Phila. City Council Rules Out School District’s Full Cash Request

By Mike Dunn

PHILADELPHIA (CBS) — Sources tell KYW Newsradio that Philadelphia City Council has decided not to meet the school district’s request for more than $100 million in new city funding.

The lawmakers instead have set a lower goal of about $80 million, and how they’ll get there is very unclear.

After weeks of closed-door wrangling among councilmembers, sources indicate there is agreement on one point: Council will not provide the full $103 million in additional city funding requested by schools superintendent William Hite.

Instead, the consensus among councilmembers is to provide in the range of $70-80 million — just under the school district’s projected deficit of $85 million.

But how to achieve that? Councilmembers remain resistant to a major property tax hike as Mayor Nutter proposes, but there seems to be no consensus on alternate means.

According to multiple sources, a host of ideas are being looked at, including increasing the city’s Use and Occupancy (U&O) tax, raising the tax on off-street parking, passing a smaller property tax hike, and/or the sale of tax liens to third parties.

There also has been discussion of reviving Mayor Nutter’s idea of a tax on sugary beverages — an idea that Council shot down twice in recent years.

But at this late stage in the budget process, a formal soda tax proposal has yet to surface and is considered unlikely.

For his part, City Council president Darrell Clarke reiterates his belief that Harrisburg isn’t doing its part and is thereby putting the onus on City Council.

“Here we are again, being asked to stick our hands in taxpayers’ pockets and put up additional dollars for the schools,” Clarke tells KYW Newsradio.  “We will figure out a way to get some money to schools, but the uncertainty of the state (budget) puts us in a position where we don’t know how much we can do this year.”

Councilmembers will reconvene next Wednesday to resume budget discussions, and they hope by that point to have reached a consensus on a mix of revenue measures to at least close most of the school district’s project deficit.

“I think that Council will clearly deal with that particular deficit. We’ll have something together,” says Clarke. “I’m not sure of all of the sources. And we’re not sure of the amount.  But I anticipate having that within the next week.”

Initial approval of a budget package next week would allow for final passage on June 18th, which is the final scheduled weekly meeting of City Council before its annual three-month summer recess.

Schools superintendent Hite asked for $103 million from the city and twice that amount from the state.  Clarke officially won’t rule that out, but indicates it is unlikely.

“The 300-million-dollar figure is essentially Dr. Hite’s ‘Cadillac’ version of what he’d like to see.  Whether or not we’ll be in a position to deal with that this fiscal year, or the subsequent budget cycle, remains to be seen,” Clarke says.

Mayor Nutter, in his budget, proposed a 9.3-percent property tax hike to raise an additional $105 million for the district, slightly above Hite’s request.  His budget experts argue that only the property tax is a viable option, because it is recurring and it is paid by hundreds of thousands of property owners.

Other taxes, they say, are smaller in scope, so increases would be more onerous on those who pay them.

“The best solution calls for stable, recurring revenue that does not impact the city’s general fund, that does not require prior state approval, and that meets the school district’s funding request. (The mayor’s) proposed property tax increase meets these criteria,” says the mayor’s spokesman, Mark McDonald.

The U&O tax is a tax on the commercial use of real estate.  It is separate from the property tax but based on the same assessments.

 

 

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