Mayor Kenney gave his annual budget address in front of City Council Thursday.
But really, he delivered it almost exactly four months ago when he announced that he was moving toward taking back local control of Philadelphia’s schools. With that move, he also committed to fixing the School District’s deficit and giving public schools some fiscal stability — to the tune of $100 million a year, or $1 billion over five years.
Thursday’s address was the plan for how to pay for that … as well as for a few other things a city of this size needs; like more police, fire protection, and infrastructure improvements.
The money will come from city residents, primarily in the form of a 6 percent hike in the property tax. In addition, annual cuts in the wage tax rate will be slowed and the real estate transfer tax will increase from 4.1 percent to 4.45 percent.
Local control of the schools represents a turning point for the city, after 16 years under state control. At the point the state took the schools over, they were broken and their finances were in shambles. State control was transformative, but not necessarily positively. The state put many obstacles in the schools’ path, such as funding cuts and policies like accelerated charter growth without accompanying financial support.
That led to a mindset of helplessness and frustration for many Philadelphians — not only those with school-age children, but anyone who cared about the educational shortchanging of a few generations of children.
Kenney’s move to take back local control pulled the plug on that mindset. He said “these are our children, and we’re responsible.”
No one should be surprised that a property tax increase would have to be part of the solution.
But in many ways, the city’s taxing practices also led to a mindset of helplessness and frustration. The property tax system was so broken and corrupt that until Actual Value Initiative was implemented in 2013, property tax bills might well have been composed by throwing darts at a dartboard. AVI made the system more honest, and more predictable. It led to a reassessment — the first since 1989 — and higher tax bills for some. But often, they were increases on taxes that had been artificially low. The 6 percent hike proposed by Kenney will mean about $95 a year for the average home worth $113,000.
Obviously, the proof is in performance: These hikes must lead to better schools. Under Superintendent William Hite, progress is being made in reading scores and graduation rates. But real obstacles remain, such as pension and other benefits costs, and the state’s insistence on increasing charter schools without offsetting their costs to the city. The state must also move toward a fairer school funding formula.
The mayor’s plan is not a slam dunk; it must get debated by City Council. And there are those on Council with other ideas for raising money; such as eliminating the 10-year tax abatement and accelerating tax collection. But these ideas have to work in concert.
This will be an important debate, but not a new one. Kenney is now making the connection between property taxes and better schools … like they do in the Philadelphia suburbs and almost everywhere else on the planet.