Mayoral Q&A: Schools, Part 1: Financing
Philadelphia voters will go to the polls to select the major-party candidates for mayor May 19. With that in mind, the Inquirer Editorial Board posed seven questions on the issues that will face the city’s next mayor. Responses from candidates — except for Milton Street, whose campaign did not respond to invitations to participate — will be published daily through Friday, with the final one next Sunday.
Schools, Part 1: Financing
What measures would you support to increase the city's share of funding for its School District? Mayor Nutter's real estate tax increase? Payment in lieu of taxes from currently exempt nonprofit education and health-care institutions? Others?
Click on each candidate to see what they have to say.
Tap on each candidate to see what they have to say.
“Pennsylvania’s disparity is the most extreme in the nation — by far — and it is not only a disturbing anomaly, it is shameful. “Separate but equal” is not equal.
“On day one as mayor, I will appoint a committee of stakeholders to address business-tax reform with a mandate to deliver a fair and rational tax-reform package for our city to: Fund our schools and retain, grow, and attract employers that provide well-paying jobs.
I do not support Mayor Nutter’s real estate tax increase. It would impose an unfair burden on our residents, which would, however, be lessened in the event that Gov. Wolf’s proposal to return $88 million to Philadelphia to reduce property taxes is approved by the legislature.
Regardless of whether City Council passes the mayor’s proposed property-tax increase, a secure and recurring source of local revenue is critical to public schools. Council’s decision to put off consideration of school funding until after the primary is regrettable, since this is an urgent need. It is time Council steps up and does its part to fund the schools. Everything must be on the table.
In any event, I will fight to make sure Philadelphia gets its fair share of education dollars from the state and will take Harrisburg to federal court if necessary. I support the current litigation to redress the terrible disparity based on Pennsylvania’s school-funding system, which perpetuates poverty in Philadelphia and throughout the commonwealth. Pennsylvania’s disparity is the most extreme in the nation — by far — and it is not only a disturbing anomaly, it is shameful. “Separate but equal” is not equal.
Additionally, the Education Improvement Tax Credit Program is used effectively to fund nonpublic and other schools with contributions from companies receiving credits against state taxes. I would lobby Harrisburg to broaden the law to permit companies to earn tax credits for contributions to public schools in Philadelphia.”
“I do not support the mayor’s plan to increase the property-tax rate again, and I have four ways to increase city revenue for schools.
“Since 2009, Philadelphia raised the sales, property, and cigarette taxes that provided nearly $400 million in local revenue to the School District. I do not support the mayor’s plan to increase the property-tax rate again, and I have four ways to increase city revenue for schools.
First, I will accelerate efforts to collect delinquent property taxes, that in turn will go directly to the School District, by effectively using outside counsel. In the first four months of 2014, the city collected more than $45 million in delinquent property taxes, and cut the number of tax-delinquent properties by about 30,000 — a 25 percent reduction. Per law, the city can collect 100 percent of delinquent taxes by using outside counsel. By shifting more accounts to such counsel, the city can use its limited resources to focus on selling properties on behalf of the Land Bank, which will lead to increased property-tax revenue for schools. The city can also focus on strengthening existing tax collection to deter new delinquent accounts, and increase School District revenue immediately.
Second, I will convene the largest tax-exempt landholders in Philadelphia to quantify their current financial and nonfinancial contributions to the School District vs. what their tax burden would be. Using these data, we can push for a fair but necessary multiyear plan to begin “payments and services in lieu of taxes.” As mayor, I will insist that these institutions partner with the city agencies and the School District to identify reasonable ways to give every child access to an equal educational opportunity.
Third, I will partner with City Council to unlock the value of city-owned assets like PGW and the airport through public-private partnerships and joint ventures that create dedicated revenue streams to reduce pension obligations. This will free up general fund dollars for public education in a sustainable way.
Finally, I will work with Council to increase the share of local property taxes for schools. Currently, 55 percent is allocated to schools. I will propose increasing it to 60 percent, which would garner between $60 million and $75 million in annual revenue.”
“With approximately 200,000 students in the district, the average cost to educate a student is $12,500 per year. Only $6,000 per year, however, is spent on each student. Where is the rest going?
“Many will ask, How do we pay for a quality education? Here is the current reality: The School District spends roughly $129 million to operate 19 consistently underperforming schools.
With approximately 200,000 students in the district, the average cost to educate a student is $12,500 per year. Only $6,000 per year, however, is spent on each student. Where is the rest going? It is being taken from students to manage the city’s noneducation-related financial challenges.
The city is in a difficult position given that the commonwealth holds the purse strings and that non-Philadelphians resent having their tax dollars directed at underperforming Philadelphia schools. Worse yet, they don’t believe that any money that might be appropriated would make it to the classroom. In this climate, we can’t count on funding from the state. Even as we continue to push for a fair funding formula out of Harrisburg, Philadelphia may need to make tough funding decisions to educate our children.
As mayor, I will consider all options for increasing funding for our Philadelphia schools, including modifying the tax-abatement program, increasing property taxes, looking to collect the city’s delinquent taxes, and possibly selling city assets that would alleviate some of the city’s pension challenges and in turn free up more funding for schools. I will give preference to those options that do not require the sale of a city asset or increasing taxes for our working families.”
“If we want our city to thrive and grow in the years ahead, and if we want our children to have the opportunities in life they’re entitled to, we need to actually raise enough money to accomplish those goals.
“I have my own comprehensive plan for school funding on my website, NelsonDiazforMayor.com.
In addition to increased state aid — which I’ll sue to collect if the state doesn’t include it in the budget — I include seven new local, recurring revenue streams. I would change our tax structure to shift the burden on commercial real estate, put our pension system on sounder financial footing, get mega nonprofits to pay their fair share, amend the tax-abatement process, collect delinquent taxes, expand business hours in Center City, and expand partnerships with community providers. Together, these changes would create $315 million in new immediate revenue and $650 million in new long-term revenue.
Obviously, I don’t expect everybody in Philadelphia to agree with me on each of these issues. But my plan actually raises the money our schools say they need to provide a world-class education — unlike those of every other candidate in this race — and doesn’t rely on amorphous savings from other departments that will likely mean service cuts in reality.
If we want our city to thrive and grow in the years ahead, and if we want our children to have the opportunities in life they’re entitled to, we need to actually raise enough money to accomplish those goals. Instead, in recent years our elected leaders have been content to slap Band-Aids on what amounts to a broken leg.
Our School District is deep in the hole, and any plan big enough to solve the issues facing Philadelphia is going to be similarly big. Fixing this endemic and recurring problem is going to be my absolute top priority as mayor because it impacts every other issue, from jobs to crime.
I’m going to succeed in turning our schools around, and if I don’t, you should vote me out in four years.”