Civic News
COVID-19 / Economics / Funding / Municipal government

Philly’s revised budget proposes eliminating the Office of Workforce Development

The new 2020-2021 budget, which must still be reviewed by City Council, attempts to close the funding hole left by the City's coronavirus response. It's not clear yet which of the office's programs will remain.

The Mill Auditorium. (Courtesy photo)
Update: Comment from Philadelphia Works CEO H. Patrick Clancy has been added. (5/1/20, 5:36 p.m.)
For the last two months, the City of Philadelphia has grappled with the added expenses of fighting the coronavirus pandemic.

Between operating testing sites, providing extra assistance to families in need, upping public health measures and creating extra funding for small businesses, the costs associated with fighting the virus have racked up.

“The impact on the City’s finances has been immediate; with reduced revenues, new costs, and increased costs for existing expenditures,” the City said in its newly revised 2020-2021 budget.

And those costs have added up to about a nearly $650 million hole in the new budget, Mayor Jim Kenney said this week. This hole necessitates a review of the yearly budget that was proposed back in March, as well as the five-year plan for the city, according to the mayor.

“We hope that by focusing on core services and maintaining fiscal stability, we will be able to restart as quickly and safely as possible, setting Philadelphia on a path of revitalization and reinvention,” Kenney said in the newly proposed budget.

But that does mean cuts across some departments, as well as a hiring freeze for City employees, laying off seasonal workers as of June 1 and pay cuts for those making above $35,000. The City does not plan to make personnel cuts to public safety or health departments, but notably, for Philadelphia’s biz economy, the plan includes cuts to the Office of Workforce Development.

This reduction is possible because of the federal relief available to small businesses, the proposed budget reads.

“While the need to support Philadelphia businesses through this recession and encourage an inclusive recovery is obvious, the availability of federal relief dollars enables a reduction in funding for the Commerce Department,” which oversees the office, it says. “There will be reduced support for some partner organizations, reduced funds for international business attraction and storefront improvement, and planned office renovations and new staff will not occur.”

Under these budget cuts, the Office of Workforce Development will “cease to exist, with some resources and functions transferred to the Commerce Department as part of their new strategy for economic and workforce development.”

When reached for comment, Senior Deputy Communications Director Mike Dunn told that the parts of the office that would remain, which personnel would stay and how much money would be saved in the process “have yet to be determined.”

Those details will be “worked out over the course of the next two months, most likely by end of June,” he said, as the new budget takes effect July 1.

Most recently, the Office of Workforce development has worked on an initiative called the Greater Philadelphia Tech Partnership, an effort to build a more equitable pipeline for Philly’s tech ecosystem. The partnership convenes key players from the technology, education, government, workforce and nonprofit sectors to promote growth in the tech sector and strengthen Philadelphia’s overall economic outlook.

As of mid-April, the companies and leaders involved in the project were continuing communication and programming. An inquiry to the leader of the partnership, the Office of Workforce Development’s manager of talent development, Jennifer Hinds, has not yet been returned.

The Office of Workforce Development was also leading a workforce strategy called “Fueling Philadelphia’s Talent Engine,” which calls for more intentional coordination and collaboration across education, job training and other supportive services to drive economic growth with equity. The plan’s goals included deploying about $13 million in workforce education and training with 16,000 young people participating annually in high-quality work experiences, including summer jobs and year-round opportunities.

Last year, the office had met more than half its goal with the project: Nearly $11 million of its $13 million goal toward workforce education training had already been invested in programs across the city, including in Philadelphia Works and the Community College of Philadelphia.

H. Patrick Clancy, president and CEO of Philadelphia Works, a quasi-public nonprofit that connects job seekers to employment and training opportunities, offered this comment about the revised budget:

“Philadelphia Works and the City remain strategically aligned and committed to strengthening Philadelphia’s workforce system,” he said. “Economic and workforce initiatives go hand and hand. We look forward to our continued partnership with the Department of Commerce as Philadelphia begins to move towards the recovery phase of COVID-19.”

The revised budget may not be final for the next two months, as City Council must first approve it.

“This budget is the result of our determination to address both the pandemic and the economic downturn with bold decisions so that this government operates within its means — while also addressing other challenges, like gun violence, poverty, and the opioid epidemic,” Kenney said. “It transforms our priorities to meet the needs of Philadelphians, particularly our most vulnerable residents, under this new reality. I am confident that by focusing on core services and maintaining fiscal stability, we will rebound from the impact of COVID-19 as quickly and as safely as possible.”

This story will be updated as new information becomes available.

Companies: City of Philadelphia / Philadelphia Works
Series: Coronavirus

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