Too much property tax relief will put city schools at risk
A recent plan to balance rising property taxes with the impact on everyday Philadelphians would slash district revenues by tens of millions of dollars.
At the end of May, the school board passed a budget for the next school year that makes use of the one-time federal relief funds to ensure the highest level of support for students in more than a decade. Specifically, we committed to funding at a ratio of one teacher for every 12.3 students, and a total school-based staffing ratio of one staff member for every 6.57 students. Across district high schools, the average ratio of counselors is one for every 269 students. We have also committed funds to environmental projects, large capital projects, and the installation of over 800 more hydration stations.
We are concerned that all of this progress at our schools could be threatened by City Council’s new plan to provide property tax relief, meant to address the increase in property assessments. What the plan would do, however, is reduce the amount of revenue that goes to schools. We believe that the proposed property tax relief plan would not only preclude the district from offering more support for students but could also eviscerate staffing levels. Only recurring funding can ensure the sustained investment that results in the improvements we need to make.
With no taxing power of its own, the School District is dependent on the city and the commonwealth to provide recurring resources. We have continued to advocate and work through the courts for an adequate and equitable level of funding from the state, while also receiving modest increases in the basic education funding levels to at least try and keep pace with rising costs. But sadly, this is not enough. Our children deserve more and should not have to pay for decades of divestment.
“Our children deserve more and should not have to pay for decades of divestment.”
On the local side, the primary funding mechanism for schools is the School District’s share of the real estate tax, which constitutes 28% of all district revenues. One of the benefits of depending on real estate taxes is that over time, this tax base is reliable, recurring, and experiences natural growth as property values increase. In Philadelphia, however, the city and City Council have frozen assessments for the last three years. By ignoring this natural growth, we estimate that the city has reduced projected School District revenues over this period by over $150 million. Unsurprisingly, this “hold harmless” approach caught up with the city when four years of real estate growth resulted in assessment increases of over 20%. Based on analysis provided by the city, the result of the assessment change is projected to be an increase of nearly $130 million in revenues for the district next year.
The mayor has proposed a series of taxpayer mitigation efforts that would cut the School District revenues significantly — when accounting for these proposals, the city Revenue Department projected that the School District would receive an additional $94 million next year, and a total of $390 million over the district’s five-year plan. Though it is not the entire amount that should naturally accrue to the district, this increase in recurring funding might allow the district to at least sustain the level of investment jump-started by the federal relief funds.
We understand that City Council must balance the interests of rising property taxes with the impact on everyday Philadelphians. However, based on the Revenue Department analysis, under the currently proposed City Council plan, nearly 64% of the natural growth in revenues that should have gone to schools will remain with taxpayers. If adopted, this plan would slash district revenues by tens of millions of dollars more than what the mayor is proposing, just accounting for the Homestead Exemption and Longtime Owner Occupants Program (LOOP) proposals.
Though the mayor’s proposal did reduce needed funding, it at least attempted to fairly balance the impact on taxpayers and the needs of our schoolchildren. The new City Council proposal shifts the burden substantially onto the backs of schoolchildren — on top of the three years of tax freezes that had already reduced funding. A vote for this new package will force reductions in the support we provide for Philadelphia’s children. A vote for this proposal is a vote to defund public education in Philadelphia.
Joyce S. Wilkerson is the president of the School District of Philadelphia Board of Education. William R. Hite Jr. is the superintendent of the School District of Philadelphia.