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Transmitting a message advising you that I am hereby returning unsigned Bill Number 240061, introduced by Councilmember Jamie Gauthier, and passed by City Council on June 06, 2024. Bill Number 240061 would provide for submission to the qualified electors of the City of Philadelphia of an amendment to the Philadelphia Home Rule Charter. This amendment would increase the minimum amount that must be appropriated for spending on Housing Trust Fund (HTF) purposes in the City’s operating budget each year. Specifically, it would require that an amount equal to total receipts by the City in the preceding calendar year of payments made in lieu of providing affordable housing for any purpose under the Zoning Code be appropriated to the HTF. This amount would be in addition to the current requirement for a mandatory annual appropriation for the HTF in the amount of at least one-half of one percent (0.5%) of the City’s total General Fund appropriations, as required by another Charter change enacted in 2021.
As the Administration testified at the hearing on this bill, the administration opposes this and any similar Charter amendments that attempt to bind the hands of future Mayors and City Councils by requiring specific budgetary appropriations as opposed to proceeding through the normal budget process. We agree that housing funding is essential, but so are other portions of the budget such as education funding and funding for violence prevention. We project that this Charter change would cost the City’s General Fund up to $5 million annually and up to $25 million over the course of the Five Year Plan, an amount that would be added to our already high level of fixed costs, further limiting our budgetary flexibility.
In FY24, more than 57% of the General Fund is dedicated to fixed or inflexible costs such as pension payments and debt service, leaving less than half for the Mayor and the City Council to allocate each year to respond to the evolving needs of the City and its residents. This proposed change would take away even more flexibility from the budget process, hurting our shared ability and responsibility to remain responsive to community needs over time.
It is crucial that the Mayor and City Council maintain flexibility to respond to unanticipated changes and provide the best possible mix of services to the residents of Philadelphia. For these reasons, I am returning Bill Number 240061 unsigned.
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