So the district, as you said, right, they conducted a pretty two years of getting information and input from families. From surveys, they received about 13,000 survey responses. They had about 40 plus different meetings in the communities, and they also had about -- I know there was a facilities plan project team of which I was one of members from this body as well. I'm just -- I'm just trying to walk us through the process.
I understand. But when it was time to make a decision about what schools were going to stay open and what schools were going to close, because a lot of these schools -- school closures really just don't make sense. And we know that the reason for the closures, the reason that the population and a lot of these schools has diminished is because of action taken by the school district in which special admit schools were changed in terms of how you get into these schools. So you had a special admit school, let's say with -- as an example, like Parkway, let's say it had 500 students, and then the following year it had 250 students based on the changes the district made. So there has been no attempt to go back and correct their changes before you make these drastic decisions.
So I will share that you are correct. And when the district --
Let me finish. Let me finish, Councilwoman. Let me finish. You're correct in that there were changes made, and I -- I don't -- I want to make sure I get the year right, whether it was 2021 or 2022. That is correct. However, after that, Dr. Watlington and his team worked very closely with the principals on rectifying that. So those special admit principals were at the table the following years to help develop the criterias for their schools. What I want to share, just quickly again, is that our build -- there is a 65 percent utilization rate. That means that we have buildings that are underutilized. Some of them have a percent 6 utilization rate. And when we 7 think about fiscal management, 8 that's not fiscally responsible to 9 operate a facility that is 10 underutilized. And the key is -- 11 and I think what gets lost in this 12 -- 13
So 14 let me -- let me pause you right 15 there. And I know my -- the bell 16 has rung. But when you shift 17 educational options, if you look at 18 a map of the city of Philadelphia 19 and sort of slice it right down 20 Broad Street, most of the 21 educational options that are alive 22 and thriving and actually 23 overpopulated are in the northeast 24 and -- or -- basically, east of Broad Street, for the most part. And so when you look at where the closures are, they have been mostly west of Broad Street. So what you are doing is really taking away options for a whole section -- a whole -- almost half of the city, when you close schools in our neighborhoods, rather than -- where these schools are overpopulated, rather than providing transportation and moving them into some of these spaces. You have schools on the east side that are having classrooms and closets, from what I hear. I mean, this is just really quite unacceptable, some of the learning conditions, because of the overpopulation. This is fixable, is my point. This is fixable. And I don't understand why we're not having those kinds of conversations. But, Mr. President, I'll respect the bell.
Well, thank you very much. The Chair recognizes Councilmember Jamie Gauthier.
I had questions for OPA, but I think this conversation is more important. I will cede the time to my colleagues.
Okay. Thank you very much. The Chair recognizes Councilmember Nicholas O'Rourke.
Thank you, Mr. President. Good morning to all who are here this morning. Thanks for being with us. I want to ground us in what this moment requires. The needs in our community, in our city are urgent: housing, schools, infrastructure. And I agree that meeting those needs requires real recurring revenue. But we also have to be honest about how we raise that revenue and who we're asking to carry the weight of that revenue raising. Because for many Philadelphians, the cost of living is already too high; it has been too high. And when we talk about new taxes on rides, deliveries, and everyday transactions, people are going to feel that. I just been thinking about this all week and I guess since all the news broke, I -- it's important I think for me to say that as a -- as a -- as a progressive, however you define that, I am against as a principal, regressive taxes. However, the school's needs money. I think everyone agrees on that point. So I sit back and I consider the administration's argument. This is a billion-dollar corporation or companies that we're talking about. And they could -- and they -- I would even emphasize they should actually absorb the cost. They do not have to pass it on to the riders. That is an -- is an important thing to say. But what we also know because of history and because of what they have said to me directly, is that they are not going to absorb it; they are going to pass it on. I have to appreciate my colleague, Member Young, who lifted the point earlier, which I -- it was beyond me, but I'm glad he made that point: If the legislation, if a tax literally says, you got to pass