CITY COUNCIL GIVES PRELIMINARY APPROVAL TO BUDGET PACKAGE THAT PROVIDES HEALTHY SURPLUSES FOR SCHOOLS

In Council News, Darrell L. Clarke, News by PHL Council

Philadelphia, June 5, 2018 – The City Council Committee of the Whole on Tuesday gave preliminary approval to a Fiscal 2019 budget package that would dramatically increase local funding for the School District of Philadelphia while providing relief measures targeted to low- and middle-income homeowners.

If given final approval by Council and signed into law by Mayor Kenney, City Council’s budget package would provide approximately $605 million in new funding to Philadelphia public schools over five years, effectively erasing the $630 million budget deficit projected by Superintendent Dr. William R. Hite.

And in a compromise between affordable housing advocates led by Council President Darrell L. Clarke (5th District) and Councilman Allan Domb (At Large), the Revenue Department will initiate sequestration to redirect rent and other revenues collected by property owners who are delinquent on property taxes to the City. An effort to securitize liens will not move forward. 

“Taking the Mayor’s proposal and inviting City residents into the legislative process over eight weeks of public hearings is the democratic ideal of crafting a budget, which is why Philadelphia City Council typically delivers on-time, balanced fiscal packages that are fair and broadly responsive to constituents’ concerns,” Council President Clarke said. 

“Our Fiscal 2019 budget measures include additional tax relief for homeowners, many of whom have seen dramatic increases in property assessments this year. We continue to encourage those property owners to appeal questionable assessments to the Board of Revision of Taxes, and an independent audit of the Office of Property Assessment authorized by City Council will soon be under way.”

Council is on track to raise approximately $605 million over five years in new funding for the School District of Philadelphia alone. A conservative projection that assumes no additional funding from the City or General Assembly from Fiscal Years 2020 through 2023 shows district surpluses throughout.

Five-year School District revenue measures include:

  • A slowdown in scheduled wage tax increases that would raise $340 million;
  • A City grant increase that would raise $100 million;
  • Department of Prisons reductions that would yield $95 million;
  • Sequestration to collect additional revenue from tax-delinquent property owners that would raise up to $93 million (due to an uptick in the collection rate).

An increase in the homestead exemption for property owners to $40,000, which will lower tax bills, would be offset by an increase in the real estate transfer tax rate, which would shift more responsibility for school funding away from modest-income homeowners and toward market rate property owners and developers.

Legislation related to the FY2019 budget package can be found at the City Council Budget Center, phlcouncil.com/budget2019. First reading in Council for budget bills is expected on Thursday, June 7, 2018.

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