Clarke school $$$ plan criticized

MATT ROURKE / ASSOCIATED PRESS Mayor Nutter calls plan a "risky and dangerous strategy."
MATT ROURKE / ASSOCIATED PRESS Mayor Nutter calls plan a "risky and dangerous strategy."
Posted: May 16, 2014

IT TOOK 10 MONTHS for Council President Darrell Clarke to introduce an extension of a city sales-tax hike that could send money to the School District of Philadelphia and the pension system.

It took about four hours for it to be picked apart by skeptics, including Mayor Nutter, Superintendent William Hite and School Reform Commission chairman Bill Green, who called it "a distraction."

"It's not going to happen," Green said of the proposal's chances of being authorized by Harrisburg lawmakers. "I'm pleased that a bill has finally been introduced, but I don't think it's responsible to play a game of chicken with Harrisburg."

Clarke's plan for how to distribute money from extending a city sales-tax increase (from 7 percent to 8 percent overall), which is set to expire in July, gives $120 million to the district in its first year and then phases in a 50/50 split of the revenue with the city pension fund over four years.

That would require the state Legislature to revise authorizing legislation it passed last year that allowed the city to permanently extend the tax hike, which was adopted as a temporary lifeline to the city during the recession.

The state law requires the first $120 million of revenue to go to the district every year. The remainder, which would start at $2.8 million and grow over time, would go to the pension fund, which has a $5 billion unfunded liability.

Without the $120 million in sales-tax revenue, which the district was already counting on, the schools will be facing a $336 million deficit.

Clarke said yesterday that his proposal had support in the Philadelphia delegation to Harrisburg.

"If I'm not going to be optimistic about measures we put forth, then what's the point?" he said. "At the end of the day, we need to maximize opportunities for schools. But we also need to maintain the fiscal health of the city."

Local officials are also asking the state to pass a $2 per pack city tax on cigarettes that would fund the schools. The chances of that passing are even slimmer in Harrisburg, where the House, Senate and Governor's Office are all controlled by tax-averse Republicans.

"A complicated message in Harrisburg - on the one hand, take money away from the school district with the sales tax; and on the other, giving it money with the cigarette tax - will get neither done," said Green, who was appointed to the SRC by Gov. Corbett.

Steve Miskin, a spokesman for the state House GOP caucus, said only that state lawmakers would continue to have conversations with Philadelphia officials about the sales-tax legislation.

Nutter said he supports Clarke's desire to split the revenue 50/50 with the pension fund but doesn't want to risk losing the tax altogether to try to make that happen.

"It is my concern that that is a risky and dangerous strategy to put all those dollars at severe risk," Nutter said. "We do not know ultimately what the General Assembly will do. What we do know is that the school district desperately needs the $120 million that they've already built into their budget."

Hite said in a statement that the Clarke proposal "places the school district at risk of not receiving the funds at all" and "does not reflect the urgency of the crisis facing the school district."

On Twitter: @SeanWalshDN


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