Pa. budget secretary to Philly schools: Hey, we’ve got money problems, too

By refusing to adopt a budget that would gut schools to the point of “empty shells,” the SRC sent an urgent message to lawmakers in City Hall and Harrisburg.

By refusing to adopt a budget that would gut schools to the point of “empty shells,” the School Reform Commission clearly intended Thursday evening to send an urgent message to the people in City Hall and Harrisburg who provide the district its funding.

One of those is Charles Zogby, the state’s budget secretary. In a local appearance Friday, Zogby acknowledged the district’s dire financial straits, but said the district’s woes are but one of many issues that the governor has to weigh this budget season.

Gov. Corbett and the state legislature have to approve a budget before the end of June. In the meantime, Zogby said that “there’s a lot of fluidity,” and that “all options are on the table.” He said finding more money for schools is going to be extremely difficult given the state’s own budget gap, which hovers between $1.3 and $1.5 billion dollars.

The state’s revenue collections have fallen well short of expectations.

“Everybody’s strapped for cash, including our families that continue to struggle,” said Zogby. “So the governor has to take that into account as well as he goes about his decision making.”

Of the SRC’s five member body, three of the current members were appointed by Gov. Corbett: Chairman Bill Green, Feather O. Houstoun, and Farah Jimenez.

“When they call, we listen,” said Zogby. “There’s an ongoing dialogue. They’re very good advocates for the district, and sharing with us the challenges they face.”

Education advocates have called for a number of revenue generating options including a statewide severance tax on Marcellus shale drilling, accepting federal help to expand Medicaid, and raising taxes on state businesses.

Philadelphia City Council voted last year to levy a tax on tobacco sold within the city, but before it can be implemented it needs the blessing of the tax-averse, Republican-controlled state legislature. So far, education advocates in Philadelphia have waited in vain for that blessing.

Of a possible tax to raise additional school funding, Zogby said:

“Revenues have not been part of the discussion heretofore, but again, I said earlier in the year that all options are on the table.”

‘Empty shells’

Asked point blank if he thought schools should open in September if the district still only had the funding to provide kids with what Hite described as “empty shells…where children come, spend seven hours of the day, and then they go home,” Zogby offered this reply:

“I don’t want to address the ’empty shells.’ I think the district has an obligation to open the schools, to serve the kids the best that they can with the resources that they have. I don’t think just shuttering the schools and leaving 200,000 kids at home – or at somewhere other than schools – is a solution.”

The district has ask for $440 million in additional revenue, which is what it says would be needed to begin putting into action Superintendent William Hite’s vision for reforming the schools.  Just maintaining this year’s level of services, which Hite called inadquate, would require $216 million more in revenues than is now projected, Hite said.

The $440 million breaks down to $195 million from the city (includes the $120 million from the city’s 1 percent sales-tax extension), $150 million from the state, and $95 million in savings from restructured contracts with its labor partners, the Philadelphia Federation of Teachers being the largest.

Zogby grew fiery when discussing the latter.

“We’ve had contributions from every quarter except for the PFT,” he said. “And they continue to remain the lone holdout among the adults in terms of contributing to the solution.”

In February, Corbett’s budget proposal called for the Philadelphia school district to receive an additional $10 million in pension funding and $29 million through a Ready to Learn block grant to be used expressly for improving early childhood literacy.

At Thursday’s meeting, district Chief Financial Officer Matt Stanski worried that that funding may evaporate as the legislature finalized a budget based on lower-than-expected revenue collections.

Zogby said “it’s not inconceivable” that the $39 million goes away.

On the homefront

Mayor Michael Nutter called the SRC’s decision “very smart.”

“The SRC and School District need to see what financial resources will be made available by the City Council and the General Assembly in order to approve a realistic budget to fund our children’s education,” Nutter said in a statement. “This was the only responsible action they could take given the uncertainty surrounding their revenues.”

In a written statement of his own, Council President Darrell Clarke trumpeted the fact that City Council has increased local funding by 36 percent since 2011.

This year, Clarke has been hoping to divide the revenue from the extension of the sales tax with the city’s underfunded pension system, and make up the difference with a new city tax on cigarettes. (Dividing the revenues would require the state legislature to undo its previous action).

Just recently Council decided that if the cigarette tax doesn’t come through, the first $120 million of sales tax money will go to schools.

“To be clear, City Council is not asking the state to make up our share. City Council is asking the state for permission to raise local revenues to send to the District,” said Clarke in a statement. “It is also unacceptable that City Council is being asked again to dramatically increase funding for the District with no say in how the District spends taxpayer money.”

Clarke hopes to create a fiscal oversight board that will “provide additional guidance toward financial stability for the District.”

State Rep. James Roebuck, D-Philadelphia, applauded the SRC’s inaction, and espoused a plan growing in popularity among some education advocates.

Open schools in September that are fully staffed and resourced, he says, and then, “when you run out of money, you run out of money.”

“They’re open for however long the money [lasts],” Roebuck said. “It’s the state’s responsibility to provide the education. If the state doesn’t do that, then the state has to come in and do what they have to do, not just at bare bones [levels], but providing an education for all kids.”