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Answering questions on Harrisburg's budget mess

How did state lawmakers accomplish so little, aside from actually passing a budget, this budget season?

File photo: Pa. House working on the state budget in July 2012. (AP)
File photo: Pa. House working on the state budget in July 2012. (AP)Read more

LIKE THE PHILLY school kids they failed to aid, state lawmakers are headed for summer vacation.

But if you were to look at their report cards for this year, you would see one word over and over: incomplete.

The General Assembly is skipping town without passing bills to direct $45 million in federal money to the beleaguered Philly schools, to help the city crack down on tax deadbeats and to smooth the transition to a new property-tax system. As of now, the state hasn't even adopted a fiscal code for the year.

What's the source of all this inaction? It seems Harrisburg lawmakers just can't get along.

There were skirmishes pitting Republicans against Democrats, leadership against rank-and-file members, the House against the Senate, and Philadelphia against the rest of the state.

And in the end, they passed a low-profile state budget and punted on just about everything else.

There are still a lot of questions about what this all means for Philadelphia homeowners and school kids. Here are a few answers:

Q: Will those 3,800 laid-off school district employees get their jobs back?

A: As of now, it doesn't look good. The district has received only a fraction of the funding it says it needs to undo all the layoffs, the result of a $304 million annual deficit. But local officials say they are hopeful the state will provide more aid when it reconvenes in the fall - or in a special session before then.

Q: What happened to that $45 million from the feds?

A: The federal Department of Health and Human Services recently forgave the state of $45 million from a past debt. Corbett promised to send that money to Philly schools, but it's held up in an unrelated fight over the fiscal code. The House inserted a measure to legalize payday lending into the code, and the Senate said no way. Now, House leaders are debating whether they are legally required to pass the code before summer.

Q: What about that cigarette tax?

A: Mayor Nutter proposed a $2-per-pack tax on cigarettes to send $45 million to the schools next year, and City Council adopted it. But the measure requires state approval and failed to gain support in the House, where many Republicans have taken no-tax pledges.

Q: So did Harrisburg do anything for the school district?

A: Yes - they allowed Philadelphia to tax itself. The state permanently extended the city's temporary sales-tax hike, adopted in the recession and scheduled to end after this year. Under Corbett's plan, the district this year can borrow $50 million against future revenue from the extra 1 percent on the sales tax (the total rate is 8 percent) and collect the whole $130 million a year going forward. The state budget also included nearly $16 million more in direct funding for Philly schools, although the district was already counting on much of that money.

Q: What's going on with my property taxes?

A: The city this year will begin its new property-tax system, the Actual Value Initiative, which will mean higher taxes for many homeowners in gentrified areas. City officials wanted to soften the impact on longtime residents of those neighborhoods who are older and disadvantaged. But once again, the measure required state approval and hasn't gotten it. This time, the holdup is in the Senate, where lawmakers are waiting until the fall to consider a series of bills related to Philly property taxes. The other bills would help the city go after delinquent taxpayers.

Q: But I thought Mayor Nutter already said he was cracking down on tax deadbeats?

A: He did, but he needs help from the state. One of the bills held up by the Senate would let the city place liens on properties elsewhere in the state that are owned by people who owe Philly money. Senators from other counties want to change the bill to allow their local governments to do the same.