Philly Council passes $4.3 billion budget, avoiding real estate tax hike

The Council president would not say whether his colleagues would vote for a tax increase in 2019, an election year.

Philadelphia's City Hall Tower (Emma Lee/WHYY)

Philadelphia's City Hall Tower (Emma Lee/WHYY)

By a 13-4 vote, City Council Thursday approved a $4.3 billion spending plan for Philadelphia.

The new budget plan doesn’t increase real estate taxes, but it does try to put the city and school district in a better position, said Council President Darrell Clarke.

“We believe that, in terms of stability, this lends itself … to stability when it comes to labor peace,” he said. “We have stability in respect to multi-year funding for schools.”

Clarke would not say whether his colleagues would vote for a tax increase in 2019, an election year. But the budget vote would occur after the primary, which would put most Democrats in a safe position for re-election.

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Clarke did say a construction tax is necessary to support affordable housing in the city, and he hopes Mayor Jim Kenney will sign the legislation Council passed in a 9-8 vote Thursday afternoon.

“When we did the analysis on the revenues generated from the tax, the numbers we got from the city, the revenues were much higher,” Clarke said.

The Kenney administration, however, has disagreed.

“The Finance Department’s analysis finds that, over five years, the proposed tax on new construction activity would have a net loss to the city … of more than $30 million,” said Kenney spokesman Mike Dunn.

“Specifically, we conservatively project that, even in this strong real estate market, the tax will result in more lost revenue to the city’s general fund because of lost market rate construction than it will generate both to the Housing Trust Fund directly, and to the general fund through related economic activity.”

Kenney said later he will discuss the tax with Council members over the summer.

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