Philadelphia’s fiscal health and tax policy affect the city’s ability to deliver critical municipal services while also retaining and attracting residents and businesses.
Pew’s work on these issues includes research on Philadelphia’s property tax collections, the state of the city’s underfunded pension system, Philadelphia’s record on preparing for revenue volatility, and whether tax incentives are producing the intended results.
In June 2022, The Pew Charitable Trusts assessed the status of Philadelphia’s economic recovery two years into the pandemic, identifying five key questions likely to determine the city’s future performance. Those questions concerned jobs, the level of remote work, the size of the workforce, the strength of the housing market, and the implications for an equitable recovery.
Debates about Philadelphia’s future often center on the city’s tax system and two questions: Are the burdens it places on residents equitable, and are those on businesses counterproductive? To help inform the residential piece, The Pew Charitable Trusts examined the current system by calculating the percentage of total income Philadelphians pay in local taxes to the city and school district, depending on whether they own or rent their homes.
This is a pivotal moment for Philadelphia. More than two years into the COVID-19 pandemic, the decisions local leaders make now—about attracting and retaining residents, bolstering the workforce, and adjusting tax structures to reflect new realities like remote work—will greatly affect Philadelphia’s ability to thrive and become a more equitable city.
Through its Philadelphia’s Fiscal Future series, The Pew Charitable Trusts, in collaboration with the William Penn Foundation, is exploring the various possibilities that lie ahead for the city’s finances and economy.
For many years, Philadelphia has awarded businesses hundreds of millions of dollars in tax incentives to encourage them to create jobs, move into distressed neighborhoods, and otherwise enhance the local economy. But the city never had a formal system for regularly evaluating and adjusting the programs.
Philadelphia has taken steps to put its underfunded public employee pension system on what will be a long road to recovery. Will those efforts work, and can the city stick to the plan?
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