Summary
PICA’s Fact Sheet on the City of Philadelphia’s FY24 AFR presents a snapshot of the City of Philadelphia’s financial position, showing actual revenue collections, expenditures, and fund balances for the fiscal year. The General Fund balance of $943 million is significantly higher than previous estimates, driven by a $400 million increase from a higher starting fund balance and a $300 million increase due to lower-than-expected spending, particularly on salaries and benefits. While overall revenues were higher than projected, tax collections fell short of expectations, with notable declines in the Realty Transfer Tax, Real Estate Tax, and Sales Tax. However, these shortfalls were offset by stronger-than-expected collections in the Wage and Business Income and Receipts Taxes, as well as higher interest earnings. Despite these positive results, the report highlights concerns about ongoing structural budget challenges. Spending growth from FY23 to FY24 was ten times the rate of revenue growth, driven in part by front-loaded one-time costs for new administration priorities. Additionally, lower-than-expected personnel costs reflect continued difficulties in hiring and retaining staff, particularly in public safety departments. Moving forward, PICA will closely monitor revenue trends and personnel expenditures, especially as the City negotiates new labor contracts and prepares future financial plans.