by Jay A. McCalla
In a few short weeks, Mayor Jim Kenney will present to City Council his plan for financing the future operations of the Philadelphia School District. He pledged to do so simultaneously with his early November announcement that he supported the end of the School Reform Commission.
Kenney must demonstrate that we can be responsible for our own schools — for the first time since Mayor Rendell’s departure — and that we highly value a quality, public education.
The dimensions of the dragon he must slay are almost stupefying. One year ago, the district announced it required an infusion of $5 billion to address a yawning list of overdue repairs. Of that, $3 billion is urgently needed.
Oh, and the fiscal experts predict a $250 million deficit will accumulate over the next four years.
Frankly, I’m on the edge of my seat with anticipation to see how Kenney will deal with this really, really tough situation. Generally, mayors rely heavily on experienced fiscal experts to create options that allow us to live and fight another day, without solving the problem.
One such exercise was Kenney’s “plan” to fund the $5.7 billion pension deficit. As announced, the Kenney path will get us to two-thirds funding sometime during the first term of his successor. Since his successor is not obligated to follow the “plan,” full funding for our pensions is nowhere in sight.
My appetite for Kenney’s school plan is further whetted by an exchange he had with bicycle activists in the wake of a cyclist being killed in traffic. He agrees the city can do more towards bike safety, but we don’t have the money. We don’t have the money.
It was just a few months ago that the mayor tossed $50 million down the drain by cancelling two years of planning and construction on a new police headquarters. Now, we don’t have money for bike safety.
Despite the burning calamity that is our pension fund, Kenney insists that it shoulder an additional $100 million in unpopular DROP payments.
Honestly, I see few signs that Kenney can reach deep inside himself and make the very difficult decisions this moment requires.
I’m troubled because, despite hiring an expensive education advisor, I suspect he didn’t foresee this seminal moment in the future of Philadelphia public education.
In his first year, Kenney created programs and spent money almost as though he were FDR. Community schools, pre-K (limited) and $200 million in new infrastructure debt. This is not the behavior of a man who suspects he’ll soon be asked to cough up $5 billion.
As critical as I am of Kenney, he is no more wily than any of his predecessors. Imagine how many successive mayors had to have “borrowed” from the pension fund for there to be a $5.7 billion hole.
Even Kenney’s plan to heavily borrow from Wall Street is a function of past mayoral delinquency. The price tag for the long-term neglect of our parks, recreation centers and libraries is $400 million, half of which will be financed and repaid over decades.
The most viable option, in my opinion, is reassessment. Mayor Nutter shifted us to an “actual value” — the infamous AVI-assessment in 2012, and there hasn’t been a reassessment of properties since. Taxing the increase in real estate values from five years ago may easily yield hundreds of millions of dollars, annually.
A commitment to reassess properties every three to five years will guarantee regular and substantial increases in revenue that will help us immensely and broadly.
Of course, this is a mayor who will be staring at reelection soon enough. Will he be willing to, in effect, raise taxes? How far will Kenney go to save our schools?
The Mayor’s Budget Address to Council will either offer a bold path forward or a weak incrementalism that only delays the “time of death” a la our pension fix.
But, as always, I can find hope. About 15 years ago, I heard a member of Council make extended, personal and moving remarks on the value of a quality education. He wished his education had been better. He wanted kids to unlock their potential.
Afterwards, I congratulated the councilperson — James F. Kenney — on his poignant remarks.
I know he understands the problem. But, in politics, where you stand depends on where you sit. Kenney now sits on the 2nd floor of City Hall. That difference may make all the difference.