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Explaining Corbett's school funding plan

In question-and-answer format, here is an explanation of the components of the School District's funding package presented Sunday by Gov. Corbett.

What sources of new money does the governor’s plan include?
​For this year, it includes $45 million in a one-time federal infusion. An additional $50 million comes from borrowing against money that will start flowing to the District next year from extending the 1 percent city sales-tax surcharge beyond 2014 and diverting proceeds to the schools. It also projects that $30 million more will come from more-aggressive city property tax collection (the city projects only $28 million). And it includes a nearly $16 million increase in state basic education funding for the city. But that is only $2 million more in the basic education subsidy than the District had already included in its austerity budget. The governor says it all adds up to $140 million, but the plan would only produce roughly $125 million in revenues not already factored into the District's budget. Whichever numbers are used, the total is well below the $180 million that the District sought from state and city government.

 

How much of this is city money vs. state money?
The basic education increase is state money, and the $45 million is money that the state would otherwise have had to pay back to the federal government – it is forgiveness of a past overpayment. The rest of the money will come from people who live, own property, or shop in the city.

How much of the money is one-shot vs. recurring?
The one-time $45 million grant and the $50 million loan are to be replaced by the annual proceeds of the sales tax in 2014-15. The sales-tax surcharge should ultimately generate $120 million annually in recurring revenue. It is still unclear whether the $30 million from more-efficient city property tax collection will be recurring or a one-time recouping of delinquent taxes. Certainly the hope is that the city will be able to collect more of the money it is owed from taxpayers each year than it now does. Increases in basic education funding are recurring.

What will the sales-tax extension mean long-term?
It means that people who live and shop in Philadelphia will pay a higher sales tax (8 percent) and that “up to $120 million” from that 1 percent bump will be used to fund the schools. The $120 million matches the amount that the District had asked for from the state, but the money will come from local sources, and that full amount won’t be achieved until 2015-16.

What additional action is needed to guarantee the funds?
The plan makes the $45 million grant and the $50 million borrowed against the future sales tax revenue contingent on the new secretary of education, William Harner, “certifying” that the District has adopted certain operational, educational, and fiscal reforms. Increasing property tax revenues on a recurring basis may depend in part on whether the city gets three new bills from the state expanding its powers. Those bills are not on the immediate docket, but City Council members are confident that they will be approved.

Some are saying that Corbett’s plan provides $274 million out of $304 million needed. Has this plan closed nine-tenths of the gap?
To draw that conclusion assumes that the deal guarantees that the District will get the entire $133 million it is seeking in concessions from the unions. The provision requiring certification by the secretary of education strengthens the District’s hand in getting the concessions. But union president Jerry Jordan argues that the union is now being asked to contribute more than the combined efforts of the city and state.

Using the $274 million figure also counts the entire $16 million increase in the basic education subsidy as an increase over what the District had already budgeted, when only $2 million is above what the District had already factored in.

Does this plan mean that the District can avoid nearly 4,000 layoffs?
That is not yet known. The District will most likely offer a more-detailed response to the package later in the week after it is finalized and budget officials have had the chance to analyze its implications. Negotiations with the union are likely to continue at least up to the Aug. 31 deadline. State action, at best, gives the District about half the dollars needed to avert the layoffs in its gap-closing plan.

Are there any prospects for additional revenue for this year?
Slim. Council is still interested in approving the cigarette tax, which would require state legislative action. State Sen. Anthony Williams said he may introduce enabling legislation in the fall. It is not clear whether that would be in time to raise more money for fiscal 2014. Advocacy groups are still interested in changes in the Use and Occupancy tax on businesses that would have brought in about $30 million annually. Council President Darrell Clarke said that the window for that has passed; the City Charter doesn’t permit new taxes to be enacted after the fiscal year has begun. In any case, he said, Council does not want to jeopardize any future chance at getting the cigarette tax, which is estimated to bring in more revenue than U and O over the long term.

 

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Comments (26)

