A City Council bill that would provide $50 million to the ailing School District of Philadelphia through the purchase and resale of shuttered school properties unanimously passed a committee hearing Thursday despite opposition from members of Mayor Michael Nutter's administration.
Under the proposal, brought forth in August by Council President Darrell Clarke, the city would purchase from the school district 24 vacant properties in exchange for $50 million from the city's general fund, then sell the properties to recoup the costs.
The administration wants to instead borrow the funds for schools against a 1 percent city sales tax hike originally set to expire in June.
State legislators have already greenlit that plan, but Council hasn't yet passed the extension because Clarke wants to split the revenue between schools and the municipal pension fund, which would require additional authorization from Harrisburg.
"For that reason, the administration believes it is important to enact legislation local to extend the sales tax," Finance Director Rob Dubow said, noting the extension is "the only option that gets stable funding to the District without requiring any further action by the state legislature."
Dubow said the city would continue to advocate in Harrisburg for changes in the sales tax revenue distribution, as well as to enact a $2-per-pack cigarette tax, which was approved by City Council in June but subsequently stalled in the Republican dominated state House of Representatives.
Dubow emphasized the administration "did not advocate for the funding plan enacted in Harrisburg" but that it's the only option that "provides stable recurring funding to the District without having any negative impact on the city's general fund."
"I don't think there's another recurring source of revenue that we could get to the District that would replace if we don't get either the cigarette tax or the sales tax," Dubow said when pressed about the administration's "Plan C" in light of City Council's reluctance to pass the sales tax and Harrisburg's reluctance to authorize the tobacco tax.
"I think then the District is facing a lower level of revenue if neither one of those things comes through and then you have a district that doesn't provide the level of education we need."
Councilman Brian O'Neill blasted the administration for accepting the funding plan brought forth by Harrisburg lawmakers in the first place and leaving city legislators – and taxpayers – holding the bag when it comes to scrounging up more dollars for Philadelphia's state-run schools.
"It is unheard of – I don't think there's an example that's ever occurred in the United States where a state responsible for a state system passed an extension for a local tax to fill in their portion of responsible funding," he said, adding if the city were to raise taxes, it should be to cover an overwhelming local problem like pension liability.
"If we pass what our administration and our city has agreed to that way, we are just becoming part of the 'okay,'" O'Neill continued.
"It's not a question of how do we fill in the rest of the money, it's a question of how the state fills in the rest of the money, because that's their responsibility."