Corbett dipped fingers into Council's till with school-rescue plan
Corbetts rescue plan for Philadelphia schools involves funding city lawmakers had wanted to help the underfunded pension.
PART OF GOV. Corbett's so-called rescue plan for the Philadelphia school district involves funding that city lawmakers had their eyes on to fix an equally vexing problem - the drastically underfunded pension.
Corbett's plan included funding earned through the extension of a 1 percent sales-tax increase, which had been set to expire in June, but city lawmakers say they had been considering the tax as a way to help the city from sinking under ever-increasing pension costs.
"I think the pension problem is as diffreicult and challenging as the school district problem is," Council President Darrell Clarke said Monday. "The pension problem in years would be equally, if not more challenging for the city of Philadelphia."
Clarke added that a working group of policy experts and state and local leaders agreed that an extension of the sales tax "is the most appropriate and aggressive way to deal with that [pension] problem."
In fiscal year 2014, the city projects it will dish out $668 million, or 17.6 percent of its $3.8 billion budget, for a pension fund that is less than 50 percent funded. The sales tax was raised from 7 percent to 8 percent in 2009 to help the city during the recession. It is projected to contribute $130 million to the pension fund in fiscal year 2014, but under Corbett's plan the following year, that contribution would drop to $8 million.
Corbett's plan also allows the school district to borrow $50 million against the extension of the sales tax, which would generate $120 million for schools annually. The state House approved the extension Monday night.
"It really locks our hands," said Councilwoman Maria Quinones-Sanchez.
City finance director Rob Dubow said the Nutter administration had no intention to extend the sales tax.
"We had a proposal we would have preferred was implemented," Dubow said. "Getting that funding for the district was essential, and if that's the way it's going to happen, then that's the way."
City Controller Alan Butkovitz said allocating sales-tax revenue would have been a serious way to address the pension fund, a sentiment echoed in a report released last month by the Center on Regional Politics. Mayor Nutter has also sought pension changes with the city's unions.
Meanwhile, state Sen. Anthony Williams plans to bring the $2-a-pack cigarette tax back from the dead in the fall. Williams said he will reintroduce the bill with the hope of getting it through the Republican-run Legislature, though its chances appear grim. The tax would provide $46 million to schools.
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