Submitted by fate (not verified) on July 1, 2013 7:44 pm
Short term joke..
Submitted by ConcernedRoxParent (not verified) on July 1, 2013 7:40 pm
PA Rep Thomas calls this package "Speculative." "Tantamount to Voodoo". Think that pretty much sums it up.
Submitted by Katrina Ohstrom (not verified) on July 1, 2013 7:28 pm
Thank you Dale!
Submitted by Anonymous (not verified) on July 1, 2013 8:24 pm
What guaraantee is there that the city can collect that much? They are asking for way too much in concessions from the PFT, which of course was Hite/Corbetts intention. If they coudln't get anything on seniority or evaluations it was going to come out of other concessions like healthcare. It's an atrocious amount of money- period. Question- how much money is being saved in healthcare expenditures for laid off employees and where is that money going to go?
Submitted by Anonymous (not verified) on July 18, 2013 7:38 pm
As a laid off secretary I can tell you I had to lay out over $1300 & that is just for July. I still have no insurance as they are so slow to process the paperwork. That is what I get for 23 yrs of service. They will probably use the money for the two new employees they just hired for $175,000 each.
Submitted by Anonymous (not verified) on July 1, 2013 8:06 pm
This is a joke & won't get the union to budge. The lack of any commitment from the state is going to get the union to dig their heels in deeper. Asking the union to give more than city & state is laughable at best but borderline stupid. Backing the union into a corner isn't going to work. You have to at least make it seem appealing to the masses.
Submitted by Joe K. (not verified) on July 1, 2013 9:43 pm
Normally, backing unions into a corner is looking for a strike. With Jordan at the helm, I'm not confident he'll fight at all. Maybe Corbett, Mutter and Pedro have overplayed their hand but maybe they know something we don't but Jerry does. He certainly sounds much more conciliatory than the above slitherers. My hunch is if Jordan really is on the PFT's side, he's banking on the courts to side with us.
Submitted by Anonymous (not verified) on July 2, 2013 9:49 am
Joe, if you're not willing to strike even if you don't have the support of Jordan then I'm not sure you're taking your union rights--that so many have fought and died for--seriously. Stand up for yourself, man, and [insert trite 'manliness' comment parroted by Joe]. ;-)
Submitted by Joe K. (not verified) on July 2, 2013 10:57 am
I have no idea what you're talking about. Sounds like a circular conversation between 2 or more of your personalities. That's the good thing about being schizoid--you're never alone. Only kidding, sort of--I really don't understand unless you're trolling.
Submitted by Anonymous (not verified) on July 18, 2013 8:58 pm
Joe I'm curious, have we heard much from Jordan or is he in negotiation mode? I know that in Chicago they have lawsuits that are being heard, so if this is the case one shouldn't 'expect him to be talking about contract details. Why would he give away the store or not in public if he doesn't have to?
Submitted by anon, anon, we must go anon (not verified) on July 18, 2013 9:41 pm
We just got a text from the PFT today that said " At negotiations, we're pushing for better learning conditions for children and educators. Better schools=A Better Philly". It contained the following link: http://bit.ly/12Boouj which is a link to the powerpoint presentation that outlines the PFT's proposals to the SDP. You can sign up for text alerts--the directions are at PFT.org
Submitted by Anonymous (not verified) on July 18, 2013 9:28 pm
Negotiations are taking place almost daily, if you can call it "negotiations." The District has flat out refused to budge from the list of demands they presented months ago and Jordan isn't budging either in opposition to those demands. PFT members need to realize that the district is deadly serious about their demands, too many PFT Members think it is just "talk" -- it isn't. Members need to start getting involved more and be prepared for what may be necessary. Keep an eye on the NAACP and news regarding lawsuits over the school closings, with the PFT's complete support.
Submitted by Poogie (not verified) on July 1, 2013 8:22 pm
A farce that Philadelphia came up with no additional aid. It appears that Hite and the outside foundations that pull his strings always wanted the lion share of the money to come from Teacher's pockets. This serves Hite's masters well since lower teacher salaries for Public School teachers also lowers the pay scale that the charter operators pay for their workers. Soon Philadelphia will be the land of $35,000 a year teachers turning over every two years and replaceable by new TFA members so no one builds up any seniority or even gets up in the pay scale. The result a dream work force for the charters operators to exploit made possible by this plan to break the PFT. Nutter loves it. So does Corbett. And what about our friend Obama why is he screwing the PFT which supported him?? Note that the money forgiven by the Federal government will not be released to the SDP until the PFT agrees to labor concessions. It is the forgiven of federal money being used to break our union and Obama is OK with that. Nobody seems to have a problem with the use of forgiven federal money to be employed breaking a union. Bob Brady got it forgiven so he also must be OK with using that money to break the PFT?? Why do we support any two faced Democrat in this city??? Riddle me that. Why does the AFT, PFT etc give Obama money when he uses federal money to make us give concessions? Is that the role of a Democratic President Could someone Riddle me that one? How about you Jerry? Got an answer why PFT gave Obama money and then he feels so grateful that he can kick us to the curb for the benefit of the charters??
