The early returns are in – at least from the education sector and a preeminent business organization – regarding the Fiscal Year 2015 Budget Address delivered on Thursday by Mayor Michael Nutter before City Council. It appears as if Nutter could enjoy a rare political triple play: pleasing educators and the business community, all while producing a budget that doesn’t raise taxes.
“Two weeks ago, when [School District of Philadelphia Superintendent] Dr. Hite announced that the District would need an additional $320 million for Action Plan 2.0, I said that I support his broad request for additional funds and that I would do whatever I could within our budget constraints to ensure the District had the additional funding they needed from us,” Nutter said during his address. “Specifically, the District has now made a request for $75 million in recurring annual funding from the City to support District-managed and charter schools. To meet the funding request, I am again calling on the General Assembly to authorize the $2 per-pack cigarette tax, as already approved by this City Council.
“In its first year, the cigarette tax would generate $83 million in education funding assuming a July 1, 2014 start date, and even in the out years of the tax, when smoking rates more than likely will decrease, which is a very good thing for the health and wellness of our citizens, it will still provide more than $70 million of dependable, annual education funding,” Nutter added. “All it requires is the General Assembly simply to pass authorizing legislation, which I will continue to push for in Harrisburg.”
Hite said he was thankful Nutter is supportive of the district and vowed to do all he can to find sustainable funding. The superintendent reiterated the district has already factored in the revenue from the extended Sales Tax.
“We are pleased with the additional revenue that Mayor Nutter has included in the City of Philadelphia’s budget for fiscal year 2015,” Hite said. “Our request for $75 million in recurring revenues, starting next fiscal year, is in addition to the anticipated $120 million in recurring revenues from the 1 percent sales tax increase. The Action Plan v2.0 financial supplement released last month detailed The School District of Philadelphia’s need for a $320 million investment in making all schools great. We are hopeful that our funding partners will join us in devoting the resources needed to provide our students with the education they deserve, and our schools and staff with the support they require.”
Officials with youth education advocacy group Public Citizens for Children and Youth generally agreed with the funding formula Nutter referred to in his budget, but voiced a sense of resignation that Nutter’s plan requires movement and a vote from the state General Assembly.
“We thank the Mayor and City Council for their hard work to successfully increase taxes for our schools over the last few years. Unfortunately, to meet the District’s basic budget request, the entire amount of funds requested by the Mayor for the schools — $143 million, requires action by the State Legislature. As such this proposal puts our school children at risk,” said PCCY Executive Director Donna Cooper, adding that PCCY “strongly” urges the Nutter and City Council to use the powers the State Legislature has already granted to the City and shift the full $120 million from the existing sales tax collections to the school district on a recurring basis. “We support the Mayor’s call that the state pass an increase in the local cigarette tax rate and dedicate the first $75 million of those funds to the District to meet the Superintendent’s budget request for the next school year. However, we have serious reservations about a City plan to meet the District’s funding request for local funds that relies on any action in Harrisburg. We believe that a more realistic and prudent approach would be to find the funds in the current budget or enact revenue increases that do not require state approval so that the District can be assured of the minimal funds needed to open the doors next year.”
Like the education sector, the business community seems to be backing Nutter’s budgetary proposals. During his address, Nutter alluded to the business initiatives spearheaded by the Administration that helped rescue Philadelphia from the debilitating recession.
“Working together, we’ve lowered wage and business taxes, bringing the resident wage tax below 4 percent for the first time since the 1970s and we will continue to work together to lower the wage and business taxes, while providing a range of exemptions and incentives to make Philadelphia a more attractive place for businesses to start here, stay here and grow here,” Nutter said. “Working together, our Administration with Council’s active support has increased diversity in city business participation. We have consistently surpassed our goal with regard to the percentage of city contracts with minority, women and disabled-owned contractors. In 2013, we reached 28 percent participation, encouraging us to raise our participation target to 30 percent for FY15.
“I also want to point out that our strong fiscal management, our careful financial stewardship, our ability to work together and make tough budget decisions, is the reason Standard & Poor’s gave Philadelphia its highest rating ever with an “A+” municipal credit rating,” Nutter continued. “And for the first time since the 1970s, all three major rating agencies placed us in the “A” category.”
Greater Philadelphia Chamber of Commerce President and CEO Rob Wonderling said the Chamber was supportive of Nutter’s initiatives, and that the chamber will closely monitor budget hearings this spring in Council.
“The Chamber of Commerce supports Mayor Nutter’s call for budget policies that encourage growth and make Philadelphia an attractive place to do business. The continued plan to reduce our wage and business privilege taxes is a positive signal to businesses in our city,” Wonderling said. “It is a good starting point, and we look forward to working with the Nutter Administration and City Council to ensure a fiscally responsible budget for Philadelphia’s citizens and businesses.”
Philadelphia Tribune – March 9, 2014 – Read article online