One of the biggest differences between Mayor Nutter's school funding plan and City Council's plan is who would control the money.
As my colleague, Julia Terruso reported in today's Inquirer, City Council offered a plan Thursday to increase three different taxes - property tax, parking and Use & Occupancy – for an estimated revenue total of $70 million. (The school district asked the city for $103 million).
Nutter previously proposed increasing property taxes by 9.3 percent for a total new revenue of $105 million.
The obvious difference: Nutter's single source of funding vs. Council's multiple sources.
But there is more to that.
Council's pledge is to turn over that extra $70 million in tax revenue to the school district. But not all of that money will be a dedicated funding stream for schools.
The only money that goes directly to the schools is 55 percent of property taxes (the other 45 percent goes to the city's general fund) and U&O taxes. That's $35 million combined ($25 million from new school portion of the property tax increase and $10 million in U&O) in recurring new revenue. The other $35 million in new revenue is controlled by the city ($25 million in city taxes; $10 million in parking).
State law mandates that the city can't give less money to the school district than the previous year. So, the city will still have to fund the district at the same level it will fund it this upcoming fiscal year.
If Council's plan is adopted, a $35 million chunk will already be directed to the schools through school property tax and U&O tax increase. But the city is under no obligation to continue giving the new tax money (parking and higher city rate) to the schools going forward. It could decide to have a soda tax or plastic bag tax to fund the other $35 million.
"Giving the schools funding from the City's portion gives us flexibility to find different sources in future," City Council spokeswoman Jane Roh said. "In other words, we get to increase [Real Estate] funding for the schools without being held to a new school side rate."
Nutter's property tax increase proposal was just on the school side. So, his proposal would shift the taxing ratio from 55/45 for school and city to 59/41.
The mayor's school property tax increase plan was the only solution the mayor could find to provide "stable and recurring," revenue to the district, Nutter spokesman Mark McDonald said Friday. McDonald added that the administration hopes Council will come to the same conclusion.
However, most Council members have said they would not be for a 9.3 percent property tax increase.
Council has two weeks left to finalize how to fund the schools and who will control the extra money going forward.
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