Hope, skepticism on school budget deal

A day after Gov. Corbett detailed a $140 million package for Philadelphia schools, elected officials, labor leaders and others agreed that the proposal would help bridge the cash-strapped district's $304 million shortfall.

But they pointed out that the state would kick in little new money under the plan and said they feared that even this fragile deal would provide too little for the district to rehire the 3,859 employees who were laid off Monday.

Mayor Nutter told reporters Monday he was still focused on meeting the School District's request for $60 million in additional money from the city and $120 million from the state. Fund-raising is falling way short on both fronts.

But City Controller Alan Butkovitz said that with additional concessions from the teachers' union, the package should put enough money on the table "to avert a disaster this year."

Spokesman Fernando Gallard said the district was grateful for the help from city and state officials and supported the legislative approval of the package.

"In the days and weeks ahead, we will continue to work with our partners at the state and city, as well as our employees, to secure the revenues and necessary savings needed to provide Philadelphia students with a safe, high-quality education while managing our finances responsibly," Gallard said.

But Robert McGrogan, head of the Commonwealth Association of School Administrators, which represents principals and the 127 assistant principals who were laid off, was skeptical that the proposed deal would bring in substantial new money. "A lot of it seems to be money that the district was already counting on," he said.

"We're really dealing with a lot of pie-in-the-sky type numbers," McGrogan said. "It's not like the money's in the account and you can start spending it."

In fact, while Corbett signed the state's $28.4 billion budget late Sunday, components of his plan require legislative approval.

The Corbett package includes a projected $30 million from improved city tax collections, $15.7 million in additional basic-education funds, and a $45 million one-time infusion of additional state aid.

The governor also backs extension of Philadelphia's extra 1 percent sales tax, which was set to expire next June. An extension would let the city borrow $50 million against future collections of that tax. Starting next July, the extended tax also would generate $120 million a year for the district.

The state House approved the $45 million in aid and the extension of the 1 percent sales tax Monday night. Those items still need Senate action, expected Wednesday.

Because the $14.3 million in additional basic education funds was included in the governor's budget months ago, the district had counted it when calculating the $304 million funding gap.

As a result, only $1.4 million of the basic-education proposal and the $45 million one-time grant would be new state money.

The grant stems from a long-standing $140 million debt the state owes the U.S. Department of Health and Human Services for over-payment of federal funds for adoption and foster care.

After lengthy negotiations, the federal government last week agreed to forgive the interest and penalties. The Corbett administration has pledged to give the money to the city for the schools - provided the district implements reforms and obtains union concessions for "fiscal stability, educational improvement, and operational controls."

"My sense is that the state needed to do more," said Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, a left-leaning think tank in Harrisburg. "No one should be congratulating themselves when it comes to education funding."

She added, "What you have is kind of band aid over a deep systemic problem, particularly for Philadelphia."

Jill Scott, a parent who has a son beginning second grade at E.M. Stanton Elementary School at 17th and Christian Streets, was disheartened. "It looks as though the state is not helping us much at all," said Scott, a therapist. "It doesn't seem like we're getting anywhere near what we need."

David L. Cohen, a Comcast Corp. executive who served as chief of staff to then-Mayor Ed Rendell in the 1990s and has supported Corbett, was involved in the negotiations for the district's rescue package.

He said no one involved with the deal was happy about every element of it. And Cohen said those who said the state was providing less than a third of the deal were correct.

"But from my perspective, when you're in a financial crisis that the school district is in and can figure out how to bridge the gap for this year and the foreseeable future, that's a price worth paying," Cohen said.

"Where the money comes from is not as big of a concern as the fact that we're getting the money that's needed," said Jerry Jordan, president of the Philadelphia Federation of Teachers, whose union is being asked to make concessions. "Considering we had nothing, every dollar that we're able to get from the state and the city is going to help to restore programs for kids and the school system."

Council President Darrell L. Clarke said, "It appears that the governor, based on the action he took, understands there needs to be something done for Philadelphia schools. Beyond that, it's difficult to say because it's still an evolving situation up in Harrisburg."

Cohen said the plan for borrowing $50 million against future collections of the 1 cent sales tax extension was developed to replace $46 million the city had been counting on from a new $2-a-pack tax on the city's cigarette sales.

That plan, which requires legislative approval, has gone nowhere.

Clarke continues to hope a cigarette tax "will be a part of the ultimate outcome," and he says he will keep pushing "until the last puff."

Nutter has not given up on a cigarette tax, either.

"Everything is very fluid now," Nutter said. "But I am still hopeful, whether it's now or sometime into the future."

The proposed cigarette tax got last-minute brickbats, however, from Americans for Tax Reform, the powerful tax protest group led by Grover Norquist. Late last week he sent a letter to all members of the state House and Senate, opposing authorization of the local tobacco tax increase and saying it would violate the "Taxpayer Protection Pledge" that the group asks elected officials of all stripes to sign.

"Philadelphia's chronic fiscal mismanagement has led to calls for one tax increase after another, in order to patch budget holes created by overspending," Norquist wrote. "The state legislature should certainly not assist in raising taxes on behalf of local lawmakers."