Article by Stewart Weintraub on “Philadelphia's Pandemic Budget: Drawing From Reserves and Tax Hikes”
In an article published on August 5, 2020 in The Legal Intelligencer, Stewart M. Weintraub discusses that due to the COVID-19 pandemic, the city of Philadelphia encountered a double-barreled budget attack. To combat the pandemic, the city’s costs sky-rocketed and its tax collections dropped leaving the budget out of balance by approximately $650 million.
“The tax component of the city’s budget balancing effort led to the passage of three bills passed by city council June 25, and signed by the mayor June 26,” explains Weintraub.
Weintraub further explained that, “The city also imposes its net profits tax (NPT) upon owners of unincorporated businesses, proprietorships, partnerships and limited liability companies.” Additionally, the city made two other tax changes intended to balance its fiscal year ending June 30, 2021, operating budget.
“Only time will tell when the current health crisis abates and how long its impact will be felt by the city,” discusses Weintraub. “Hopefully it will not, but, if the financial impact of the COVID-19 pandemic extends beyond fiscal 2021, similar problems will confront the city next year.”
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