Philly Council Approves $6.8B Budget, Advancing Mayor's $2B HOME Initiative

Negotiations came down to the eleventh hour, but the Philadelphia City Council ultimately approved the $800M bond issuance Mayor Cherelle Parker requested for her signature HOME Initiative.

The wide-ranging housing plan got a tentative green light Thursday night alongside a $6.8B fiscal year 2026 budget with significant wage and business tax cuts and $716M in operating support for the financially troubled Southeastern Pennsylvania Transportation Authority.

“At a time of real uncertainty in our country, this budget makes substantial, bold investments in the programs we need most,” Parker said in a statement.

The resolution followed two days of nearly round-the-clock negotiations, many of them centered on the details of Parker’s plan to build or preserve 30,000 housing units before the end of her first term.

The bill authorizes the city to borrow $800M in bonds under a service agreement with the Philadelphia Redevelopment Authority. The remainder of the $2B would come from other public funding and the disposition of $1B in city-owned land.

“I just want to put on the record that I’m adamantly against $800M,” Council member Isaiah Thomas said during a Wednesday Finance Committee meeting, The Philadelphia Inquirer reported. “That is not the direction that we should be going in right now.”

The makeup of an oversight board for HOME Initiative funds were at the center of Thursday’s negotiations.

The council initially wanted the group to have two legislative appointees and one from the mayor’s office. The final plan includes two mayoral appointees and two council appointees.

Parker also scored a big win by getting the council to fast-track the entitlement process for 1,000 city-owned lots.

Lawmakers are expected to return for a final vote June 12. Had they waited longer for this tentative approval, it would have been impossible to pass it before they went on summer break.

Not every council member is happy with the budget plan.

“This budget falls far short of what the people of Philadelphia deserve,” Council members Kendra Brooks and Nicolas O’Rourke said in a joint statement.

“Despite participation from thousands of community members leading into negotiations, the final budget was decided behind closed doors without meaningful input from the whole of council.”

Opponents decried new wage and business tax cuts as a boon for big business and slammed the lack of new funding for the Department of Licensing and Inspections. The budget plan calls for cutting the gross receipts rate from 0.1415% to 0.141% next year and eventually phasing it out as well as lowering the net income tax from 5.81% to 5.71% next year on the way to a 2.8% rate by 2039.

The wage tax was cut slightly as the mayor seeks to lower it to 3.7% for Philly residents and 3.4% for commuters by 2029.

Parker’s plan was not the only housing legislation under scrutiny Thursday.

Council Member Rue Landau introduced a bill that would allow some Philadelphia tenants to pay security deposits in monthly installments instead of all at once.

She pulled the bill after Council Member Katherine Gilmore Richardson and several other lawmakers objected to the measure being applied to small landlords, the Inquirer reported.

“The cutoff could be if they had one or two properties they wouldn’t need to deal with the auspices of this legislation,” Gilmore Richardson said.

She expects the bill to be reintroduced and passed with the amendment.