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Kenney pitches tax hikes to fund schools in budget address

Philly mayor talks soda tax, schools and public safety in annual budget address.
Mayor Jim Kenney (Charles Mostoller)

Mayor Jim Kenney staunchly defended his prize soda tax despite shortfalls in revenue projections while simultaneously calling for increased property taxes in his budget address for fiscal year 2019 to help fund education in Philadelphia. 

A proposed hike of 6 percent to property taxes, an 8.5 percent increase to real estate tax and slowing the process of cutting the wage tax were among Kenney’s ideas to help fund Philly’s school system, along with the city giving an additional $100 million to schools. 

“The [School] District’s forecast is grim: a $900 million deficit projected by the year 2023,” Kenney said during his budget address Thursday at the Philadelphia City Council. “As we return to local control of schools, we must provide the financial stability the District needs so our students and schools can continue building on the real progress they’ve made in recent years.”

Kenney asserted that the property tax hike would only mean $95 extra a year for the “average residential property,” or $70 if the property is enrolled in the homestead exemption program. And the city has pursued delinquent taxes strongly, saying 9,000 delinquent properties were brought into compliance, and about 31 percent of delinquent taxes were paid from 2013 to 2017. But that doesn’t mean his $4.7 billion proposal will be an easy sell with any tax hikes included.

“Council has a fiduciary obligation to examine the revenue assumptions built into this proposal, and to ensure continued stability and fairness for taxpayers,” City Council President Darrell Clarke said in a statement, noting that he introduced legislation Thursday to preserve the currently existing wage-tax reduction schedule. “We know from a prior election that Philadelphians overwhelmingly support local control. Now we must do the difficult work of building consensus on how best to help the District resolve a massive structural deficit not of local government’s making.” 

Sheila Armstrong, a member of the Our City Our Schools coalition, said in a statement that she believes a property tax discussion should come after the city reconsiders the tax abatement policy and potentially hikes taxes on local nonprofits and universities.

“There can be no property tax that hits low-income and working Philadelphians when the wealthy of our city — corporations, developers and universities — have yet to pay their fair share to our schools,” Armstrong said in a statement. “Increasing property taxes, while allowing the 10-year tax abatement program to continue for example, is simply unjust."

Meanwhile, Kenney shrugged off criticisms that the $79 million Philly made off the soda tax in 2017, short of the projected $92 million, was a “failure.” 

“I suppose when you can spend $15 million over two years just for lobbying, or when you can pay a single CEO nearly $30 million a year, then maybe $79 million seems like chump change,” Kenney said, noting that the tax has already paid for pre-K for 2,700 3- and 4-year-olds, most of whom live below the poverty line, and supported 11 community schools with 6,500 students. 

Budget highlights

Kenney’s other spending priorities:

-$100 million to the Police Department to get the city a total of 6,525 cops 

-$54 million to the Fire Department to get bring staffing levels to 2,661, including firefighters, paramedics and other staff 

-$60 million over five years to re-engineer dangerous locations, obtain “traffic calming” and expand bike lanes as part of Vision Zero, a plan for zero pedestrian deaths by 2030.

-$2 million more a year for Licenses & Inspections to help demolish 650 unsafe buildings

-Purchasing new sanitation compactors

Read Mayor Kenney’s budget proposals online at phila.gov.