it on the riders, that flies in the face of the argument in the first place, and that's got to be rectified. But then, I consider that if we know that they won't -- they won't absorb the cost, they're going to pass it on. If we know that, then where else can we get the $50.4 million that we're looking for? My progressive decarceral mind looks at the billion-dollar police budget that you continue to hold deep respect for. You can -- I think you can continue to hold deep respect for Commissioner Bethel and for Chief of Staff Healy and for President Poplar, and not pretend that the police budget is somehow untouchable or outside the purview of this body's appropriation powers. It is not. We could get it from there, but we won't. And we know that it's not going to come out of there. So I'm left to kind of figure out how we navigate this moment. Candidly, it's real hard to separate this from last year's decisions on the business income and receipts tax. The city moved forward with BIRT cuts that primarily benefit large corporations and while raising taxes for our small businesses. Now a year later, we're considering revenue measures that fall more directly on working people. I support investing in our schools, addressing homelessness, maintaining city services. We owe quality services to our citizens. Everyone deserves housing and we know the schools need money. And also, I want to make sure that we're building a tax structure that reflects our values. One that is fair and that doesn't deepen the inequities that we're actively trying to solve. So my questions are about how the administration weighed those tradeoffs and whether more equitable options were fully on the table. Last year, Minority Leader Kendra Brooks and I introduced a proposal to explore a local wealth tax focused on ultra-high net worth individuals. Can you walk us through whether the administration evaluated more progressive revenue options like that this budget cycle? And if not, what has prevented the administration from more seriously pursuing revenue strategies that more directly target billionaires and large corporations who we agree ought to pay that tax?
I can answer it in like one sentence: Uniformity clause. Uniformity clause prevents us from doing what you would want to do with wealth tax.
Okay. I heard the bell. I'm going to get two more on, if you don't mind, Mr. President. On the proposed $1 rideshare tax, can you clarify how this interacts with the existing state-imposed fee on rideshare trips? And does this stack on top of the current state fee? And if so, what does that mean for the total cost per ride for consumers? And relatedly, have there been any conversations with state partners about adjusting how existing rideshare revenue is allocated? Right now, a portion of that funding is split with the Philadelphia Parking Authority, has the administration explored directing a larger share or all of that existing revenue to the school district of Philadelphia, instead of creating a new tax burden with this regressive tax?
On the proposed $1 rideshare tax, can you clarify how this interacts with the existing state-imposed fee on rideshare trips?
So it is on top of that tax, kind of like our local sales tax is on top of the state sales tax.
And so what does that mean for the total cost per ride for consumers?
Combined, it -- depending on the cost of the ride, but an average ride is about $19. So it would be about 6 percent of the ride with those two combined.
Okay. And the second part was relatedly, have there been any conversations with state partners about adjusting how existing rideshare revenue is allocated? Right now, a portion of that funding is split between PPA. Has the administration explored a -- directing a larger share or all of that existing revenue to the School District of Philadelphia, instead of it creating this particular new tax?
And we have not had those conversations. One of the reasons that the local option appealed to us is, one, we control it locally, and two, that none of it would go to the Parking Authority.
So my time has been expired. I have other things I would like to ask, but I just want to emphasize again what Member Young lifted up. If it is in the text of the -- of the -- of what's being proposed here, that is a non-starter. I think it needs to be -- that you need to start there and fix that. It is -- it is hard for me, who was prepared to come in today to, as a progressive, bolster the argument the administration is making that billion-dollar corporations ought to pay and not pass this on, even though I know they're not going to do that. I will -- I will -- I will ride for that particular point. But if your legislation is saying that the riders are supposed to be the ones that bear the brunt, it undercuts the whole argument. You've got to fix that. That is -- I think that is a non-starter.
I was just saying that companies still collect it, and then they have a choice about what they can do with their pricing.
There's a point -- there's a point of information. And I want to be clear, these are points of information, is not an opinion. So these are points of information. Go ahead, sir.
