the last few years," Rhynhart said. "The city could easily save $40 million if they better managed that. The city could hold positions constant and not add the positions it was anticipating adding. And that's another $30 million to $40 million."

While the budget is expected to be released Friday, Eyewitness News learned some details about it from sources.

  • The city will see $370.4 million in reductions
  • A hiring freeze in effect as of Thursday
  • A reduction in part-time and temporary employees
  • The city will also be looking for a lot of one-time cost reductions, like possibly not hosting the July 4 Welcome America Festival this year
  • The city is committed to keeping all libraries and recreation centers open, but hours may be reduced
  • Pools may not open in part because of the budget, but in part because of social distancing
  • The city may also dip into the Rainy Day Fund by $34 million

Kenney confirmed on Thursday that police and fire union members will not see pay cuts.

"They are facing this virus similar to doctors and nurses and hospital personnel are, and we felt it was appropriate to pay them," Kenney said.

The hiring freezes and layoffs won't apply to positions related to battling COVID-19 or for public safety personnel.

Equipment upgrades like a planned replacement of emergency radios for first responders are being delayed.


The budget proposal calls for a nearly 4% hike in the city's property tax, would raise the parking tax 4.5% to 27% and increase the nonresident wage tax by about 0.5%.

"Guess what, the taxpayers don't have much in the pocket," Clarke said.

Clarke wasn't too happy about the burden the budget would put on those living in the city.

Councilmembers say everything will be on the table to try to maintain city services.

"We've been hearing that for weeks, that every department will have to cut deep and look for opportunities to shave off their budget upwards of 20%," Councilmember Katherine Gilmore Richardson said.

Kenney is expected to release his new budget Friday morning.

City Council must hold a hearing on the proposal before the start of the July 1 fiscal year.

CBS3's Matt Petrillo and Greg Argos contributed to this report.

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