Tradeoffs lurk beneath new Philly schools’ cigarette tax

Very probable, optimistic, off the table, never happening, dead, passed.Such was a week in the life of the Philadelphia cigarette tax.

On Wednesday night, the Pennsylvania House of Representatives approved the measure by a 119-to-80 vote.

The Senate, which passed similar language earlier in the week, will likely vote on it Tuesday. If approved, it will head to Gov. Tom Corbett’s desk.

The Philadelphia School District has been counting on the tax – $2 per pack on cigarettes sold within city limits – to help close its $93 million budget gap. The tax is expected to generate $40 million to $45 million in its first year and double that in years to come.

Even if the district completely closed that budget gap, it says that would only provide enough resources to maintain this past school year’s admittedly “insufficient” levels of staffing and programs. To implement his vision for district growth, Superintendent William Hite has asked for $224 million above this figure.

Philadelphia Mayor Michael Nutter called the cigarette tax passage a “spectacular turnaround, possibly one of the greatest turnarounds in legislative recent history.”

But other advocates worry that whatever new revenue the cigarette tax generates will get eaten into by costs flowing from a change in charter school regulation that got approved during the late-night horse-trading in the General Assembly.

Sausage making

Lawmakers on both sides of the aisle confirmed that many deals had to be made in order for the cigarette tax even to be brought for a vote.

“It was really Sam [Smith, R-Armstrong] and Mike [Turzai, R-Allegheny] who were dead set against it,” said Rep. John Taylor, R-Philadelphia. “But as things moved forward, they realized the gravity of the situation.”

Taylor said the tax was “dead” as late as Sunday night.

A few key compromises revived the measure though, he said, giving Majority Leader Turzai the impetus to bring it for a vote.

Some House Democrats pledged support changes to the state fiscal code that Turzai wanted.

And pension reform legislation pushed hard by Corbett was resurrected from the Human Services Committee chaired by Rep. Eugene DiGirolamo’s, R-Bucks, who is not a fan of Corbettt’s pension ideas.  Had the pension package – which House Republicans insisted that some House Democrats support in return for the schools tax –  stayed in DiGirolamo’s committee, he might have let them languish indefinitely.

“We needed to make sure that happened,” said Taylor. “You can’t leave for the summer having the majority party having their ability to run their agenda thwarted.”

The cigarette tax also wouldn’t have happened, Taylor said, without the overwhelming support of Republicans from the four counties surrounding Philadelphia, specifically Rep. William Adolph, R-Delaware.

“Bill Adolph was incredible. He really stuck his neck out with leadership,” Taylor said.

The most contentious compromise, though, came on another matter critical to the future of education in Philadelphia.  

Turzai linked the cigarette tax legislation to an old bill of Taylor’s, one that alters the appeals process for organizations hoping to create charter schools in Philadelphia.

The amendment allows applicants to petition the state charter appeals board (CAB) if they are rejected by the Philadelphia School Reform Commission. As is, these matters are the sole purview of the SRC, which was exempted from the appeals process in the state-takeover legislation that formed the body in 2001.

The SRC last approved a batch of independent charter schools in 2009. Since then they’ve converted 21 traditional district schools into Renaissance charters. The District hasn’t invited applications for new charters since then. The House bill would require the District to invite applications annually, like other districts in the state.

Some onlookers worry the appeals change will undercut the school district’s ability to manage charter growth, and thus cause already costly charter payments to grow exponentially.

Taylor said adding that element to the bill was crucial in corralling more Republican support.

“It was another reason that a member that wasn’t from Philly that would be subject to criticism for making a quote-unquote tax vote would [be able to] vote for it,” he said.

“The charter language was purely and simply putting into Philadelphia what is in place in 499 other districts,” said Stephen Miskin, spokesman for House Majority Leader Turzai.

“It doesn’t say you automatically get it,” he said. “It just gives you a chance to appeal, nothing more, nothing less… In a sense it’s giving them due process that was otherwise denied.”

A controversial moratorium

The district has instituted a moratorium on new charter growth, citing the need to be able to control resource drain that charters cause for their home districts under the state’s system for funding charters.

