The Mayoral Candidates Are Short on Ideas, so Citified Is Here to Help

Plans, people. We need to see some plans. With numbers and stuff. | Shutterstock.com

There are just 82 days left before Philadelphia picks its mayoral nominees, and the race remains shockingly deficient in both original thinking and concrete plans.

Licenses and Inspections is a wreck. Where are the five-point plans to fix it? The pension fund is eating City Hall alive. Who has clearly articulated an agenda to address that?

Or take schools. That’s all the mayoral candidates will talk about, a dynamic that’s starting to annoy some people. But the problem isn’t the subject. It’s the candidates’ wishy-washy blather. Consider the conversation around school funding. What you hear, from almost all the candidates, is variations on: “I’ll build relationships in the state capital and use the bully pulpit to convince Harrisburg to do its part.” Which is, in a word, lame. I mean, does anyone really think Mayor Nutter and Council President Darrell Clarke have not been trying to do exactly that, with very limited results?

If education matters so much, the candidates should be offering up firm plans to fund the schools using local dollars. Or they should be honest enough to say, sorry, the city can’t afford it, and the schools are state-run, so I’m going to focus elsewhere.

Well, Citified is here to help. We’ve got five wildly different plans for funding city schools. Each has flaws—big ones—but all far more specific than anything the mayoral campaigns have suggested to date. Candidates, feel free to crib these notes. You’re welcome.

1. A Plan For The Radical/”Transformative” Candidate

Boilerplate: The state needs to pay its share. To ensure that it does, I vow to develop relationships, use the bully pulpit, blah blah blah…

The Gist: But that won’t work. So we should aggressively privatize city assets and use the money we make on the sales to fill up the pension fund, then invest the cash we save in annual pension payments to make city schools shine. Some will call me crazy, but I call it courageous. We have tremendous challenges, and they demand radical, sweeping solutions.

The Plan:

1. Sell PGW (netting $500 million), auction off the water department ($2.5 billion), and sign long-term leases renting out the airport ($1.75 billion) and curbside parking citywide ($250 million). It’s big and it’s bold, yes, but pieces of this have all been tried before in other cities.
2. I estimate we’ll net $5 billion, which is almost exactly what we need to fully fund our pension obligations. After we’ve paid up our pension debt, we’d no longer need to make annual payments into the fund. Those payments total $600-plus million a year.
3. I’d sink half of that—$300 million a year—into the schools. That’s enough not just to staunch the bleeding, but to dramatically improve conditions in our schools. And I’d do it every year, by giving the School District an 80 percent cut of all property tax collections instead of the 55 percent cut it gets now. The city will be able to afford that investment once it’s out from under the pension elephant.
4. Oh, we’d also have $300 million a year left over to invest in city services and tax cutting. Yeah, so I just solved two of the city’s most pressing problems—education funding and pensions—and came up with a lot of cash to use elsewhere. What’s next?

2. A Plan For The Moderate Candidate

The Boilerplate: The state needs to pay its share. To ensure that it does, I vow to develop relationships, use the bully pulpit, blah blah blah…

The Gist: But as a realist, I have to acknowledge that may not work. That’s why I have a three-pronged plan to meet some of the district’s $108 million this year, and to provide responsible funding increases in the future. I know it’s not everything the district is asking for, but it’s what we can afford. And we’ll do it with a prudent mix of budget-freezing and revenue raising.

The Plan:

1. I’d meet some, but not all, of the district’s $103 million request for additional funds next fiscal year, and I’d do it by selling liens on tax delinquent properties in the city. I think that would raise about $75 million, and more than half of that would go the district. That’s a onetime fix, but it’s something. I’d also raise the liquor-by-the-drink tax from 10 percent to 15 percent, netting the district another $22 million, and to make that medicine go down easier with bar owners I’d push for legislation permitting watering holes to stay open until 3 a.m.
2. Going forward, as the city collects more taxes from properties appreciating in value and coming off the abatement rolls, I’ll make sure all those new dollars flow to the district by gradually adjusting downward the city’s share of property taxes. This will mean lean budgets for city departments, yes, but it’s worth doing. This slow and steady approach will yield about $100 million in new annual revenue for the district after three years, and over $200 million in annual revenue after six years. All without increasing property taxes.
3. Longer term, we will work to build the property tax base by making better use of vacant land, tweaking our valuation of property, and permitting denser development where appropriate. See my comprehensive plans on higher density zoning, land value taxation and the new Land Bank for more (imagine links to actual policy positions).

3. A Plan For The Ed Reform Candidate

Not Boilerplate: The state needs to pay its share. To ensure that it does, I vow to develop relationships, use the bully pulpit and strike a grand bargain with state legislators that exchanges a meaningful commitment of funding from them for my help deconstructing the School District of Philadelphia.

The Gist: Let’s face it, the School District of Philadelphia doesn’t work. Yes, that’s partly due to its dire financial problems, but even in the salad days of Gov. Ed Rendell and the stimulus gains were hard to come by. We need to whittle the district down to a few dozen magnet and special function schools, then hand over the reins of basic schooling to charter operators who do the job better and cheaper.

