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The Age of Austerity

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Arlene Ackerman.jpgWhenever Michael Nutter begins talking about leadership you should duck.  It means he is about to increase taxes.

He did it when the city was in the midst of the recession.  Nutter said tough times called for tough decisions and leadership.  And up went the sales tax, real estate taxes and a variety of other taxes and fees.

Now, it is the school district that is in trouble, to the tune of a $629 million deficit. Superintendent Arlene Ackerman went before City Council on Tuesday and finally made her ask:  to help fill the hole, the district wants $110 million more from the city.

Council members bit their lips over that one; some gnashed their teeth. But the mayor was resolute.

"This is not a time for political posturing," he said. "This is a time for political leadership."

Uh oh. 

What is the price of leadership?  Well, if the mayor wanted to raise that $110 million solely by increasing real estate taxes and giving all the additional money to the district he would have to raise property tax bills by 10 percent. (This is on top of the "temporary"  9.9 percent increase of last year.)

My bet is that Council will pass a 10 percent increase and, on top of that, make that "temporary" 9.9 percent increase permanent.  All the mayor needs is nine votes and there are six Council members who are retiring -- and immune to any voter anger over raising real estate taxes by 20 percent or more over two years.

By the way, once the city gives more money to the district, it will have to match it in all subsequent years.  The state law that enabled the take over of the district also says that once the city increases aid to the district, it cannot reduce it. 

Before Council on Tuesday, Ackerman turned on the charm -- or what passes for charm with her -- to make her case for more money.

"You're asking us to make difficult decisions, and we're making them," the Inquirer reported her saying. "You can agree with us or disagree.  We're asking you for help."

There is a school of thought that the district is trying to strong-arm the city by playing the time-honored game of "Kill the Kitty" by targeting popular programs for the deepest cuts.  Full-day kindergarten to name one.  Transportation to name another.

If you don't give us the money, we are going to kill this little kitty! No more full-day kindergarten and kids will have to walk to school -- preferably barefoot, through the snow!

Kill the Kitty.jpgThose tactics aside, no one is denying that the  $629-million hole in the district's budget isn't real. It is the product of forces that are Newtonian  (Isaac, not Wayne).

One is: What goes up must come down.

State aid to the district has been increasing for a decade, thanks mostly to Gov. Sugar Daddy.  Strike that. I meant Gov. Rendell. Now comes a Republican governor who has pledged no new taxes so he has taken a whack at the money the state spends for basic and higher ed.  The result: state aid to the district is declining by $292 million.

(Lest we forget, the state is still the primary funder of public education in Philadelphia -- to tune of close to $1.4 billion out of a total proposed district budget of $2.8 billion.)

On the larger scale, Philadelphia is going through what other districts in the state are also going through today: losing state aid and making tough decisions about how to fill the gap left by the state's retreat..

Which leads to another Newton law: For every action there is an equal and opposite  reaction.

Gov. Corbett has spared us from any increase in state taxes, so local taxes are going to go up to make up for the loss -- at least partially.

In recent years, the district also benefited from federal stimulus money that came from Washington. That money is no more.  And that creates a $364 million hole.

To put it another way, for the last 10 years the district has lived through a  (literal) Golden Era of increased state and federal aid and that era is, decidedly and definitively,  over. Austerity is the new reality. Programs the district could and did expand or create -- the whole Ackerman Renaissance program for failing schools comes to mind -- will have to shrink.

The superintendent will not go gently into that good night.  She wants to preserve and protect most of the extra money that goes to Renaissance schools, meaning that other (I guess you could call them) normal schools will have to take a bigger whack.

So, in addition to the new austerity, we are to have the new unfairness.

 

-- Tom Ferrick

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