Summary
PICA’s Fact Sheet on the City of Philadelphia’s Proposed Five-Year Financial Plan (FY25-29) outlines the City’s fiscal outlook from FY25 through FY29, detailing revenue projections, expenditure growth, and financial stability measures. The plan anticipates a 6% revenue increase over the five-year period, reaching nearly $6.6 billion in FY29, while expenditures are projected to grow by 5%. Despite this, operating deficits are expected in all years, and the General Fund balance is set to decline by $472 million, falling short of the City’s goal of maintaining reserves at 6-8% of revenues in four out of five years. The City also plans to contribute $158 million to the Budget Stabilization Reserve and commit over $10 billion to capital projects, including $1.4 billion in new General Obligation (GO) borrowing. The proposed plan highlights key financial challenges, including sustained budget deficits and declining fund balances, which could impact fiscal flexibility. While wage and benefit costs will continue to be the largest expenditure category, the City is preparing for new labor contracts by setting aside $48 million in FY25 and a total of $420 million over the five-year period. The City’s reserves, including the Budget Stabilization Reserve, will drop from $652 million in FY25 to $280 million in FY29, making it difficult to weather economic uncertainties. Additionally, the plan outlines a $10.3 billion capital program over six years, funded through a mix of new borrowing and other sources, supporting infrastructure improvements like street paving, facility expansions, and museum relocations.