The Plan:

1. The crucial piece here is the deal. In exchange for a new Philadelphia-friendly funding formula and new, meaningful funding for education in Pennsylvania, I’ll pick SRC members that will approve every credible charter application that comes before them. Gov. Wolf may not like it, but if I run on this platform, and the people of Philadelphia elect me, can he really tell our residents he knows what’s best for the schools?
2. This commitment to independently managed schools will make Philadelphia the darling of the national ed reform movement—the new New Orleans—and cash and investment will flow here from philanthropists and edupreneurs around the country eager to find a model for urban education that works. True, that money isn’t permanent or reliable, but it can help fund experimentation and that’s what city schools really need.
3. With more robust state funding and a philanthropic windfall, the city’s new investment could be relatively modest: call it $50 million above and beyond what Philadelphia contributes now, or even less. Like I said, charters get it done cheaper. As for how we’d raise that cash, there are lots of options, but higher property taxes are the most direct.

4. A Plan For The Liberal Candidate

The Boilerplate: The state needs to pay its share. To ensure that it does, I vow to develop relationships, use the bully pulpit, blah blah blah…

The Gist: But because Harrisburg is occupied by Republicans who don’t give a damn about the city, we have to assume that won’t work. I’m going to raise a lot of money through new and expanded taxes, most of them targeting business, to give our kids the great educations they deserve.

The Plan:

1. I’d pass a tax on soda and use it exclusively to fund city schools. Yes, I know it’s been tried before—twice. But I’ll campaign with this proposal at the center of my platform, and when I win, City Council will know there’s a mandate for a sugary drinks tax that benefits the kids. I think that’ll change the political calculus. That’s $77 million right there, all of it for city schools, and it’s recurring revenue to boot.
2. To supplement that, I’d raise the Use & Occupancy tax, as Councilwoman Maria Quiñones Sánchez proposed last year. Her colleagues didn’t want it, but that was then (when some of those paying the tab were still reeling from AVI, another story altogether). This is now. That’s another $33 million annually. We’re up to $110 million in new revenue from the schools, and all of it from business interests who should be investing in the district because that’s their future workforce. I’ll make it clear to Business that, if they want my support on continuing wage tax cuts or still more sweeping tax reform, they’ll need to help me out on funding for schools.
3. Next up, PILOTs. Penn, Drexel, CHOP and company are great, but who are they kidding with this “nonprofit” business? They’re among the biggest real estate developers in the city, and they’re just as reliant on city services and infrastructure as everyone else (well, maybe not quite as reliant). It’s past time they paid their fair share. We need them to pay their fair share: nonprofits have gobbled up so much land—more than 41,000 parcels—that they have substantially weakened the property tax base. Time for the big boys to pay up. Back in the Rendell mayoral years, when there were PILOT payments, the city was collecting $9 million a year. $20 million annually now seems like a reasonable request. And so we’re up to $130 million in new yearly funding for the schools.
4. The biggest driver of the district’s financial crisis is charter expansion. I’ll appoint SRC members that will oppose all charter expansion and fight to close low performing charters. That’s the best way to control costs in the district.
5. If more is needed then we’ll turn to across-the-board property tax hikes. I don’t believe in cutting city services, and property tax is the least regressive tax at our disposal.
6. Ultimately, though, what I want is an independent, locally-elected school board. And I want that board to have taxing authority. Let the board determine what it needs. And let’s decouple city finances from school finances, just as is done in every other Pennsylvania municipality.

5. A Plan For The Other Priorities Candidate

The Boilerplate: The state needs to pay its share. To ensure that it does, I vow to develop relationships, use the bully pulpit, blah blah blah…

The Gist: If the state doesn’t come through, I’ll do what I can, but let’s be reasonable about the city’s capacity. We have a 26 percent poverty rate, crippling pension debt and very little maneuvering room in our budget. I’m going to focus on economic development (and/or) urban quality of life (and/or) public safety which, over time, will lure more people and jobs to the city, pumping up the tax base and enabling us to raise more money for schools. The State took over Philadelphia’s schools, and the state is obligated to provide for them.

The Plan:

1. I’ll make an effort to meet at least some of the district’s annual “ask” of the city; anything less would be irresponsible. But I’ll do it by spending down fund balances and employing as many one-time devices as I can come up with. Locking the city into larger, never-ending funding commitments to the schools would just ensure City Hall is as cash-poor as the district is.
2. Instead, I’ll pursue tax reform, or public space improvements, or violence, or whatever else I believe can be done to make the city more attractive to those without school-age children. We’ve come a long way luring millennials and empty nesters. Let’s double-down on that approach and keep it going.
3. Four or eight years from now, the city will be bigger and more prosperous than it is today, and so will the tax base. That’s when we can talk responsibly about significantly enhanced local funding for the School District of Philadelphia.