Submitted by tom-104 on July 1, 2013 9:08 pm
Working people need our own party which will have a platform for the common good, not corporate profit. We are the leaders we have been looking for!
Submitted by Anonymous (not verified) on July 1, 2013 8:57 pm
I am a teacher for 29 years. I am not pro-union. However, I believe the union should not even respond to this with any serious consideration. The state is laughing at us and our children. Terribly sad.
Submitted by Joe K. (not verified) on July 1, 2013 9:18 pm
The PFT will be forced to respond because the contract expires in 60 days. The question is what will Jordan do? I suspect he hopes the courts side with the PFT and that he has no alternate plan except to concede which will effectively end the union. On the other hand, if Jerry is complicit is some way, all is lost anyway and as Eileen stated correctly 2 weeks ago, we'll all be working for charters and making $30,000 a year with no rights and no protection-- just the way corporations love it. Nutter will move on to a job on the National Stage and Corbett will get paid for a job well done. Hite will move on to "close" somewhere else after doing that job here. Yes, Obama has been a sellout of the very worst kind, a person who gave "Hope and Change" to the marginalized and institutionally abused and threw them all under the bus as if they were trash. Elmer Gantry would be proud. Lad better hope there is no God.
Submitted by Gtown_teach (not verified) on July 1, 2013 9:47 pm
PFT shouldn't consider this. Corbett thinks he can bust the union's back with all these strings. Don't give up a dime, Jerry. I'd rather put in the extra work with doing lunch duty on my lunch and hall monitoring on my prep than give up money and benefits. We'll all be doing extra work anyway, even if we go along with concessions. I'd rather be getting paid more if we gotta' live with this nonsense.
Submitted by Stewart (not verified) on July 10, 2013 11:37 pm
Easy for you to say, you obviously didn't get a layoff notice. But thank you for standing with your fellow teachers and staff.
Submitted by Anonymous (not verified) on July 1, 2013 9:28 pm
I have my PhD and won't be working for 35k a year.
Submitted by Joe K. (not verified) on July 1, 2013 11:51 pm
Hite doesn't believe, well, it's not he personally, but the shot callers don't value seniority and extra degrees etc. The point is to make money and that's the only goal. Folks need to read up on the Quality of Life for working class people before unions for a glimpse into the future if unions go the way of unicorns. These folks are dead serious and we need to be too in resisting their actions and goals. And PLEASE don't say it can't happen because that's stuck on stupid. And don't even get me started on Obama and his shell game self. We can only blame the Republicans for so long before we have to look at him and how he has completely ignored the plight of the very people he pandered to, to get their vote. A pox on all their houses !!
Submitted by Anonymous (not verified) on July 1, 2013 10:36 pm
I don't have my PhD and won't be working for 35k a year. You can be sure of that!
Submitted by Anonymous (not verified) on July 2, 2013 8:20 am
How do other states offer stable funding for their schools and children, without this yearly crisis management requiring negotiation among competing/conflicting politicians?
Submitted by Anonymous (not verified) on July 2, 2013 12:04 pm
Funding, Formulas and Fairness: What Pennsylvania Can Learn From Other States' Education Funding Formulas | http://www.elc-pa.org/ELC_schoolfundingreport.2013.pdf #useaformula
Submitted by Anonymous (not verified) on July 2, 2013 11:00 am
If your waiting for the courts to decide this matter, keep waiting. just use the principals contract as a measuring stick. They agreed to postpone their 3% raise that was supposed to kick in this past school year, because the district begged them. This school year comes, their raise doesn't kick in, they go to the courts and an arbitrator ruled in the principals favor. Sounds good right? Well, they didn't get their money because "you can't get blood from a stone." So I'm not encouraged with the courts. Now a second point. Jerry Jordan has two options: 1. He gives in to save jobs. Yes this will mean teachers bucking up money for medical, and probably taking a 3-5% salary decrease. Or 2. He digs his heels in, gives up nothing, and we wait for the first major incident (a child or teacher dying in a school) for the powers that be to react. Anyway you look at this situation the outcome is not favorable for anyone. Plus I love how the politicians always use the phrase "provide the students with a high quality education." How can you have a high quality education when most students do not have access to computers or smart boards in their classrooms? Or when you have zero discipline because Hite took away the ability to suspend or even punish students who do not care about their education, and are only in school to avoid truancy court. Such a mess.
Submitted by iorgos (not verified) on July 2, 2013 2:56 pm
The recently approved 2013-14 PA Budget ignores the state's constitutional obligation to properly fund public education for all citizens, ignores much needed road/bridge infrastructure repair, and continues to underfund pension obligations... But at least right-wing lobbyists managed to revoke the private aircraft sales tax. That's right folks, if you want to buy a private jet, Pennsylvania is the place to go! http://www.pennlive.com/midstate/index.ssf/2013/06/lobbyists_lick_their_...
Submitted by Anonymous (not verified) on July 2, 2013 7:19 pm
PFT just needs to go away all they do is protect sub-par teachers they are the reason why this district is shit.

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