City and state still locked in battle over responsibility for Philly schools
By Dale Mezzacappa on May 3, 2014 01:12 PM
At Monday's annual budget hearing, City Council will hear pleas from School District leaders for more money.
It is a familiar scenario. The same thing happens every year, only this time it is worse. The District says it needs $216 million just to keep the current level of service -- a level in which many schools do not have full-time counselors or nurses, most have no libraries, course offerings have been cut back, and virtually all are scrambling for basic supplies.
Superintendent William Hite has said that without at least that much, the schools next year will be "empty shells." He warned this week that class sizes would rise to as high as 41 in high schools and 1,000 more staff members will be laid off.
Ideally, the District says it wants $440 million in additional funds so it can not only restore cuts made over the last two years, but make a start on Hite's school improvement agenda. It is hoping to raise that by getting $195 million from the city, $150 million from the state, and the rest, about $95 million, through concessions from labor unions, particularly the teachers.
But the political and fiscal realities are not looking good.
City Council and Harrisburg remain locked in battle over who is responsible and who should bear the brunt of the burden for the city's schools, which have been under the control of the state since 2001. And while the District and the Philadelphia Federation of Teachers continue to negotiate, there has been no settlement after more than a year of talks.
A group of five advocacy organizations sent a letter Friday to Council President Darrell Clarke urging him to pass a sales tax extension that would send $120 million annually to the schools. The state legislature has authorized it, and the District is already counting on that money.
But Clarke wants to split those revenues between the schools and the city's lagging pension fund and instead increase the tax on a pack of cigarettes by $2 to raise money for education. City Council has passed such a measure, but it requires authorization from Harrisburg, where the reception has been cold.
Hite has said that he is "incredibly frustrated" that the District is still in the same position it was in last year, still without guaranteed, recurring sources of revenue. New School Reform Commission Chairman Bill Green called the situation "immoral" and said the SRC was "disgraced" by what is happening.
But city and state officials contacted Friday didn't offer much assurance that there is a solution within reach.
In an interview, State Budget Secretary Charles Zogby reiterated that even if the state had money -- and he says it doesn't -- Harrisburg is waiting for the city to take action on the sales tax and for the PFT to "do its part."
"There is a strong belief in Harrisburg that City Council needs to implement the solution they've been given by the sales tax, and everyone is looking to the PFT to help contribute to the solution," Zogby said. "When we have $120 million that is, as yet, untapped, we can't be going before the governor and General Assembly asking for more money."
Zogby also said that legislators were aware that the city is owed hundreds of millions in delinquent real estate taxes. "How can they ask for new money when they are not collecting all they can from currently authorized taxes?" he said. (The city has stepped up its effort to collect these taxes, and asked for state approval of measures to make it easier to go after deadbeats who also own property outside the city, not all of which have been enacted.)
Meanwhile, Nutter administration officials released more information showing that splitting the sales tax revenue, as Clarke wants, will be devastating to the District over the next five years but have minimal positive impact of the goal of shoring up the city's pension reserves so they are 80 percent funded. At best, it will shorten the time the goal is reached by a year or two, to 2028 from 2030.
The advocacy groups cited this information in the letter to Clarke.
"The diversion of hundreds of millions of dollars from the District to hit the same 80 percent pension fund target only two years sooner does not make fiscal sense," said the letter, sent by the Education Law Center, Education Voters of Pennsylvania, the Pennsylvania Budget and Policy Center, the Philadelphia Education Fund, and Public Citizens for Children and Youth.
Clarke's chief of staff, Jane Roh, said in an email that the Council president is not persuaded.
For years, she said, Council had been working on plans for using the sales tax money to shore up the pension fund, before state officials "hijacked that proposal ... in order to avoid fulfilling a request by the state-run School District of Philadelphia for more funding."
Clarke urged approval of the cigarette tax.
Erik Arneson, a spokesman for Senate Republicans, said that Majority Leader Dominic Pileggi was "open" to the cigarette tax. Sources said that the House, however, is still opposed.
One Harrisburg source said that the state's own fiscal situation is in trouble, and that if it becomes necessary to consider raising revenue and not just cutting programs -- Gov. Corbett is on record opposing tax increases -- a statewide cigarette tax increase may be an option. In that case, there would not likely be support to let Philadelphia increase its own cigarette tax even more.
In this tight budget situation, advocates' hopes of restoring an education line item to the state budget that reimburses districts for expenses related to the creation of charter schools seems remote, the source said. This line item, eliminated by Corbett two years ago, annually brought more than $100 million to Philadelphia. Even if it was affordable, it isn't politically popular.
"It's highly unlikely that the General Assembly would embrace an approach that has the effect of sending the lion's share of funds towards Philadelphia," the source said.
Philadelphia has 86 charter schools, more than half the state's total.
The District's situation could actually get worse. Increases in education funding that Corbett has proposed and the District is counting on next year could be pared back as the state looks for ways to close what is turning into a more than $1 billion hole due to revenues that are coming in below projections.
"April's poor revenue collections seriously complicated an already challenging state budget," wrote Arneson, Pileggi's spokesman. "We are in the process of re-evaluating every line item to see where additional savings can be gleaned. I won't rule out the possibility that some line items may see increases, but I don't think optimism is warranted at this point."
The advocacy groups say that the primary goal is to get a fair, predictable state funding formula for education -- a view echoed by Lori Shorr, Mayor Nutter's chief education officer.
"We haven't fixed the underlying problem here, which is full and fair funding on the state level," she said.
Earlier this week, Shorr accompanied Mayor Nutter on a trip to George Washington High School, so he could view conditions firsthand. She has visited other schools herself.
She said she heard students talk about having no supplies in their biology or chemistry class and doing all their experiments on paper. She also heard about how they once had four foreign languages and now have only one.
Music teachers told her they are fixing instruments with money out of their own pockets. Two principals said that they can't serve breakfast in school, because there aren't enough adults to supervise.
"People talk in theoretical and political language, but until you are in the school and walking the hallways ... you need to see the real impact right now," Shorr said.
"And it will be worse next year if we don't get the things done that need to happen."