Members struggle over real estate tax increase v. more funds for students
Members of City Council find themselves between a rock and hard place this week after a school district official warned that without an additional $94 million from projected real estate tax revenue the district might not be able to open all of its schools next year.
The statement — made on Tuesday May 1 by the district’s chief recovery officer Thomas Knudsen — seemed to pit taxpayers against students, and put Council members in the uncomfortable position of having to choose.
At the core of the debate is the administration’s plan to implement its Actual Valuation Initiative this year, which would base property taxes on the market value of a property, rather than use the historical assessed value multiplied by a set millage rate. If AVI is put in place, the district would receive an additional $94 million in property tax revenue.
It’s money the district sorely needs.
Knudsen told district officials that without that added revenue the district may not be able to open all district schools in September.
“Were we not to get the $94 million from the AVI initiative, it isn’t clear that we could, in fact, open schools this fall,” Knudsen said. “We would have to make very deliberate choices.”
But, Council members seem wary.
Many worry AVI would wallop city taxpayers with unmanageable tax bills.
Added to those concerns, Council members also have to wonder about Knudsen’s approach. Council and the school district went through a similar game of chicken last year.
No one mentioned Knudsen by name at this week’s Council session, but the threat that the district would be unable to open schools seemed similar to statements made last year by former Superintendent Arlene Ackerman, who said that without additional city money the district would have to eliminate full-day kindergarten.
In the end, that turned out not to be true.
“We got snookered the last time,” said Majority Leader Curtis Jones. “We will be more careful this time — but we will not abandon those kids.”
With the district’s financial situation still not entirely clear, and equally murky data on AVI, it’s unclear what City Council will do.
Members are already scrambling to make sure property owners have some assistance.
Council President Darrell Clarke this week introduced four separate bills that would give property owners a break in the event AVI passes.
“We have to have some level of protection for those individuals who will ultimately suffer some challenges as it relates to paying their taxes,” he said.
Clarke, in previous conversations with the Tribune, said he expected the schools situation to evolve and that he expected Council to lay out some guidelines before it allocated more money for the school district.
Some insist that the two issues are separate.
“We have two separate issues before us,” said Councilman Bill Green. “One is school funding. One is to go to AVI.”
Unequivocal in his opposition to the move to market values this year, Green remained quiet about what he thought of the school district’s insistence that it needs more money, saying only that he would be counted when the time came.
However, he restated his position again on Thursday, blasting the Nutter administration’s plans to push its Actual Valuation Initiative this year, saying Council had not been given enough information to make an informed decision. Administration officials have said they would not have all the information requested by Council until July at the earliest. Council is expected to approve a budget in June.
“This has the potential to be Council’s midnight pay raise,” Green said, referring to a late night vote by the Pennsylvania legislature in 2005 granting itself a pay raise. “But it’s even more irresponsible, because at least the legislature knew what their vote meant.”
Jones said that Council somehow needed to come up with money to help the district.
“This is not a game,” he said. “We know that if a child cannot read to level by the time they are in the fourth grade, how many [prison] cells will be built by the time they turn 18. They are not poker chips. They are our future.”
Immediately after adjourning, Council members crossed the corridor to the caucus room, where they met with members of the School Reform Commission.
In a subtle sign that members expect the tax and budget debate to drag on until the last minute, members unanimously agreed to hold an additional meeting on May 31.
In other news, homeless advocates continued to flood Council chambers, urging members to somehow block Nutter’s ban on outdoor serving of meals to the homeless in city parks. Eight speakers appeared in Council this week, keeping up pressure on the administration to end the ban.