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September 1, 2014, 5:28 pm

School commissioners endorse tax reform plan

Mayor’s proposal would generate additional $94M for education

 

School commissioners this week asked City Council members to go along with Mayor Michael Nutter’s plan to implement the Actual Value Initiative this year so the district would receive an additional $94 million.

Without it, said School Reform Commission Chair Pedro Ramos, the district would face a $312 million budget deficit rather than the $218 million shortfall that is anticipated at the moment.

“Without those funds, our gap next year would grow to over $300 million, which … is unthinkable,” Ramos told Council members Tuesday during Council hearings on the district’s budget. “We believe [we have] a realistic path back to structural financial balance.” Commissioners and district officials gave each Council member a large binder that broke down district $2.6 billion budget by school and included line items of things that are likely to be cut without the added funding. In addition, to a fiscal budget for 2013, the district also brought to Council its restructuring plans, which include the scheduled closure of 40 schools this year, a five-year plan that included a projected $1.1 billion deficit over that period and 24 more school closures.

Much of Council’s concern stems from the mayor’s plan to move the basis of property taxes from traditional assessed values based on millage to full market value — AVI. The shift is expected to increase property taxes for many Philadelphians, which makes many Council members even more uncertain about extra money for schools.

Council members are cautiously weighing all their options as they look at the district’s spending plan and warned school commissioners that they intended to give unusual scrutiny to the district’s figures.

“We have a school district that is all but broken,” said Councilwoman Jannie Blackwell, chair of Council’s education committee. “We have been misled for years … every year the district returns with open hands. We need change.”

Last year, under the leadership of former school Superintendent Arlene Ackerman, the district coaxed $53 million in additional funding from Council. But, many Council members felt she tricked them when it became clear after the fact that despite Ackerman’s statements to the contrary during the budget process, the district did have money to pay for full-day kindergarten. Ackerman used the threat of eliminating full-day kindergarten as her primary bargaining chip in budget talks with Council.

The additional funds came from a property tax increase — the third consecutive year that real estate taxes went up. The experience has left Council gun shy.

“Where is this extra $94 million going?” asked Council President Darrell Clarke about this year’s additional monies, adding: “I don’t think there is anyone who doesn’t think you need more dollars.”

Ramos said the district was simply providing Council with a snapshot of its finances.

“This is the reality of the state of district,” he said. “It doesn’t go away regardless of who is in this seat or your seat. The fundamentals don’t change. We’re showing in practical terms where things are today.”

Ramos emphasized that the SRC is examining its budget options and that the numbers discussed this week were “far from final.”

Though Council members asked many questions — including questions about the search for a new superintendent — transparency and accountability was a re-occurring theme.

“I want to make sure that whatever we do this year it includes long-term accountability, said Maria Quinones Sanchez, in statements echoed by several of her colleagues.

Traditionally, Council has little oversight of the SRC.

Councilman Dennis O’Brien, a former state representative, said the real responsibility rested not with Council but with the mayor and Gov. Tom Corbett, because they appoint SRC members.

“We have a dysfunctional conversation here,” he said. “We have an SRC presenting assumptions that only the mayor and governor can respond to. We are here as window dressing. There are two people who can change the conversation and that is the governor and the mayor.”

Ramos said the SRC has pressed the governor for his support.

“We’ve asked the governor for support in every way we can,” Ramos said. “We are asking the governor to work with the SRC on fiscal sustainability, but this can’t be done in quick sound bites.”

Council is conducting its budget hearings as a committee of the whole, and the education budget hearings drew every member of Council with the exception of Councilman Brian O’Neill.

 

Contact staff writer Eric Mayes at (215) 893-5742 or This email address is being protected from spambots. You need JavaScript enabled to view it. .