Thank you, Mr. President. But the legislation says that it could -- they have to collect it from the passenger. So I'm not understanding what you are thinking that it can be anything other than that.
They can make a pricing decision, right, about how they build in that dollar.
But they still have to collect it from the passenger. Whether they build it in some way, they still have to collect it from the passenger.
And then -- you're right. And then they make a decision about how they allocate that dollar.
They cannot. They do not have -- they do not have the ability to make that decision based on what the words of the legislation says.
They can do that. If you want, we can get you something in writing from law, explaining how that would work.
Please. Because of the legislation clearly just says, you know, we -- as we look at it, right? It clearly says, "The TNC shall collect the tax as agent for the Board of Education from the passenger at the time of the charge for the ride and shall remit the tax to the revenue commissioner." So please explain any other, like, interpretation of that.
Well, then they make the decision about how they do their pricing after that. They have a decision about to make. And they're clearly making decision that they're not going to offset that cost to the riders, and they're going to pass it on.
Thank you very much. Councilmember Dr. Nina Ahmad, Councilmember Jim Harrity, then Member Brooks.
I'm going to follow up on what you said. Thank you, Council President. I'm following up on the point Councilmember Cindy Bass made about full engagement in this process. Dr. Carrera said that this -- once this enrollment issue was unearthed due to the problems created by the district, principals were asked to respond to it. I know for a fact in Lankenau, we'll talk about one school, they asked for permission to have multiple sections of the allowed amount, 33 students, they were not given that. They were -- they had asked for use of tier or tier 2, which would criteria to create desirability. They were not given that. And they asked for a name change that would have branded them in a specific way; they were not given that. So all I'm saying is you asked these principles to do things, they told you they wanted to do these things, and the school district didn't allow that, and now they're being penalized for what they were not allowed to do. So how -- so that's one point that I wanted to address that Councilmember Bass brought up. So it's incorrect when you say that the principals did not respond. What I'm saying is if you really are concerned about this problem of low enrollment, give these schools a defined time to say a five-year time period to do these things. Show us. If you don't show us, then you're gone. Right? But you haven't given those options. You haven't clarified what they have to do, what permission they have to do, and then they fail. That's a different matter. But you have -- the school district has not laid out clear guidelines as to how they address the enrollment problem. In Lankenau, it is nothing else. They don't have a problem with their building; they don't have anything. They have a curriculum that is land-based curriculum that is based on it being a forest, and you're trying to shove that into a farm land. That curriculum will not exist over there because the land in the other school doesn't allow itself to be used in that manner. So if you are thinking, Oh, we're going to merge this and we're still going to have the environmental curriculum, it'll not work. So I don't know what standards, what data, what you are doing to come to these points because it makes zero sense. Zero sense to take the only environmental school in the entire school district, one of two in the entire state, and you're trying to say, we're going to shove it into another school. That is not happening. That is just so irresponsible to have stewards of tomorrow, our environmental stewards of tomorrow, cut off at the knees, because we don't know why. Because you haven't explained why. And I want to understand -- and I know Councilmember Katherine Gilmore-Richardson asked them to be here. I want to understand how they came to this. Each school, they should have done a score for the each school to say what are they losing? What is the deficit in each school? And how we -- can we address it? They were not given any options to address these things. You're just saying done. So I cannot understand how you're asking for new taxes to help the school district when they're not operating in good faith. Simple as that. Everything we've seen this far, they are not operating in good faith. We don't know what is the motivation for doing this, we cannot understand the motivation. We are going school by school by school, and we do not understand the motivation because there has been no 19 corrective action done. This is how things proceed. You have a problem, you've had a plan, you try to correct it, doesn't work, then you make this plan. But that has not happened in the school district. So we cannot just take one superintendent who wants to have a different vision, suddenly lay it on top. This happened before to the school district.
