May 21 — 10:51 pm, 2014

District officials plead again with City Council for funds to avert a new round of layoffs

City Council summoned School District leadership Wednesday to answer more questions on the needs of the schools and to argue over what the city can and should provide.

But after three hours of sharp verbal sparring, they seemed no closer to a breakthrough that could get the District enough money in time to avoid triggering hundreds of layoffs and planning for class sizes in September of 40 students or more.

While this hearing was going on, unbeknownst to participants, a 1st grader collapsed in a school without a nurse on duty and later died, triggering new outrage that conditions in the District caused by underfunding are not just inadequate, but also lethal.

At the Council hearing, Superintendent William Hite said that since their last trip to Council 16 days ago, “we’re no better off. In fact, we’re worse off. Any reduction of the current situation puts teachers and staff in jeopardy.”

Hite explained that time was of the essence. Principals have just finished selecting new teachers for their schools – and without guarantees of more revenue by June 30, some of the teachers may have to be laid off.

“The closer we get to when we have to make decisions by law, the more dire the situation becomes,” he said.

Among other things, layoffs would trigger payouts that the District can’t recover associated with employee terminations, consuming the District’s skeletal central office staff at a time when they should be planning to open schools next year.

“We’re hoping not to send out over 1,000 layoff notices because once we do that, there is an irreversible impact for the District,” he said.

Mostly, the school officials begged for stable, recurring sources of revenue so that they wouldn’t have to come back each year with their hand out, trying to figure out temporary fixes while the schools suffer from lack of funds and lack of stability.

But led by Council President Darrell Clarke, members repeatedly challenged Hite and their former colleague School Reform Commission Chairman Bill Green about their efforts to get more money from the state. They reiterated their belief that Harrisburg must contribute more funds to education in general and Philadelphia schools in particular.

District officials laid out their strategy: They are asking the state to restore a charter reimbursement line item to the budget, which would yield at least $100 million for Philadelphia, and to revert to the old formula for distributing the education block grants that Gov. Corbett has proposed. That would triple the amount of the take for Philadelphia, from about $29 million to $90 million.

But Green told his former Council colleagues that the outlook was getting bleaker for more money from the state this year.

“At the moment, we’re told additional revenue looks unlikely, and there’s a billion-plus deficit at the state level,” he said. He even suggested that the District’s expected shortfall would grow as Corbett pares back education increases.

In response, Clarke pressed to see in writing what the District was asking from the state.

The Council president also reiterated his position that the city must split revenue from a planned 1 percent sales tax extension between the schools and the city’s ailing pension fund. And he didn’t like it when City Finance Director Rob Dubow said that Clarke’s plan to do this, instead of following state-approved legislation to turn over $120 million from the sales tax to the District, would have little effect on speeding up pension solvency, while wreaking havoc on the District’s finances.

Dubow cited a recent actuarial report showing that under Clarke’s plan, which would send $120 million to the District next year and gradually reduce the amount after that, the pension fund would only reach the goal of 80 percent solvency two years earlier — in 2028 instead of 2030.

“I hear those statements continue to be made by you guys; the implication is it’s not that big of a deal in what you reference as a two-year swing, so why should we do additional money for pensions?” Clark shot back at Dubow.

As the testy exchanges continued, officials tried to keep the focus on the big picture.

“What is happening is not sustainable,” Green told Council. “The schools are being held together by principals and teachers who are overburdened with the lack of adults in the building. Our best schools will start to deteriorate over time, and our worst schools will get worse over time with the lack of resources available.”

The District is asking Council for $195 million in recurring funds for next school year and says it needs a total of $216 million just to maintain this year’s inadequate level of services. It is asking Council to enact the 1 percent sales tax extension, providing $120 million annually to the schools, and to find $75 million more. Council is prepared to enact a $2-a-pack cigarette tax that would bring in a huge chunk of that money, but it would need approval from Harrisburg for this, and that has been so far denied.

Clarke’s plan to split the sales tax revenue between the District and the pension fund also requires legislative action in Harrisburg. Mayor Nutter, Hite, and many education advocates have called that strategy risky.

And Council members also wanted to know what the plan was to raise the other $75 million if the cigarette tax doesn’t pass. Dubow said there wasn’t any plan.

Clarke said the only alternative was to raise other taxes or to transfer funds by cutting out needed services from the city budget. Green agreed with Clarke that this was problematic, but added that in his view there is no choice.

“We are formally requesting additional taxes or cuts to city budget to help the School District,” Green said. “What’s more important, to eliminate brownouts at fire stations or 43 kids in a class?”

Green suggested that Council pass the sales tax as is, hope for improvement over the next year in the state education funding formula, and go back to Harrisburg together next year to amend the sales tax legislation along the lines that Clarke wants.

Clarke waved off that idea.

Other council members periodically entered the fray, some with their own ideas – like pulling together calculations showing that Philadelphia contributes more in taxes to the state than it gets back.

Clarke closed the three-hour session by complaining how the District is handling sales of its surplus properties.

Afterward, Clarke said he was committed to getting $120 million more to the schools this year, but wouldn’t say exactly how, or whether he was prepared to drop his insistence on splitting the sales tax revenue.

At the end of the painfully long verbal tussle, Green said he wasn’t sure what progress had been made. Hite pronounced himself frustrated, still unsure that schools will open with enough staff to operate.  

“This creates so much anxiety across the city,” he said.

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