Mayor Parker is staring down a big tax fight, a ‘housing D-Day,’ and potential federal cuts. Here are 6 takeaways from her budget address.

Mayor Cherelle L. Parker said she’s confident her plan for Philadelphia that she outlined during her annual budget proposal Thursday will usher in a new era of improved safety, quality of life, and business growth.

But the mayor is staring down months of uncertainty. There are potential federal funding cuts. There’s a looming fight over taxes. And she is set to unveil a plan in 10 days that she says will remake the city’s housing landscape.

Here are six takeaways from the mayor’s 90-minute speech.

Parker’s budget proposal represented her opening salvo in the coming fight over how the city taxes businesses, and there are likely to be aggressive negotiations before the budget is agreed to by City Council.

And that could get complicated. The faction closely aligned with business interests is likely to push for deeper cuts than what Parker proposed, while progressives are almost certain to question tax cuts for businesses that could have any impact on spending and city services.

Parker proposed major changes to the business income and receipts tax, or BIRT. She wants to cut the tax rate on businesses’ profits in half and eliminate its tax on gross receipts by 2039. The cuts would be incremental over 13 years and cost the city $9.2 million next year.

Her plan is not quite as aggressive as the one recently proposed by the Philadelphia Tax Reform Commission, which was convened by Council and called for the complete elimination of the BIRT over a decade.

» READ MORE: No tax on businesses? The Philadelphia Tax Reform Commission is calling for a major change

Some pro-business Council members praised Parker’s proposal, but said they may push for deeper cuts. Progressives, meanwhile, including Councilmember Rue Landau, a Democrat who represents the city at-large, said they have questions.

“Namely,” she said, “how is the city going to balance proposed revenue cuts at this time as we face down pending federal funding cuts that will lead to a loss of services?”

City Council President Kenyatta Johnson said he’s confident the dueling factions will come to an agreement, and that his goal is for Council to pass a budget unanimously by the June deadline.

Parker has been careful to avoid directly criticizing President Donald Trump since he took office in January, even amid pressure from activists who have demanded she assert that the city will protect marginalized groups including immigrants and LGBTQ people.

That continued Thursday. However, during her speech, Parker alluded to the second Trump administration in a major forum for the first time and said the “uncertainty” coming out of Washington “can breed fear.”

“I want the people of Philadelphia and our city employees to hear me: Your city is here to keep you safe and to safeguard your basic rights,” Parker said. “Our diversity is what makes us one Philly, a united city, and we will never compromise.”

Parker was likely acknowledging the Trump administration’s sweeping changes, including controversial policies on immigration and diversity, equity, and inclusion, as well as funding cuts and contract cancellations throughout the federal government.

Rob Dubow, the city’s finance director, told reporters Wednesday that the city lost a federal grant related to sustainability, but did not provide further information. The city intends to set aside $95 million into a new reserve that would offset potential additional cuts, Dubow said.

Addressing crime and public safety was Parker’s No. 1 priority in her first year, and she kicked off her speech by ticking off her administration’s crime-fighting efforts, including an increased number of police officers walking foot beats and millions of dollars in funding for grassroots community organizations.

Rates of gun violence were at near-record levels in the years leading up to when she took office, but dropped precipitously last year in line with broader national trends.

» READ MORE: Philly saw a historic drop in murders in 2024. What changed?

Parker said she isn’t satisfied heading into her second year.

“No one is shouting ‘mission accomplished’ around here,” she said. “Every homicide, every incident of violence, is a loss for Philadelphia and a stain on our city’s soul … we have much more work to do.”

To that end, Parker announced several new investments in crime fighting, most notably announcing that the city has selected a location for a new forensics lab where police can process and test evidence. Officials have long said that replacing the city’s current crime lab, which is undersized and outdated, will allow for law enforcement to solve crimes faster and build stronger cases.

The new lab, to be located at 4101 Market St., will “mark a giant step forward in forensics technology and crime-solving ability for our police department,” she said.