So this is highly responsible to come to us, to put this tax on poor people, on elderly, on the sick, to say, now you pay more because we don't have a clear plan of how we're going to use the money, because we're still going to cry no money, no money, no 14 money. And then we're not going to correct it. So you guys have a responsibility before you come to us to say, how are -- the numbers that we wanted, how are you allocating this? What are the corrective measures? What worked, what didn't work? How much timeframe was involved in that? I cannot fathom how you can get in front of us and ask us to do these things. And our constituents are telling us they're going to be deeply penalized by everything you have said today without a rationale, without a way forward. Thank you, Council President. There's really no -- I cannot understand this whole process at all.
Thank you. The Chair recognizes Councilman Jim Harrity, then Councilmember Brooks, then Councilmember Rue Landau.
Thank you, Council President. Good morning. Rob, I've been sitting here with the Beatles song stuck in my head all morning. One for you, for me. I'm the tax man. You 22 know -- 23
Excuse me, point of information. What's the name of that song again?
It's a Beatles song. Yeah. The Tax Man. Yeah. I'm not going to be known as the tax man. I'm really --
I'm really kind of appalled that the way it's being played here is that if you're not for this tax, you're not for children and you're not for teachers. I'm a union guy; everybody knows that. I'm a 100 percent for teachers all the time. We don't treat our teachers right. But throwing bad money after bad money and keep on piling on, as my colleague said, another poor tax, just like the soda tax. So I like that Councilman Phillips was asking and my colleagues are all asking the -- around the same questions, too. Yeah. How do we know the projections are the projections and we're going to get this money? Because I remember the soda tax was supposed to pay for all this stuff too, but we're putting $49 million out of the general fund every year. And when I asked about it, you told me that that's the way it was always supposed to be. We knew we were going to have to put up money. So that's where I -- comes into just piling more and more on my neighbors. I can't do it. At numbers; 30,000 residents in Philadelphia are driving for either Uber, Lyft, or some kind of food delivery service, right? Data shows that the driver's pay is cut 4.5 percent in cities that imposed the rideshare tax. 80,000 trips last year were to or from Kensington, where I live. Sixty percent of all Uber rides, and 61 percent of all Lyft rides in Philadelphia originate from low-income areas. All right. Have we considered the impacts this will have on low-income neighborhoods, both in increasing cost and reducing driver pay as a result? It's like a double whammy for the people in my neighborhood and other neighborhoods around this city, because not only are the drivers going to get less pay and less work out of this because people are going to find other options, but also the people that still use the ride are going to get taxed. Again, I'm for the kids, I'm for the thing, but I don't -- how are we supposed to -- how am I supposed to look at my neighbors in the face and tell them I'm going to hit them with another tax? Since I've gotten here, I've -- man, I voted for just about everything that has come down to when it came to the school board, because, you know, that's the right thing to do for the kids, right? But when is enough enough and when are we actually going to fix something? Fix it. Like, can you answer any of that?
Yeah, I can answer -- I can answer a lot of that. And I'll also ask Dr. Carrera to answer the question about progress being made at the school district. So I can go back to the commuting question. We looked at census data, less than 1 percent of people who earn less than $40,000 use rideshare to commute. When we looked at patterns of who used rideshare, that usage went up with income so that, you know, the higher income you had, the more people were using rideshare. So I understand your concerns. And it was stuff that we looked at. Two, in terms of the school district, and they will be here in a few minutes. They have been making real progress, and we really want them to be able to build on that progress. And we're concerned that if they have to make the cuts they were going to make, that process would start to reverse. And I'll ask Dr. Carrera to fill in more of that information.
