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New property, soda taxes to fund cash-strapped schools?

With time running out to raise about $100 million for city schools, Mayor Nutter proposed in private meetings Wednesday to raise property taxes, resurrect the long-dead soda tax and increase prices at parking meters and kiosks.

With time running out to raise about $100 million for city schools, Mayor Nutter proposed in private meetings Wednesday to raise property taxes, resurrect the long-dead soda tax and increase prices at parking meters and kiosks.

Council members, who largely were opposed to raising taxes last week when School District officials first asked for $75 to $110 million in city money, were just as cool Wednesday to Nutter's specific plans.

A property tax increase, several members noted, would come on the heels of last year's 10 percent increase - and that hike, while unpopular, was a compromise after they shot down Nutter's previous attempt to create a soda tax.

Nutter acknowledged that he had "a lot of work to do" to convince at least nine Council members to pass whatever combination the administration ultimately endorsed - and just two weeks until the scheduled summer recess.

"We have a very limited time frame here," the mayor said. "But there is enough time to accomplish these very important goals . . . What it requires is leadership, political will and the committment to get things done."

Nutter and School District officials, facing a $629 million budget gap, have described terrible consequences if the money isn't raised.

District officials have said they would be forced to make cuts to full-day kindergarten, transportation services, alternative schools and to increase class sizes.

Some critics on Council have questioned whether the district has adequately trimmed the fat from its budget, or eliminated programs less effective than full-day kindergarten.

They have described the district's targeting of such essential services for cuts as a kind of blackmail.

"They're fearmongering," said Councilman Bill Green. "Until they stop engaging in that kind of behavior, I see no reason to be supportive of their efforts."

The district's cash request also comes on the heels of questions about its financial stewardship - city Controller Alan Butkovitz called for more oversight and auditing power Wednesday after finding what he called "serious financial errors" in the district's books.

"It's pretty dire here. This is a very tough situation," said Minority Leader Brian O'Neill. "I don't think anybody has any confidence in the School District's budgeting and finance, their accountability."

Nutter met in the morning with about a dozen education advocates, presenting his plans and asking for their support. He then met with Council Leadership in President Anna C. Verna's office.

"I didn't see anybody smiling in that room," Minority Whip Frank Rizzo said after the meeting.

Nutter emerged about noon and said he hoped to reach an agreement with Council members before today's 10 a.m. Council meeting.

"In our world that's a long time from now," he said.

There was no word Wednesday night on any possible deal.

Several of the education advocates, including Philadelphia NAACP President J. Whyatt Mondesire, said they would back the mayor.

"If we don't stand with this mayor and push some kind of legislative package through Council in the next several days, the consequences will be dire," Mondesire said.

Debra Weiner, with Public Citizens for Children and Youth, said Nutter told her a property tax increase that would raise $100 million would cost the average taxpayer $120 a year.

"Ten dollars a month, maybe $2.50 a week, that's like a movie ticket and a coke," she said. "I think that's affordable to sustain the momentum the schools have demonstrated in the last eight years."

Weiner said she expected the advocates to mobilize a huge swell of supporters for the mayor's proposals.

"I think council members are going to be swamped with phone calls and requests for meetings," she said. "I think there is a lot of support for the notion that money matters" in public education.

While the numbers are subject to negotiation, Council members described the mayor's current package as including:

- A ten percent property tax increase. Property taxes are divided between the city and the schools. The hike would be accomplished by raising the school's share.

Last year's 10 percent increase was done solely on the city's portion.

- A two cents per ounce tax on sugary beverages, the same as Nutter proposed in 2010. Council killed the soda tax last year amidst opposition from the soda industry, store owners and Teamsters.

Councilman William K. Greenlee said he was concerned about whether the soda tax could be legally enforced.

"We'll get ourselves in trouble if we rely on that," he said. "I think certainly the soda people will go to court right away . . . I think that will be a real problem."

- An increase in prices at city parking meters and kiosks that would raise about $6 million a year. The price hikes could be concentrated in high-traffic zones like Center City and University City.

Nutter might be able to make this move administratively, with the cooperation of the Philadelphia Parking Authority.

If the city increases its funding of the schools, the city must provide that money every year. That notion has troubled several Council members who have complained that the district is controlled by the state and doesn't have to answer to Council.

Nutter acknowledged that the city cannot obligate the district to spend money on his priorities, like full-day kindergarten.

But he said any additional city funding would come with more accountability and a "closer relationship" between city and schools - possibly through a memorandum of understanding or directive from the School Reform Commission.

He said it would be easy to determine if the district wasn't upholding its end of the bargain.

"Some of these are pretty obvious," Nutter said. "You either have full-day kindergarten or you don't. You'll know by day two."

Council members said Nutter again voiced his opposition Wednesday to shifting the millage rate, which determines how real estate taxes are divided between the city and the schools.

Shifting the millage would have no impact on taxpayers, but would take money from the city and require cuts from the municipal budget.

While Nutter has ruled out a millage shift, several Council members said the idea would remain on the table during discussions with the administration.

Several members also noted that the June 16 summer recess is an "arbitrary deadline," and they can agree to continue working. Council also has yet to pass the municipal budget and must do so before June 30 or the city won't be able to spend money.

The School District passed a budget on Tuesday, but can add any additional city and state funds later.

Nutter and his allies in Harrisburg have said the state would be more likely to restore some school funding if the city acted first. The state's deadline is June 30, but officials anticipate passing a budget early.

"There's a high-stakes poker game going on with the school, with the city and with Harrisburg," said Councilman Curtis Jones Jr. "At the end of the day, we don't want the kids to be the casualty."

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