Countdown, Day 25: Mayor, Council promise schools $50 million, but disagree on source
by Dale Mezzacappa on Aug 15 2013 Posted in Countdown to calamity?
Mayor Nutter and City Council presented dueling plans Thursday for getting a needed $50 million to the School District, but both the mayor and Council President Darrell Clarke said that Superintendent William Hite can count on the money.
Hite said that he would immediately begin recalling critical staff so that schools could open as scheduled on Sept. 9.
"The bottom line here is that schools will open safely and on time," Nutter said.
Even so, they will open with less than optimal staff. It is still not clear, for example, whether each school will have a counselor.
The money, Hite said in a statement, "will enable us to provide many crucial school functions and restore critical staff positions, including assistant principals, counselors and hallway, recess and lunch monitors."
District spokesman Fernando Gallard said that a detailed breakdown would not come until next week.
Amid the battle in City Hall over the source of the $50 million, advocates continued to assert that $50 million is not enough.
"Mayor Nutter and Council President Clarke should be applauded for their efforts, but it's not enough and still leaves $180 million needed to have a successful learning environment," said the Rev. Dr. Kevin R. Johnson, senior pastor of Bright Hope Baptist Church and a leader of the faith-based organizing group named P.O.W.E.R.
Council would need to vote on the mayor's plan, which involves borrowing against a sales tax extension. And the mayor would need to sign off on Council's plan, under which School District surplus property would be turned over to the city and $50 million would be sent to the District.
Clarke, backed by 10 other council members, said that it was foolish to borrow and pay debt service costs when the property is available and could bring in big dollars from interested developers. He distributed a list of buildings that, he said, together were worth more than $150 million and said that there were already offers on many of them. When Council reconvenes in September, it would transfer $50 million ultimately to the Philadelphia Authority for Industrial Development (PAID), which would purchase, market, and sell the District's surplus property. From those proceeds, the city would get its $50 million back and give anything above that to the District.
Clarke also said that the District would save millions in "carrying costs" for those properties.
Nutter, on the other hand, said that it is simpler and quicker to borrow against the $120 million in future sales tax revenue, which is the tool given to the city by the state. He disputed that the city would be paying $10 million to $15 million annually in debt service because the money would come out of future revenue. He noted that the District already put $28 million from surplus property sales in its five-year plan.
"I believe this mechanism is the best way to immediately get these needed dollars to the School District with virtually no financial impact on our City," Nutter said. He said he was taking "executive action," but Clarke said that Council approval is required and would not be given.
Nutter minimized the disagreement between himself and Council, saying that "all 18 of us" are behind the effort to give the schools money and that they had managed to come together before on big and complex issues.
"We'll figure this out," he said.
Underneath the tug-of-war between the mayor and Council is the reality that Harrisburg came up short on its own contribution and dealt Philadelphia a lousy hand. The District said it had a $304 million budget hole and asked Harrisburg for $120 million, the city for $60 million, and labor for $133 million in concessions.
Harrisburg leaders, without consulting with Philadelphia officials, appropriated as its $120 million contribution an extension of a 1 percent city sales tax -- money that many city leaders, including Clarke, had been counting on to help solve the city's pension crisis. It then said that the city could borrow $50 million against the future revenue to help plug the District's hole this year.
Harrisburg, Clarke kept repeating, consulted "nobody here" about its "last minute" plan before enacting it, not even Philadelphia legislators. Harrisburg is controlled by Republicans, and the city by Democrats.
Gov. Corbett is holding back another $45 million in a one-time payment from the state, raised by negotiating forgiveness of money owed the federal government, until the District gets unspecified "reforms" in the teachers' contract. On Tuesday, City leaders demanded that this money be released, but Corbett's administration nixed the idea.
For the city's contribution to the District's needs, City Council passed a $2-a-pack cigarette tax, but Harrisburg failed to pass the authorizing legislation.
Nutter said Thursday that he agreed with Clarke that money from a sales tax extension could be split between the District and city pension obligations -- provided that the cigarette tax is enacted. That prospect is still iffy in Harrisburg.
Although having the $50 million available avoids the immediate prospect of schools not opening as scheduled, it still leaves the District in a precarious fiscal position this year and going forward.
Hite said that in addition to restoring some additional positions, "this money will also help us to avoid combining grades in single classrooms, offer extracurricular activities at all schools, and ensure adequate maintenance and custodial services. In short, this will get us closer to keeping the elements that make our schools quality educational facilities."
The District had been planning more than 100 "split" classrooms for 1st, 2nd, and 3rd graders -- they save money on teacher costs -- and it is still up in the air whether all of those will be eliminated. In the process of trying to reduce them, teacher allotments to schools will change again, causing further upheaval of teacher staff just weeks before school opens.
Helen Gym, of Parents United for Public Schools, said the $50 million -- however it ultimately gets to the District -- "will ensure inequity of resources across the District. ... It is unconscionable that schools have been given zero book and supply dollars, or that schools with libraries cannot open because the District fails to allocate librarians. Dr. Hite has publicly said that guidance counselors, school aides, and teachers will be distributed at the discretion of central office to the 'largest and neediest' schools. This too is unacceptable. All children are needy. Every child deserves access to a guidance counselor. Every child deserves to have a school aide watching out for them in the lunchroom and on the play yard. As parents, we refuse to normalize impoverishment and deprivation."
Thursday afternoon, the School Reform Commission is holding an emergency session to suspend parts of the school code, Hite said, to ensure maximum "flexibility" in allocating staff under what he called "untenable" conditions. He wants, among other things, to suspend seniority provisions in calling back laid-off employees and suspend pay increases that come automatically depending on length of service.
Update: Gov. Corbett, in a statement, said he supported the mayor's plan and the suspension of sections of the school code.
“I have personally spoken to Mayor Michael Nutter, and I join him in calling on City Council President Darrell Clarke and the entire city council to act immediately to extend the sales tax and authorize the $50 million in short-term borrowing as envisioned in the state’s funding package.
“The key remaining piece to addressing the district’s long-term financial and academic challenges remains an agreement with the Philadelphia Federation of Teachers that puts in place needed fiscal savings and academic reforms. That is where the focus should be, and I encourage both parties to get to work on reaching an agreement that achieves this.”
The School District of Philadelphia faces an unprecedented situation – uncertainty over whether it will be in a position to open safe and functioning schools in September.
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