Yeah. Thank you so much Councilman for your -- for your question. And we thank you for all the support that you have provided and all council members here throughout the years. We know you care about the kids. We know you care about the teachers. We know you care about the administrators. And I want to make sure that that goes on the record. The 340 positions, these were -- these were positions that were purchased with COVID dollars, and those positions were used to support students in really underperforming schools. The money is gone, as we know. And the school has made progress because in many of these schools, there have been math interventionists, there have been reading coaches, there are schools that have coaches that are working with teachers. These are all practices that work; that move the needle for instruction. That -- and we've seen that. The district has made progress in reading; they've made progress in graduation rates. So these positions are what we are talking about today, and that is why the rideshare tax is being proposed to support these dollars that were used -- COVID dollars, they're not -- they're gone. And we want to make sure that the progress that the district has been making continues.
So if we close these schools, we are not going to see any teachers lost from the schools that are closed. What happens to those teachers? Where do they go? What happens to the principals of those schools?
Thank you. That is an excellent question. Thank you so much, Councilmember. Every year, the school district -- every year, the city of Philadelphia has a 2000 teacher shortage. I'm going to say it again. Every year, the city of Philadelphia has a 2000 charters, school districts. And you might say, well, how does that happen? Why is that happening? Philadelphia, Pennsylvania used to be the state where Virginia, other states would come here to get teachers. The decline has been so dramatic because we're seeing many people do not want to go into this profession. So the answer to your question is, as the Superintendent has said, resources are spread thin, because we have, again, over 200 plus buildings, we don't have the enrollment. So you -- now what's going to happen, as the Superintendent said that teachers are not going to lose their job. But there are schools that have vacancies. There are schools that have math teacher vacancies, science teacher vacancies. So this is going to help fill those vacancies --
Numbers are numbers. I just want to know, now you just said it, if we're short 2000 teachers, where were we firing 300 or getting rid of 300 and something teachers? We're already short. Like, I -- numbers are numbers. And do you understand? It doesn't add up. Like I'm not a -- I'm a fairly simple man.
And if it doesn't add up for me, I know it's not adding up for my neighbors. But numbers -- remember you're saying we're short 2000 teachers --
-- but if we don't do the rideshare thing, we're going to lose 340 teachers, right? Like where -- well, if we're short the 2000 teachers, how are we losing 340 teachers?
So let me explain that. So those teachers, when we're saying that they would be cut, that means that they would be moved to other buildings. So I'll say it again --
With or without the tax? Is that -- that's what you just said. No 5 matter what.
-- 2000 vacant, 300 and something that we want to get rid of --
There would be no layoffs. There would be 340 fewer positions in the district.
I think the point also is -- that I want to make clear, right?
No, don't be sorry. Chair recognizes Councilmember Isaiah Thomas, for a point of information.
And I'm already last in the order, so it's no big deal. I want to be very clear, you're saying that no 8 matter if we vote for the tax or not, nobody will be laid off?
Whether we enact the tax or not, nobody will be laid off?
Nobody will be laid off. But there would be 340 fewer positions, so there would be less going on in classrooms.
And can I add to that? Can I add to that? There will be a disruption --
So -- one second. Member Harrity? Member Harrity, the floor is yours, sir. And then Ms. Debora Carrera.
That was all I was to -- Council President, I got what I wanted there. There would never going to be any job loss here we are short of teachers as it is, we need all the teachers that we can get, and can't afford to lose not one of them. And we're not going to lose not one, but because we're short, we need to make up those jobs. The money is there. I'm sorry.
So I just want to -- I just want to make this very clear. Those 340 positions are in schools right now, making progress and supporting children. Let's say for example, Mr. Chuck at Elkin Elementary, climate staff teacher. He has been there for nine years, right? His position would be cut. That means he would go to another school, but they would not have that position in their school anymore. So the important thing that we have to understand --
Member 15 Harrity, we going to do this 16 you-all, right? Now, first and 17 foremost, I'm going to point the 18 individuals to speak, right? So we can do this in decency and everybody can have the opportunity to express themselves. And if you have a point of information, I'll point at you and you can give your point of information regarding the issue. If it's an opinion, you will wait until your time on which you are called, because you do have other members who have been waiting patiently also to participate in this round. And so with that being said, member Carrera, please respond to Member Harrity.
