Now more than a full year in office, Mayor Cherelle Parker proposed her second budget, for fiscal year 2026, on March 13, 2025. The spending priorities outlined in the $6.8 billion budget for the City’s General Fund, about $375 million more than last year’s budget, will help shape daily life for Philadelphians over the next year — and longer.
The General Fund, the City’s main operating source of revenue, is primarily funded through taxes, and it determines what services Philadelphians receive in return for those taxes. Do you feel safe in your neighborhood? Can you find affordable housing? Is your trash picked up on time? When is your local library open? Is the park down the street clean? The programs that do — or do not — get funded in the City’s budget determine the answers to these questions.
“The City budget is one of the most powerful tools we have to understand our local government’s priorities and to have a say in shaping them,” says Lauren Cristella, President and CEO of the Committee of Seventy. “When residents understand how their tax dollars are spent, they’re better equipped to advocate for their communities and hold leaders accountable. Making the budget process accessible is essential to building trust, transparency, and a more engaged Philadelphia.”
The General Fund is the main way that the City pays for day-to-day operations, and it supports core resident-facing municipal functions like police, firefighters, trash collection, parks, and libraries. It also includes spending on new programs that are Mayoral priorities, like Mayor Parker’s Clean and Green Initiatives and H.O.M.E Initiative. These new spending areas must be balanced against fixed costs, like employee benefits and debt payments, that can’t be easily changed from year to year and often take up a sizable portion of the budget.
City Council is in the process of holding budget hearings with each department head about the budget requests — and hearing from citizens about what they want to see funded (or not). Council must approve a budget in time for the start of fiscal year (FY) 2026 on July 1, 2026.
To better understand the City’s latest budget, we divided funding totals by Philadelphia’s whole population and looked at how the per-person totals for the FY 2026 budget compared to those from last fiscal year (FY 2025). See below the chart for some of the main highlights.
General Fund Budget
Employee benefit costs are the single largest category of spending in the budget, despite roughly 20% of the City's full-time positions being unfilled.
The Police Department has the largest budget of any City department, totaling $872M in the proposed budget.
These include the annual payment to the Municipal Pension Fund, which funds pension benefits for active and retired City employees, as well as payments towards paying down debt from past pension-related bond borrowings.
The City is required to make these debt service payments each year.
This includes the budgets for the First Judicial District (courts), the Defender Association, the District Attorney's Office, the Sheriff's Office, and the Register of Wills.
These departments often leverage their budgets to receive outside funding from matching external state and federal grants.
In FY26, the Parker Administration proposed a $46M increase to the Commerce Department's spending on economic stimulus, more than doubling the spending from last fiscal year.
DHS often leverages its budget to receive outside funding from matching external state and federal grants.
The City's Finance Department has budgeted an extra $22M for a series of special events that the city will host in 2026: America's 250th birthday celebration, the soccer World Cup, and baseball's All-Star Game.
Spending on rental leases is expected to increase by about 45% in FY26, with spending on utilities expected to increase by about 30%.
The FY26 budget establishes the Office of Public Safety as an independent department, transferring its funding from existing programs in the Managing Director's Office.
Here are some of the most substantial takeaways:
- Employee benefits: Spending on benefits for City employees, which must be paid each year, are the single largest category of spending in the budget, despite roughly 20 percent of the City’s full-time positions being unfilled.
- Fixed costs: Increases to the City’s fixed costs, which the City is obligated to pay, make up a sizable portion of the overall increase to the budget in FY26. About $92 of the overall $240 per-person increase in the budget, or about 40 percent, is due to spending increases for employee benefits, debt service, and utilities and rent payments.
- Paying off City debt: Debt payments increased 14 percent in the proposed budget, due in part to the City’s new $400 million borrowing as part of Mayor Parker’s housing initiative.
- Arts and culture cuts: The proposed budget reduces the City’s contributions to various arts and cultural institutions across the city by about $4 per person ($5.7 million in total). The proposal also reduces funding for the Art Museum and the Mural Arts program by $500,000 each. Overall, arts and culture funding was cut by about one-third compared to last year’s budget.
- Low-income SEPTA passes: The budget Parker proposed in March ends funding for the Zero Fare program that provides free SEPTA passes to low-income Philadelphians, resulting in a $20 per person ($31 million in total) decrease to the budget for the Managing Director’s Office. On April 9, Parker reversed course and announced she would continue the program. The final, adopted budget is expected to include funding to extend the program but details are still unclear.
- Union contracts: The labor contracts for each of the City’s major unions are set to expire on June 30, 2025. The proposed budget reserves about $65 per person ($102 million in total) to cover increased costs from new contract agreements, such as raises and bonuses.
- Economic stimulus: The City proposed an increase of about $30 per person ($46 million) for spending on economic stimulus by the Commerce Department.
Sources: City of Philadelphia Proposed FY 2026 Budget in Brief and Adopted FY 2025 Budget in Brief.
Figures represent proposed funding in fiscal year 2026 for the City of Philadelphia’s General Fund budget, adjusted for population using the latest available data. Per-person spending totals are compared to the adopted General Fund budget for fiscal year 2025. Funding for the Early Childhood Education program was separated from the budget for the Department of Human Services and categorized separately.
Nick Hand was director of the City Controller’s Finance, Policy and Data unit during Rebecca Rhynhart’s tenure. 
MORE ON THE CITY OF PHILADELPHIA BUDGET
Mayor Parker giving her FY2026 budget address before Philadelphia City Council on March 13, 2025. Photo by Chris Mansfield and Ta'Liyah Thomas.