Mayor Cherelle Parker proposed new taxes on rideshare trips and retail deliveries as part of her budget proposal Thursday.
The $6.97 billion spending plan also includes funding for additional homeless shelter beds and new pothole repair teams, but it lacks the sweeping projects that defined Parker’s first two city budget proposals. Those budgets funded the Riverview Wellness Village, a Holmesburg housing complex for people recovering from addiction, and Parker’s H.O.M.E initiative, which aims to improve housing in the city.
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Parker’s new budget proposal seeks to raise money for the School District of Philadelphia by taxing Uber and Lyft trips, and boost revenue for street repairs by taxing deliveries from Amazon and other retailers. Both taxes would take effect July 1, 2027.
Imposing a 20-cent tax on every rideshare trip that begins within the city limits will raise $9.6 million annually for the school district, the Parker administration said.
The delivery tax would charge retailers 25 cents for every order made within the city. Orders for food, baby products, drugs, medical devices and wholesale items would be exempt. Parker expects the tax to generate $15 million annually. Of that, $7.1 million would be used to create new street maintenance crews dedicated to repairing potholes. The remaining revenue would cover general street maintenance.
The city is not recommending any changes to the wage tax, which is 3.74% for residents and 3.43 for non-residents.
To add 1,000 shelter beds and boost wellness services, Parker is proposing a 2% increase to the city’s hotel tax to take effect in August 2026. Currently, hotel guests pay a 15.5% tax rate. The city taxes them 8.5%, and the state taxes them another 7%. The proposed tax hike would generate $20 million annually for the city, but it must be approved by City Council and the state legislature.
Among other major budgetary items, Parker proposed spending $400 million over five years to pave roads and install ramps for people with disabilities. Another $57 million would be spent on infrastructure projects within the Streets Department and the Office of Transportation and Infrastructure Systems.
Philadelphia will receive $211 million from opioid settlements over the next five years. Parker’s budget allocates that money to the Riverview Wellness Village, Philly Home at Girard, Kensington Wellness Support Center, Wellness Court program and housing support. That money is in addition to $110 million earmarked for adding 1,000 shelter beds over the next five years.
Parker also proposed investing $35 million to maintain two SEPTA fare programs. Of that, $10 million would fund the Key Advantage program, which offers discounted passes to city employees, and $25 million would fund the Zero Fare program, which gives free SEPTA passes to low-income residents.
Additional tax changes
• Parker’s budget calls for increasing Zoning Board of Adjustment fees for filing, air management and asbestos, and attorney fees for property taxes. Commercial trash fees and the accelerated plan review fee for Licensing and Inspection also would go up.
• The Sales and Use Tax would require sellers located outside Philadelphia to pay the city’s sales tax. Currently, sellers outside of the city only have to collect the 6% state sales tax. Beginning July 1, they also would have to collect the city’s 2% sales tax, too. The proposal, which requires approval from the state, would generate $1.5 million for the city and its pension fund.
• The Use and Occupancy Tax for cell towers would be determined by the value of the tower rather than its square footage. The change would create $2.4 million in revenue annually. That money would benefit the school district.
Other key funding initiatives
• Libraries: Over the next five years, $33 million will go toward repairing HVAC systems at the city’s libraries. Air conditioning and heating issues have caused a number of closures throughout the years, and the Parker administration conducted a study last year to asses the issue and develop a plan for repairs.
• Education: $6.5 million will be spent to add 100 Pre-Kindergarten seats, bringing the total number to 5,350. Two charter schools will be added to the year-round schooling program, and another $1.6 million will go to the Community College of Philadelphia’s operating budget.
• Vision Zero: After defunding the program in her first budget and restoring it in her second, Parker maintained the $30 million over five years budget for the pedestrian and traffic safety program.
• Policing: Quality-of-Life Assurance officers would be deployed in every city district to address nuisance properties and establishments that “disrupt the peace of our residential blocks,” Parker said.
• Greening: $6 million would be set aside for electric vehicle charging stations for city fleets, and $4 million would support the Guaranteed Energy Savings Act to boost energy efficiency at city-owned buildings. Funding also would be set aside for illegal dumping enforcement operations and maintaining highway beautification.
• Social services: The budget would allocated $13.9 million for existing economic mobility programs, like financial counseling and low-cast banking services. Another $500,000 would be set aside annually to fund a new Economic Mobility Cabinet that works with the City College for Municiapl employment and the Office of Community Empowerment and Opportunity.