PHILADELPHIA — The Pennsylvania Intergovernmental Cooperation Authority (PICA) Board has unanimously approved the City of Philadelphia’s Fiscal Year 2027-2031 Five-Year Financial and Strategic Plan, affirming that the City’s financial roadmap is balanced and based on reasonable revenue and spending projections.
The approval marks a significant milestone for Mayor Cherelle L. Parker’s administration, allowing the City to move forward with a series of strategic investments aimed at improving affordability, expanding economic opportunities, and strengthening neighborhoods across Philadelphia.
According to PICA staff, the five-year plan meets all statutory requirements, maintaining balanced budgets throughout the planning period while relying on sound fiscal assumptions. The plan outlines investments in public safety, housing affordability, workforce development, education, cleaning and greening initiatives, and programs designed to improve residents’ quality of life.
PICA staff also recognized several positive financial management measures included in the plan. These include efforts to improve the health of the City’s pension fund, planned deposits into the Budget Stabilization Reserve Fund during Fiscal Years 2027 and 2028 that would increase the projected balance to nearly $355 million, and a strategy to reduce projected operating deficits and achieve operating surpluses by the end of the planning period.
Additional strengths cited by PICA include the City’s stable credit ratings and the preservation of a Labor Reserve to responsibly prepare for future collective bargaining agreements.
While endorsing the plan, PICA staff recommended that Philadelphia continue building its fiscal reserves. The review noted that the City’s unrestricted reserves remain below the Government Finance Officers Association’s recommended benchmark of 17 percent of annual revenues throughout the five-year period.
Mayor Parker welcomed the board’s decision, emphasizing the importance of maintaining strong fiscal management while investing in the city’s priorities.
The PICA Board also elected Alan Kessler as its new chair, succeeding Kevin Vaughan, who held the position for a decade and will continue serving as a board member.
Vaughan’s tenure included overseeing Philadelphia through the fiscal challenges brought on by the COVID-19 pandemic and a period during which the City improved its financial standing, achieved its highest credit ratings in decades, and made continued progress toward fully funding its pension system.
Mayor Parker praised both Kessler and Vaughan for their leadership and commitment to the city.
PICA serves as Philadelphia’s independent state fiscal oversight authority. Under state law, the City must submit a Five-Year Financial Plan annually for review and approval. Failure to secure approval could result in the Commonwealth withholding hundreds of millions of dollars in funding until a revised balanced plan is approved.
With PICA’s unanimous endorsement, Philadelphia is positioned to advance its fiscal and strategic priorities while continuing efforts to strengthen its long-term financial stability.