Philadelphia officials are considering a plan that would connect road repairs to the growing volume of package deliveries across the city. Mayor Cherelle Parker proposed the idea in March while presenting a $7 billion budget plan to the City Council, introducing a new set of road crews called “pothole squads” and a 25-cent fee on certain retail deliveries to help pay for them.
The mayor laid out the proposal during her annual budget address on March 12 in City Hall’s council chambers, where she spoke for more than two hours outlining priorities for the city’s 2027 fiscal year and a five-year financial plan.
“It is a roadmap to self-sufficiency. A path that makes it easier for every Philadelphian to move up and not just get by,” Parker said.
The spending plan allocates funding for public safety, homelessness services, economic mobility programs, and transportation, including a $7.1 million initiative to create dedicated pothole repair teams.
Each of the Streets Department’s six highway districts would receive one of the new repair teams. The crews would patrol streets looking for damage and repair potholes before complaints arrive through the city’s 311 service system. City officials estimate the squads could repair about 15,000 potholes each year.
The plan would add 24 employees and provide equipment and supplies as part of a $15 million increase in the Streets Department’s road-maintenance funding. Roughly $7 million of that increase would support staffing and equipment for the new teams.
“More crews, more equipment, and more action to keep our roads in good repair,” Parker said during the budget address.
Road damage has been widely reported across Philadelphia this year after repeated winter weather events. Residents have shared images of large potholes online, including one in Kensington that residents said “swallowed” a Water Department truck and another in Grays Ferry described as “crater-sized” after it damaged several cars.
City officials attribute the surge in road damage to winter weather conditions.
“We had a brutally cold winter and back-to-back winter weather events of snow and ice and rain and sleet,” said Kristin Del Rossi.
The freeze-thaw cycle places stress on pavement and contributes to road deterioration early in the year.
Philadelphia repaired more than 50,000 potholes in 2025, according to city budget documents. Parker said in her address that the city filled over 60,000 potholes last year. By early March 2026, crews had already repaired more than 21,000 potholes.
Service records also show differences in response times across neighborhoods. An analysis covering May 2024 through May 2025 found that potholes reported through the city’s 311 system took an average of 15 days to repair. City officials have said their goal is to complete repairs within three days of identifying road damage.
The same review found repairs in Center City averaged about nine days. In Olney, the average response time reached 36 days, while Frankford averaged 34 days. Residents filed nearly 6,000 pothole complaints through 311 during that period, and the city resolved about two-thirds of those reports. Some potholes drew dozens of service requests before crews repaired them.
City officials say potholes and road damage are among the issues most frequently raised by residents through the city’s Neighborhood Community Action Centers.
To support the new repair teams and other road maintenance work, Parker proposed a delivery tax that would charge retailers 25 cents each time a qualifying package arrives at a Philadelphia home or business. The fee would apply to companies delivering goods into the city, including retailers such as Amazon, Instacart, Walmart, GoPuff, and Pets.com, if their delivery volumes meet the city’s thresholds.
Certain items would not be subject to the tax. Deliveries of food, baby products, medications, medical supplies, and wholesale goods would be excluded. Retailers outside Philadelphia with relatively few deliveries to the city would also be exempt.
City officials say the tax would begin July 1, 2027, and could generate about $15 million each year.
“In other words, businesses that rely on our streets for deliveries will help to maintain them,” Parker said.
Philadelphia’s finance office said the approach connects road upkeep costs to delivery activity.
“The retail delivery tax was chosen because it ties the use of the funds — improvements to roads — to activities that have an impact on road conditions,” said Rob Dubow.
The proposal drew partly from delivery fee policies adopted in other states. Colorado created a statewide delivery fee in 2021 that began at 27 cents and later increased to 28 cents after inflation adjustments. The policy exempts businesses with less than $500,000 in annual sales. According to CSG Midwest, the fee initially produced about $76 million per year and supports transportation and clean transportation projects.
Minnesota introduced a 50-cent delivery fee in 2024. Businesses with less than $1 million in annual sales are exempt. Deliveries of food, drugs, baby products, and medical devices are also excluded. The fee was projected to produce $59 million annually, with most funds distributed to municipalities.
Attempts to repeal or modify the fees have been introduced in both states, but have not passed.
Delivery-fee proposals have been debated in several other locations across the United States. New York City and New York state lawmakers have tried several times to approve similar measures without success. Boston and the state of Massachusetts have also discussed such policies. Lawmakers in Connecticut, Vermont, Rhode Island, Indiana, and Maine have studied the idea. Virginia legislators recently reviewed multiple proposals but did not pass them, and Maryland lawmakers considered delivery taxes for three consecutive years before abandoning the effort. Legislators in Hawaii and Mississippi have also proposed delivery fees.
The Philadelphia proposal has drawn opposition from the Chamber of Progress, a Virginia-based technology policy group funded by companies including Amazon and Google.
“There is going to be a lot of opposition and a lot of meaningful conversation,” said Brianna January.
The group distributed briefing materials opposing the tax to the mayor’s administration, members of the City Council, and state legislators. Those materials cited a January 2025 poll commissioned by the organization that found 80% opposition to delivery fees among Pennsylvania residents. The percentage increased slightly when respondents were informed about criticism of such policies.
Later polling conducted in December reported 53% opposition in Colorado and 48% opposition in Minnesota.
The Chamber of Progress also commissioned an analysis that argued delivery fees affect small businesses, jobs, and wages while increasing costs for consumers and operating as a regressive tax on lower-income households. January said the group has partnered with disability advocates in Maryland and other states while opposing delivery taxes.
Philadelphia advocacy organizations are reviewing the proposal as well. Lauren Alden, a director at the advocacy group Liberty Resources, said the city has nearly a quarter-million residents with disabilities and many depend on delivery services because transportation barriers, inaccessible stores or health conditions make in-person shopping difficult.
“For these residents, delivery is often a necessity rather than a convenience,” Alden said.
The group encourages the city to consider safeguards so the tax does not make independent living more difficult for residents with disabilities.
Dubow said the administration does not expect the fee to change delivery volumes.
“At a quarter a delivery, we don’t believe it will have a meaningful impact on the number of deliveries,” he said.
The delivery tax proposal appears alongside two other tax proposals in Parker’s spending plan. One would place a fee on rideshare trips through services such as Uber and Lyft. The measure is expected to produce about $12 million each year for the School District of Philadelphia to support programs, including expanded pre-K access and additional high school initiatives.
Another proposal would raise the hotel tax by 2%, generating about $20 million annually for homelessness programs. The funding would support $22 million in services that include adding 1,000 shelter beds.
More than half of the proposed $7 billion budget — about 52% — would fund public safety programs, including police and fire services as well as grassroots organizations. The spending plan also includes more than $52 million for economic opportunity programs.
The mayor’s five-year financial plan allocates nearly $900 million to SEPTA, supporting the Zero Fare program that provides free transit passes for low-income residents. It also includes $10 million to pay transit fares for city employees through the Key Program.
City Council has started examining the proposal during budget hearings. During one hearing, Councilmember Jim Harrity raised questions about how the city would prevent businesses from charging the fee on deliveries that should be exempt.
“There needs to be some checks and balances there,” Harrity said.
Councilmember Jamie Gauthier asked how the city would handle deliveries that contain both taxable and exempt items, such as Instacart orders that include groceries.
Dubow said exempting those deliveries entirely could lead customers to add non-taxable items to avoid the fee.
Philadelphia City Council President Kenyatta Johnson said council members will examine the proposal during the budget review process. Public comment sessions began on March 25, and city law requires the budget to be approved by June 30.
