Commentary: In KOZ vote, new Board of Ed ‘showed its potential’
Last week, the Board of Education showed its potential by debating the boundaries of one of the most important powers it has – approving local tax subsidies that impact the School District’s financial future.
Before them was a package of 68 properties seeking board approval for the Keystone Opportunity Zone (KOZ) program, the state’s most generous subsidy program for business and economic development. I’ve long been on record calling for the state to reform and improve this program, which cost the city and School District $119 million in forfeited taxes in 2017 alone. It’s a decades-old program that forgives most state and local taxes for businesses that enter into “underutilized” areas of the city and create new jobs. Over the years, the program has come under fire for failing to track job creation and for its approval in areas of the city whose underdeveloped status is questionable.
To its credit, the program has evolved, including setting minimal protections for the District by ensuring a payment based on 110 percent of the initial assessed land value. In 2016, I sponsored and City Council passed a law requiring KOZs to self-report and evaluate their efforts at job creation. However, these advances don’t tell us nearly enough about the cost and benefits of this program to our city and our schools.
As a result, I have typically voted against KOZ expansion in an effort to get both city and state agencies to refine and limit the program, and to encourage the city to set up other tax incentives that promote development without harming critically needed school funding.
Last week’s vote was a refreshing reminder of why we fought for a local school board. Throughout the process, the board pressed the city to better evaluate the costs and benefits of each recommended parcel. When the Finance & Facilities Committee was initially told that the city did not have an updated list of abated parcels in hand, they requested the full, completed list immediately, including a fiscal analysis, in order to have ample time to make their decision.
When the entire board convened, members asked questions about the extent of their powers, including the possibility of striking individual parcels off the list and specifically addressing a particular property in Fishtown. And they called upon the city to provide them with more information in the future and to do a better job in vetting properties.
In the final vote, two board members voted against the package. Though the KOZ resolution passed 6-2, the vote shouldn’t obscure the fact that we have made significant progress on our concerns.
As Board President Joyce Wilkerson stated in the committee meeting where the KOZs were reviewed: “We’re being asked to fund schools without money, and yet the city’s turning around and giving more abatements to large developers.” She also noted that many properties were in already highly developed areas.
For years, even in the midst of the District’s worst financial struggles, the School Reform Commission would often rubber-stamp KOZ and Tax Increment Financing (TIF) requests from the city, even as they debated whether the District could afford full-day kindergarten or support teacher raises. Occasional independent votes came from SRC Commissioners Joseph Dworetzky and Marjorie Neff, but very rarely would we see on public display the critical analysis and thoughtfulness we saw last week from the board. This is what school governance should look like.
As Council begins the fall session with a debate about the 10-year tax abatement, the public must maintain its vigilance over public dollars. Last week’s vote serves as a pressing reminder that economic development and generous tax subsidies matter more than ever for school funding.
Helen Gym is an at-large member of Philadelphia City Council.