Photo: Phila. City Council
The first week of hearings on Philadelphia’s FY 2026 budget ends with the Working Families Party weighing in on tax policy.
By Denise Clay-Murray
Right now, if you’re expecting something from Philadelphia City Council that’s not connected to Mayor Cherelle Parker’s $6.7 billion budget, it probably isn’t happening.
Following the mayor’s 90-minute address regarding the Housing Opportunities Made Easy program — H.O.M.E. for those of you who like a good acronym — on Monday, the budget hearings before the Committee of the Whole began in earnest on Tuesday.
While the hearings discussed various parts of the mayor’s plan, including the $800 million bond issue that’s needed for the H.O.M.E. program to work, the bulk of the discussion centered on taxes.
The budget includes cuts to the city’s wage and Business, Income and Receipts Tax — or B.I.R.T. — taxes. While the city has been slowly reducing the wage tax for the last few years, the B.I.R.T. cuts have been discussed at times, but were put into writing as part of the Tax Reform Commission’s recently released report.
Over the next five years, the wage tax would be reduced to 3.7% for residents and 3.39% for non-residents. The B.I.R.T. reductions would start with this budget and would also be incremental, but they wouldn’t start in earnest until the city’s pension, which is now 60% funded, was fully funded.
Also, the current B.I.R.T. allows for the first $100,000 of profit for businesses to be exempted from the tax. That goes away under this budget because of a lawsuit challenging it.
In last week’s Hanging In The Hall, I talked about a press conference that the Tax Advisory Board, which is connected to the Tax Reform Commission, held regarding these tax cuts, which folks are arguing are needed to create jobs. The Advisory Board, as last week’s column would indicate, disagrees with that.
And so do Councilmembers Kendra Brooks and Nicolas O’Rourke.
During Thursday’s Council meeting, Brooks and O’Rourke introduced what they’re calling the People’s Tax Plan. Under this plan, the B.I.R.T. exemption that is being phased out under Mayor Parker’s plan would instead be increased to $200,000, more people would be able to avail themselves of the wage tax rebate plan I mentioned in last week’s column, and there would be a 0.4% “wealth tax” on stocks and bonds, the first $100,000 of which would be exempted.
Surprisingly, the plan doesn’t call for an end to the wage tax or B.I.R.T. cuts. In fact, the plan calls on the City to defend the B.I.R.T exemption in court instead of just capitulating to the folks who filed the complaint.
(Anticipatory obedience seems to be the order of the day in 2025. It’s not a good look.)
While the bills have been referred to committee, whether or not they’ll make it out of committee is another issue. My sources in City Hall are telling me that the wealth tax is probably a non-starter, but that extending the wage tax rebate might get some traction.
But in any case, what I’ve learned from the first week of hearings on the FY 2026 budget is that I’d love to have a job where I can ask people to take out loans for millions of dollars on my behalf and get someone else to pay them off for me.
I don’t know if I could do it with a straight face, but I’d sure like to try…
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