Philadelphia schools

PA School District’s Financial Problems … Taxpayers Draw the Short Straw

Pennsylvania State Education Association (PSEA) the state teachers union recently released a study, Sounding the Alarm, which looks at the financial crisis in school districts across the states.  The paper examines how districts are being forced to cut educational programming to meet the demands of school budgets because of the public schools financial crisis.

The PSEA report identifies the following five key problems that have combined to create a financial crisis in the public schools.

1. State Budget Cuts. Unprecedented state funding cuts and the elimination of key funding programs have compounded underlying, systemic problems, particularly for lower-wealth districts.

2. Charter School Payments. Charter and cyber charter school laws result in a net increase in costs to school districts.

3. Declining Tax Bases and Rate Limits. Declining local property values and caps on property tax increases have eroded school districts’ tax bases and curtailed their ability to raise much-needed revenues.

4. Underlying Fiscal Weakness.  School districts showing the greatest underlying financial weakness had fund balances averaging 1.27 percent of total expenditures. These districts tend to be relatively small, rely heavily on a single source of revenue, have a small amount of buffer within their budgets, and carry a heavy debt load. They range in type from urban school districts, to small districts in the coal regions and Monongahela Valley, to rural districts in the central and western parts of the state.

5. Pension Cost Increases. A decade-long “holiday” that allowed employers to avoid paying their share of retirement contributions, coupled with investment losses from 2008 and 2009, forced the current increase in employer payments.

In the Education section of today’s Philadelphia Inquirer, we learn that Philadelphia schools may not be opening in September due to a budget gap for 2012-13 of $218 million! The school district officials are hoping that the five unions operating in the Philadelphia public school system will ‘giveback’ $156 million to help next year’s budget.  There is discussion of privatizing the custodial services; officials think they can raise another $50 million from maintenance, transportation and custodial cutbacks.  Even if this wishful thinking translates into a reality for Philadelphia public schools, they figure they will still end up short by $94 million.

In the meantime, Mayor Nutter is trying to collect $90 million in taxes for the school district next year by shifting to AVI (Actual Value Initiative) system for property taxes.  Nutter claims that the new system will more accurately indicate the increase in market value of properties in the city but includes two tax hikes to Philadelphia’s properties owners.

Whether it’s PSEA or Mayor Nutter in the city, why is it that the solutions have one thing in common – the burden falls to the taxpayer with increased property taxes.  I’m really struggling to understand how taxpayers are going to survive the increases in the tax bills.  We all want the quality of the school districts like T/E maintained, we get that our property values are tied directly to the desirability of the educational program but … if the residents can no longer afford to live in these communities, than what difference does it make?

Layer the state funding cuts with the teacher’s pension and health care benefit cuts and add in the community’s demand for excellence in the schools and you are left wondering how are the school districts supposed to balance their budgets?  Answer seems simple … either decrease spending or increase revenue.  Problem is that the school boards are finding themselves left with few options short of jeopardizing the quality of education, as they discuss options to increase revenue.  One of the more unfavorable budget strategies left on the table is demotion of professional staff for economic reasons and increasing class size.  Of course, there was another revenue source but that option was not taken to the voters — the Earned Income Tax.  It was decided that it would not pass a voter referendum.  While that is probably correct and an EIT would not have passed, I wonder how the community is going to feel about increasing property taxes and possible decreasing property values.

Like many people in this community, I too feel the frustration as we sit on the sidelines of the District’s budget discussions and watch for updates from the teacher negotiation talks.  I have asked for transparency in the negotiation process but apparently, that is not to be … interesting to note however that in some parts of the country, teacher contract negotiations are held in the public.  For instance, in Idaho the state law allows public attendance at all labor discussions.

Below is a comment for Community Matters from a resident that shares his/her frustration:

Comment from ‘Damage Control’

T/E Budget Crisis Solved!

Move to Haiti. Yes, you’re reading this correctly— move to Haiti. Students, teachers, administrators, board and taxpayers – move to Haiti! … where they use rags as soccer balls, bicycle rims for basketball nets, parking not an issue. Teachers get paid $5,000 per school year, administrators reap $7,000 and yes, like all the other districts, the superintendent makes $10 worth of stogies (not stoga’s). Best of all, UNICEF and the Salvation Army “underwrites” the entire school system!

School board, what nerve you have in asking non-profit organizations to help with a bailout. I am not a teacher nor do I have children in attendance. I’m just an old taxpayer who sees the “writing on the wall” with this school board and this particular cost savings “strategy” is one of the reasons that prompted me to write this piece.

How dare you! How dare you ask non-profits for a handout when you have $30 million in reserve! You say this reserve money is set aside for rainy day issues, sick day payments, retirement, etc.—Total BS and I don’t mean in a masters or PhD degree sense! How dare you ask these non-profits when your net worth far exceeds any amount these local non-profits could attain even if they all pull together!

Aretha Franklin sang about RESPECT, Rodney Dangerfield got more. You, the board, gave NO respect to Ms. Whittaker, the TEEA president at the last school board meeting. Granted, you announced and stressed at the meeting that only TE residents could speak—a.k.a.—allowed to be heard. Excuse me? Is Dr. Waters a resident? He speaks at school board meetings and he commutes from a different time zone!!! And, by the way, who pays for his gas—TE resident tax payers do! A TE resident voiced that the TEEA president be heard—you board, denied that request. By denying Ms. Whittaker the 1st amendment right of every American, you fired the “first shot” deep into the bowels of the TEEA ship.

Am I just blowing smoke? Don’t think so. Threats of cutting family coverage without ability to purchase such coverage, demoting top educated and experienced teachers, over-crowded classrooms, etc. will only bring together teachers, students, parents and the many news cameras and media to every school in this top-notch and one of the richest school districts in America come this September. Lines drawn, let the battle begin—what a shame! There will be no winners.

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