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Despite entreaties, Clarke is firm on splitting sales tax between schools, pensions

By Dale Mezzacappa on May 7, 2014 02:30 PM

At hearings this week, School District leaders, education advocacy groups, and others have been imploring Philadelphia's City Council to swallow hard and do what the state legislature authorized it to do: extend the 1 percent surcharge on the sales tax and devote the first $120 million to the city's schools.

District leaders have already budgeted the money, and each day that goes by without a guarantee of recurring dollars, they pointed out, increases the chances of another school year marked by instability and disinvestment.

Council President Darrell Clarke has given his answer: No.

In a letter to Donna Cooper, executive director of Public Citizens for Children and Youth, Clarke reiterated his position that the money should be split between the District and the city's ailing pension fund.

"As I have stated previously and consistently, City Council's primary responsibility is to Philadelphia taxpayers," Clarke wrote. "That is why our alarmingly low pension fund balance is of equal concern as the School District of Philadelphia's fiscal challenges."

He dismissed the results of an actuarial study showing that the split would be devastating to the District, but only speed up reaching the goal of 80 percent funding of pension reserves by a year or two. He said the study was based on flawed assumptions and projections.

"It would be irresponsible for the City to treat them as facts," he said. 

Clarke said that he would support giving the District $120 million next year and then gradually reducing the amount to a 50-50 split between the District and pensions.

The problem, however, is that making any changes to what the legislature approved would require Harrisburg to act again. State leaders have been showing impatience with Philadelphia's failure to enact the sales tax, which is hindering efforts to get the state to free up more money for the schools.

"Only the amended State Legislation (50-50 split) guarantees new, reliable and recurring revenue to the Pension Fund," Clarke's letter states. "To increase funding for [the District] with no reliable framework for shoring up the Pension Fund is to gamble with the City's long-term fiscal solvency."

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Comments (10)

Submitted by Poogie (not verified) on May 7, 2014 4:08 pm
If the council does not come through on this 1% sales tax we are never getting another dime from the State. Apparently Clarke could care less.
Submitted by Ms.Cheng (not verified) on May 8, 2014 8:55 am
It is another shortsighted push on the part of Clarke. Right now what is keeping Philly afloat is the higher education and health care industries, and even these are pushing to grow out of the City, where job growth is better. Families with school age children boost their neighborhood economy, and more importantly, invest in their neighborhoods. A transient population of young students and older retirees can provide consumer revenue, but might not be as motivated or able, to invest for the long term. City workers exist because of City residents. The more residents, the more revenue for City workers, and the more funding there will be for City worker pensions. Focusing on improving the schools can help fund the pensions, while focusing on the pensions at the cost of the schools will in the long run cost the pensions more.
Submitted by Anonymous (not verified) on May 9, 2014 11:35 am
You are far too sensible Ms Cheng. Only the ignorant and self-interested should contribute to this debate.
Submitted by Taxpayer (not verified) on May 7, 2014 5:48 pm
Sounds like gridlock. Good. Maybe there is an outside chance the tax will just expire, but I doubt it. There's no reason Philadelphians should pay higher sales tax than everyone else in the state. It was supposed to be "Temporary", after all.
Submitted by Anonymous (not verified) on May 7, 2014 5:17 pm
HAPPY property value plummet!
Submitted by Anonymous (not verified) on May 7, 2014 7:16 pm
Council should pass the 1% extension and then if the legislature wants to change it, they could go back next year and do that.
Submitted by Anonymous (not verified) on May 7, 2014 8:05 pm
In truth, the city is screwed either way. That's what happens when you house the state's poor. I guess we should work to kick them out like the suburbs and only build housing for people who will pay $5,000+ a year in property taxes.
Submitted by Anonymous (not verified) on May 9, 2014 11:48 am
Yes, that's what happens when you jack up taxes on businesses and middle class workers for 5 decades and then squander that money running the city for the benefit of insider interests instead of the citizenry.
Submitted by Gtown_Teach (not verified) on May 8, 2014 11:00 am
Darrell should get out of the way. Just pass the stupid bill, and get the schools the money. The legislature will never go for a split 50/50. Also, the 50% would be a drop in the bucket for the pension liability.
Submitted by Anonymous (not verified) on May 9, 2014 5:07 am
It is absolutely disgusting that City Council's top priority is to maintain their fraudulent DROP benefits and keep patronage at PGW instead of funding its schools. The two things are directly related- every $ the city wastes on these machine boondoggles is a $ it can't spend on education. Do those two simple right things and the pension fund gets close to $1 billion, equivalent to some 20 years of the sales tax Clarke is trying to divert from the schools. But that is the point- Clarke does not care about kids, schools, or the quality of life in the city. He only cares about the $500k DROP check he intends to steal from the Philadelphia taxpayers someday. I support more state funding, but really why should anyone else give Philadelphia another dime when it choose to squander HUNDREDS OF MILLIONS on stupid unnecessary stuff like this instead of its schools?

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