» READ MORE: New Philly police forensics lab will be in University City, Parker administration says

Parker also announced continued funding to outfit police officers with body-worn cameras and dash cameras, which have been funded in city budgets for the last eight years. However, outfitting every officer has been a work in progress — Parker said every cop will have a body camera by the end of the year.

The mayor also said she has “often been criticized for being too pro-police,” and said she disagrees.

“Philadelphians want to be safe and feel safe, and they deserve that basic human right,” she said, “and I am unapologetic about supporting our police department.”

Parker proposed a major new investment in one of her administration’s key goals: ending the open-air drug market in Kensington. She wants Council to approve nearly $300 million in funding over the next five years to continue construction and operations at the Riverview Wellness Village, her administration’s new city-run rehabilitation housing for people recovering from drug addiction.

The facility, adjacent to the city’s jail complex, opened in January after the mayor secured $100 million in funding last year to kick-start construction. Parker has framed the expansion of treatment options as a key way to address the sprawling homelessness and open drug use in Kensington.

» READ MORE: How Philly’s new recovery house will serve hundreds of people with substance use disorder

”There were some who said it couldn’t be done. That it was too much, too fast. ‘Where would the facility be located? Where was the plan?’” Parker said. “We did not have time to wait. We are in the middle of a humanitarian crisis, and we acted with urgency, focus, and a plan.”

As of late February, fewer than 50 people were being housed at the 336-bed facility as the administration continues to build capacity, according to city officials who testified recently before members of City Council.

The mayor is also proposing expanding diversion programs for people arrested for low-level offenses, including the administration’s new “neighborhood wellness court” based in Kensington.

» READ MORE: City leaders tout progress in Kensington, but some residents remain skeptical

Currently, the court operates just one day a week. Parker proposed $2.7 million in spending that would allow it to be open five days a week.

Even as Parker and her administration say the Kensington plan has yielded safety improvements in the neighborhood, some residents are skeptical and say drug traffic in the area remains persistent. In addition, advocates have criticized the wellness court, saying people in addiction are being asked to make critical decisions while intoxicated or in the throes of withdrawal.

Parker said her administration is proposing borrowing $800 million to pump into housing policy “as quickly as possible,” an initiative she says will be core to her second year in office.

But despite touting her goal of building or rehabbing 30,000 homes since she took office in January, details remain scant. She promised she’ll reveal more in 10 days during a special session of City Council on March 24, which she called “the D-Day for housing.”

» READ MORE: Mayor Parker $800M housing plan to start moving “as quickly as possible”

City Councilmember Jamie Gauthier, a progressive Democrat and one of Council’s most vocal affordable housing proponents, praised the plan in a statement Thursday, saying it’s “our opportunity to correct course — to make sure those who need our help the most finally get their fair share.”

The mayor also highlighted that she is seeking to eliminate the construction impact tax, which was created in 2019 to fund community development programs. Administration officials say the tax is only bringing in $3.7 million a year, and that it dampens development.

Parker said that in the wake of the “shock and awe” of the Philadelphia 76ers’ surprise decision to stay in South Philadelphia, she will be making the revitalization of East Market Street a priority.

The long-debated and highly controversial effort to build a basketball arena on East Market Street was cited by city officials as key to renewing the fortunes of the beleaguered shopping district.

During her speech, Parker said that “within the next month” she would establish a “Market East Revitalization Task Force” helmed by Jerry Sweeney, the CEO of Brandywine Realty Trust, the largest office building owner in Philadelphia.

» READ MORE: Mayor Cherelle Parker called the Sixers’ decision to stay in South Philly ‘a curveball.’ Some say she just whiffed.

Parker said the city is in the midst of a study to “carefully determine our course going forward.” She also said that representatives from Chinatown, a neighborhood that borders East Market and the former proposed arena site, would be included on the task force, along with the 76ers and Comcast, which have made unspecified commitments to the corridor.

She said in an interview later Thursday that she’s committed to “bringing life back to Philadelphia’s first commercial corridor.”

“When people say, ‘what are you thinking about for East Market Street?’ Let me tell you what I’m not thinking about,” she said. “It continuing as it is, being OK with the status quo … I’m hopeful. I feel good. My spirit feels good about the potential for our city.”