Property-tax hike will help bail out Philly schools

City Council is poised to raise property taxes nearly 4 percent as part of a package to deliver $53 million in new funding to the Philadelphia School District.

Council approved, in a committee vote Thursday night, the city's $3.5 billion 2011-12 budget after a wild day of negotiations that saw Mayor Nutter's sugary-drinks tax proposal fail for a second consecutive year, and the district receive slightly more than half the financial aid officials asked for.

Superintendent Arlene C. Ackerman said Council's action would enable the district to salvage several top priorities, with details to be negotiated with Council over the next week.

The budget is up for a final vote next Thursday.

At one point, Nutter thought he had a majority for his 2-cents-per-ounce tax on sweetened beverages, but that coalition evaporated within 20 minutes.

In its place arose the property-tax proposal, declared dead by Council President Anna C. Verna on Wednesday night and at various times Thursday. The measure would generate $37 million and increase a $2,000 property-tax bill by about $70.

Coupled with a $10 million appropriation that will reduce the city's fund balance, and $6 million from increasing the price of street parking in Center City and University City, Council's package would send $53 million annually to the district. The city currently raises $600 million for the district through the property tax.

At the end of the long day, which ended after 8:30 p.m., Ackerman said she was "happy, because we started off with zero this morning, and we leave with money." She vowed to work with Council and the mayor to figure out exactly where the funds will go.

"We just know there are four areas that were really important to them," Ackerman said of Council's wish list. Those are yellow bus transportation, some alternative schools, the reduced class size initiative and early childhood programs.

Ackerman had asked for $102 million as a way to save those and other priorities such as arts, music, school nurses and counselor positions.

A combination of expiring federal stimulus dollars and Gov. Corbett's cuts to school funding statewide helped open up a $629 million gap in the school district's 2011-2012 budget.

The School Reform Commission approved a budget in May, making cuts including more than 3,400 layoffs and elimination of many programs.

"We will continue to work with them to restore as many of those cuts as possible," said Ackerman. "Maybe not at the same level that we wanted, but some of them."

Councilwoman Blondell Reynolds Brown, a leading proponent for school funding at a higher level, said she feared arts and music programs are "on the cutting room floor." Brown voted for the bill.

Mayor Nutter declared the deal a victory.

"It's very, very clear that our city did take a stand for education today," he said.

Councilwoman Maria Quiñones Sánchez did not want to hear anyone say Council had shortchanged schools. "We would all be happy - this was a win for children, and I'm not going to let anyone couch it differently because it was not the win they wanted," said Sánchez, who voted for the measure.

The property-tax bill passed out of committee by an 11-6 vote.

In addition to Brown and Sánchez, also voting in favor the plan were Darrell L. Clarke, W. Wilson Goode Jr., Bill Green, William K. Greenlee, Curtis Jones Jr., Jack Kelly, James F. Kenney, Donna Reed Miller, and Marian B. Tasco.

Against were Jannie L. Blackwell, Frank DiCicco, Joan Krajewski, Brian O'Neill, Frank Rizzo, and Verna.

Over the course of the day, Council members became convinced - with the help of representatives of and lobbyists for the beverage industry and Teamsters who deliver their product - that the property tax was not susceptible to the kind of legal challenge that the beverage industry had promised.

Nutter's proposal for a 2-cents-per-ounce tax on soda would have doubled the price of a two-liter bottle. He hoped to raise up to $80 million annually for schools from the soda tax.

In 2010, the measure was touted as a way to cut consumption of sweetened drinks as a way to combat the city's obesity epidemic, particularly for children. This year, Nutter said the proposal was all about the money for schools.

"We're grateful to Council for doing the right thing," said Danny Grace, secretary-treasurer of Teamsters Local 830. "It was about keeping family-sustaining jobs within the city."

After Council voted, Nutter said he made calls to Harrisburg to let some key players, including State Sen. Vincent Hughes (D., Phila.), the Senate Minority Appropriations chairman, know what had happened.

Nutter had said that Council would have to offer some help to the district if the city was to hope a skeptical, Republican-led state legislature would restore any funding.

"Sen. Hughes was very excited and said this will help send the right signal to Harrisburg," Nutter said.

Goode said district officials had asked the city to simply increase the district's share of the existing property-tax pie just two days before the hearing.

That request was about equal to what Council ended up voting for on Wednesday, he said.

"So we actually gave what they requested," he said.

The afternoon and evening of negotiations followed testimony in the morning, when Council chambers Thursday morning was packed with beverage workers protesting the soda tax, students and parents urging politicians to focus on education, and others just simply wanting their voices heard.

During the three-hour public hearing, children chanted and sang in the fourth-floor hallway outside the council hearing. Nearly two dozen witnesses testified.

Inquirer staff writer Alia Conley contributed to this article.