A coalition of eight education advocacy groups swarmed City Hall Thursday, urging City Council to follow a sales-tax extension plan already authorized by the state, which would send $120 million in increased sales-tax revenue to schools.
Under the existing plan, anything more than $120 million raised from extending a 1-percent city sales tax would go to the pension system. Current city projections show sales-tax revenue could be as much as $140 million this year.
Mayor Michael Nutter and Council President Darrell Clarke have been hoping to split the sales tax proceeds 50/50 between schools and pensions, and make up the difference by pushing the state to pass a tax that would raise the cost of cigarettes in Philadelphia by $2 per pack.
Donna Cooper, executive director of Public Citizens for Children and Youth, said it puts schools at risk to think that Harrisburg is both going to pass a cigarette tax and redo the sales-tax plan that it already authorized.
Go with what’s already approved, she urged, and then push for the cigarette tax as a way to fund pensions.
“The real question is why that isn’t on the table? Why [are we] going through the convoluted process of cutting the sales tax in half and hoping to get the cigarette tax?” she said.
Cigarette tax appears unlikely
The reason, she said, is because Council doesn’t have faith that cigarette tax will pass the GOP-controlled state Legislature.
Councilman James Kenney wholeheartedly agreed.
“You have to have some reality. We’re not getting the cigarette tax,” he said. “Grover Norquist has effectively shut down any type of effort that has the word ‘tax’ on it to tea party Republicans.”
But, unlike Cooper, Kenney fully supports the split. Using some sales-tax revenue to fund pensions, he said, will create more options to fund the schools through the city’s general fund.
“We need to defease the pension obligations, and, if we can do that in any consistent way, there will be more general fund money unfrozen, able to use for schools,” he said. “We have so many other complicated issues to deal with, and when you have people advocating for just one thing … they have to look at what we have to look at, which is the whole picture.”
(Education advocates argue that shoring up school funding will attract middle-class families to the city, which will drive up the city’s tax base – ultimately making the pension issue easier to deal with.)
City Councilman David Oh also supports the split, but didn’t rule out the possibility of voting to send the full $120 million to schools.
“If we’re coming up against the edge, and it’s going to be all the money for the schools or nothing at all,” said Oh, “I think its worthy of consideration that we get the money that we can.”
The split would deliver the school district at most $70 million.
In total, the district has asked the city for $195 million – $120 million in sales-tax revenue that it’s already assumed in its budget projections and an additional $75 million.
To Cooper, to admit that the cigarette tax is unrealistic, while also supporting the 50/50 sales-tax split, is to leave the school district’s funding situation in a state of total disarray.
“We have to ask our elected officials why they are willing to put the school district funding at risk,” said Cooper.
Councilman: ‘We’ll most likely find the money’
But even with the split, Kenney said he was confident that Council and the mayor would find alternate means to cover the district’s full ask.
“We always find the money somewhere. We haven’t not found it when it was asked for,” said Kenney. “We’ll most likely find the money.”
A few ideas have been proposed to generate the $75 million ask. These include Maria Quinones-Sanchez’s plan to send the district $53 million in additional funding by giving schools 60 percent of city property tax collections. Currently, schools get 55 percent.
Neither Nutter nor Clarke could be reached for comment.
The $195 million would get the district close to the $200 million it says it needs merely to return services and staff to this year’s dismal levels.
In total, the district is seeking $440 million before next school year. That sum would return many staffers and services that were cut this year and begin to implement aspects of Superintendent William Hite’s Action Plan 2.0.
So even if the city can come through on the $195 million the district seeks, where will the remaining $245 million come from?
“We should be joining forces and going to Harrisburg, working together for more state funding for Philadelphia schools,” said Sharon Ward, executive director of the Pennsylvania Budget and Policy Center.
Gov. Tom Corbett’s budget proposal would not increase the state’s basic education subsidy. Corbett’s Ready to Learn block grant would drive about $29 million to the Philadelphia school district, though it comes with strings attached on how it can be used.
Matt Stanski, the district’s chief financial officer, said the $29 million can only count against money above and beyond the first $200 million.
Looking to unions for savings
Additional money for schools may be found in labor savings.
Last week, the leader of the principals union, CASA, brought his membership a plan that would significantly reduce wages and force members to pay into health care. The district won’t yet confirm exactly how much it will save if this contract is ratified. (Members have been voting by mail. Results will be made public Monday.)
The district has also been seeking $103 million in savings from the Philadelphia Federation of Teachers. The PFT contract expired in August. Negotiations have been ongoing.
“I think it would be fair to say that everyone has to do their part … to ensure that the school funding crisis is over,” said Ward, though she wouldn’t commit to exactly what “part” teachers should play.
Between all the moving facets, some, including PCCY’s Cooper, worry about the catastrophe that could happen if things don’t fall into place.
“It will mean that the tragic cuts that happened this year will be made worse,” she said.
The year-to-year funding rigmarole and budget cuts have Mount Airy parent Kate Connolly thinking about taking her kids and skipping town for greener pastures.
“Someone like me, a taxpayer for 25 years, I’m wondering, ‘Should I get the hell out of the city?'” she said. “As a fantasy, I kind of longingly look at schools who have what they need as just ‘standard’ … I sometimes wish I could be like a normal parent like that.”