The moratorium hasn’t included the Renaissance program, in which the district asks charters to take over schools serving children within defined neighborhood boundaries.

Taylor says the moratorium has been harmful to his constituents.

He says demand for charter schools is tremendous in his district, which includes Port Richmond, Bridesburg, and parts of Juniata Park, Frankford, Wissinoming and Tacony.

“The demand for my area is so great that I could fill every single charter seat just from people coming into my office, as if I have the ability to do that,” he said. “I have to tell them I don’t, and that makes for hard feelings.”

Taylor said he originally wrote the legislation along with Rep. Keller, D-Philadelphia back when Arlene Ackerman was schools superintendent.

During her tenure, he says he watched as the school district ignored an application for  what he felt would be a great new charter option for Philadelphia families.

“The entire application of 3,000 pages sat on someone’s floor. If it’s ignored in every other district, it’s deemed denied, and it’s given an appeal,” he said. “In our case, if it sits on a floor, that’s where it sits, and that’s it.”

Taylor has much more trust in the district’s current leadership, but still feels would-be-charters should have more opportunities to pitch their cases.

“The members of the School Reform Commission and the governor, they’re going to come and go,” he said. “The appeals process: that’s going to stay in place.”

When asked about the possibility that this would undercut the district’s ability to manage its bottom line, Taylor said simply:

“We’ve got to get the charter reimbursement back,” he said, referring to the state’s former practice of subsidizing districts for students who transfer to charters.

Corbett axed that line-item up in his first term.

“That’s the only thing that we’re subject to criticism for, frankly, with Governor Corbett,” said Taylor about the governor’s education record. “It was a huge blow to the district.”

Costly in the long run?

Education advocates worried that this legislative compromise would come to haunt the district in the long run.

“The one saving grace of the charter movement in Philadelphia has been the SRC’s authority to approve charters at its discretion,” said David Lapp, staff attorney at the Education Law Center in an email. “It has not meant fewer charter schools. To the contrary, charter schools in Philadelphia have continued to expand at rapid rates at the expense of district neighborhood schools. But in recent years the SRC has wisely restricted new charters to “proven operators” and asked them to take over “struggling” district schools.”

The state Charter Appeals Board (CAB) is comprised of six gubernatorial appointees in addition to the secretary of education.

Appointees serve four year terms.

Legislation that recently passed the Senate (SB 1085) would expand the CAB to include two new members: a charter school board member and a charter school administrator.

Lapp worries that the CAB won’t have Philadelphia’s best interests at heart:

“By forcing the SRC to receive new applications from non-proven would-be charter operators and permitting those applicants to appeal to the state Charter Appeals Board, we can again expect greater expansion of additional poorly operated charter schools that under-serve vulnerable students. Without additional state financial support, the cost of this expansion could swallow up the modest gains from the cigarette tax in the long term.”

Donna Cooper, executive director of Public Citizens for Children and Youth, questioned the logic of pitting the state-controlled SRC against another state board:

“This is not a great statutory or organizational construct to have one state board questioning the decisions of another state board.”

But Cooper rejected the idea that the change would lead to unfettered charter expansion.

“It puts obviously more pressure on the school district to be transparent, objective and standardized in its approach to reviewing new charters,” she said, “but it’s not an automatic opening of the flood gates by any stretch of the imagination.”

Fernando Gallard, spokesman for the Philadelphia School District, had little to say about the substance of the change.

“At this point we’re still analyzing it,” he said. “We just haven’t had a chance to fully see how it’s going to affect us.”

More work to be done

Before the cigarette tax or the charter appeals changes become law, the bill must be considered by the Senate.

A spokesman for Senate Republicans said they were still reviewing the language changes in the bill.

State Sen. Anthony Hardy Williams, D-Philadelphia, said he expected it to pass handily on Tuesday. Williams helped the cigarette tax pass the Senate earlier in the week. Although he’s long been a supporter of charter expansion, he says he had no hand in amending these rules into the legislation.

“I can’t imagine that that language would cause the bill to have any issues going forward,” he said.