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City Council passes school tax bills; conditions for $25 million still not clear

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

City Council passed bills Thursday that increase various tax rates to raise $70 million for the School District, but won’t decide until September on conditions for releasing $25 million of those funds.

Council President Darrell Clarke said that Council intends to get more answers on how the District will spend new money after it comes back from its summer recess.

Clarke said that in past hearings on the District budget, "there were a number of issues that were not responded to with respect to the intent of new funding, which were for enhancements to the School District, and we didn’t get reasonable responses from the School District."

He cited plans to contract out substitute teachers and school nurses.

"It’s clear that we may have to sit down, there may have to be a reorganization strategy with respect to how the School District operates — clearly, with the state at the table, because they are the most significant contributor of resources," Clarke said.

Council has parked $25 million of the $70 million in new taxes in its own budget. After Thursday’s meeting, Council is in recess for the summer, meaning that the next opportunity for action to transfer the funds is after school starts. That delay could have an impact on the District’s ability to plan and allocate school staff for the year.

But the ordinance introduced (but not voted on) Thursday regarding the transfer cites Council’s "responsibility to ensure that the School District is managed efficiently and effectively, and that its resources are wisely allocated. This responsibility is owed to our children and their families; to teachers, nurses, and all other School District employees; and to the taxpayers who help fund public education in this City."

"Moving forward, the Council intends to hold the School District of Philadelphia to the highest standards of operational and fiscal accountability, and expects to receive the School District’s complete cooperation" the ordinance says.

In a careful statement after the vote, Superintendent William Hite thanked Council while emphasizing the $70 million figure. He did not mention any problems regarding the delay of transferring the $25 million. Nor did he note that Council fell short of the $105 million the District had asked for from the city so that it could close its deficit, restore personnel and programs decimated by cuts in past years, and embark on Hite’s school improvement strategy.

"The $70 million package passed by City Council will go a significant way toward closing our $85 million structural budget deficit for Fiscal Year 2016," Hite’s statement said. "We are deeply appreciative of Council’s support.

The School Reform Commission plans to vote later Thursday on a $34 million contract to outsource substitute teacher services. It has also put out a "request for proposals" that could result in outsourcing school nurses. The District says it wants to increase health services in schools while not spending any more than the $18 million annual cost of 183 nurses now on staff.

Officials said they have six responses to the health care RFP, but haven’t yet reviewed them.

The Philadelphia Federation of Teachers is strongly opposed to both outsourcing measures.

While opposing outsourcing school nurses, both Clarke and the PFT favor community schools that would house more social and health services for families. Though the District has said it wants to improve school-based health services, it has not attached any references to community schools to its health care proposal.

Clarke issued a statement after the Council vote, vowing to press for full-service community schools with school-based "family service centers." He said this can be achieved through partnerships with nonprofits, service providers and higher education to "supplement existing resources" while not laying off any unionized nurses "or other essential staff."

Clarke also called for the District and the PFT to "come back to the bargaining table and work toward an equitable contract that increases support for our students.” The PFT has been working without a contract for nearly two years, and the two sides are in a stalemate over issues including benefits and seniority.

Council also passed a bill Thursday authorizing the sale of tax liens on commercial properties, the proceeds of which would go to the District. The estimated take from that is $30 million. The city is already planning such a sale of tax liens.

Clarke says that Council’s actions Thursday amount to a $100 million package. But in addition to the caveats on the $25 million, the District has also questioned the ultimate take from the sale of tax liens. The District is already planning for $65 million in delinquent tax collections, and selling liens on some of those properties could cut into that take, officials maintain.

The District had asked for $105 million from Council — and $200 million from the state. But Council rejected Mayor Nutter’s proposal to raise the property tax by 9.34 percent to raise the money. Instead, it raised the property tax by less than half that amount and increased the use-and-occupancy tax and the tax on parking lots.

The advocacy group Public Citizens for Children & Youth reiterated that the District could only count on $45 million. It noted that Council will not meet again to complete the legislative process on the $25 million until after school starts again in September

It also questioned the tax lien proceeds. "Council deserves support for its intent, but it must return to session before the opening of school and complete the work necessary to fulfill its $100 million commitment to our children," the PCCY statement said.

This report was based in part on reporting by Notebook news partner NewsWorks.

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