Right. So if I'm a -- if I'm a principal, and I was given five teachers to reduce class size through these dollars, and now I have classes at kids 15 each, you take three teachers away, 16 they're going to get -- they're 17 going to go to another school. 18 But I'm still going to 19 have those vacancies in the sense 20 that now I'm going to have classes with 30 something children. So the goal of these COVID dollars was to support the schools that need the help the most. That is very important. I don't want that to get lost here. And so, climate staff, teachers, reading coaches, those positions are gone. Our kids are going to regress. And that is -- that's -- that is going to be the unfortunate truth that our kids are going to go backwards because they've made a lot of progress with the support that they've had.
I want to take a moment of personal privilege to point back to Member Harrity. Now, Member Harrity your brief response, sir, to your line of questioning.
Yeah. Look, I -- the numbers just don't add up for me, Council President. Like I said, I'm not --
You know, I don't think anybody's going to consider me a rocket scientist. But math, simple math, is math. And if we're short 2,000 teachers and they said that we would have to lay off 300 and something teachers, where does that come in at when you're already short 2,000 teachers? Teachers are not going anywhere. They're already saying that it's a choice. Your choice was when you decided to shut those schools 13 down, 20 schools in the beginning, 14 whatever it was, that was when you 15 made the decision that people would 16 be moved around, right? So telling 17 us that people are going to be 18 moved around if we don't apply this tax, for me, just doesn't add up. Council President, I will wait till second round or when the school board gets here to ask some more questions of them. I didn't even get to the fact that we're going to let people get away without paying their tickets, when other people are paying tickets every day. It's one of the biggest complaints we get in my office. Thank you, Council President.
You are welcome, Member Harrity. Chair recognizes Councilmember Kendra Brooks then Councilmember Rue Landau, then dear Member Young.
Thank you, Council President. I just want to channel some of my members' energy around education. My questions -- I did not come directly to education questions. However, just in -- just a little history. Historically, the district has given false data to close schools in the past. I'm really excited to see the energy in this current Council body around school closures, because when I was a parent fighting for schools, we didn't have that same energy. So I really would like to applaud my colleagues for stepping up in this moment, because this is crucial to communities across the city. And it's very important that we shouldn't get this information or have to ask these questions right now. A lot of this data should have been presented school by school. If it was schools 13 stated to be closed, we should have 14 had detailed information about the 15 why. 16 And those conversations 17 should have been held at individual 18 school communities, so the 19 communities, the teachers, and the 20 elected officials understand exactly what's going on. And we don't have to play these shenanigans right here in a budget hearing. So that's my thought on that. But my questions. I want to talk about the tax system in Philadelphia that I have been fighting for. Since I came into Council, I have advocated for a wealth tax. 04 percent tax on stocks and bonds that would generate over $2 million a year, according to Penn Policy Center. Last year, along with Councilmember O'Rourke, we introduced the People's Tax Plan. We felt it was important to put an initiative -- I'm sorry, an alternative vision out for the city. The plan was called for a wealth tax and expanded wage tax fund and doubling the BIRT exemption. I have concerns about the decade plus tax cuts that were put into law during the last budget season. This is part of why I did not vote on the budget last year. So as we sit here today, I find it surprising that we are looking for new taxes. Many of them that would fall on the backs of working people. I worry our tax system is moving in the wrong direction; eliminating small businesses. BIRT exemption made our overall tax system even more regressive. We are seeing increases in energy bills and the cost of living, yet we are continuing to cut tax on the most profitable corporations in this city. And I want to state this clearly; I am for more funding for the school district. That has been my lifelong fight. I've been fighting for school funding since my daughter, who is now 35 years old, has been in this public school system. And I'm still here today, just in a different capacity doing the same. So I really pushed back on the fact that if I don't support this Uber tax, that I don't support schools when all of my children have benefited from public schools, including myself and now my grandchildren. That is not fair to us to do that. Anyway, organizations like Lift Every Voice have demanded an immediate $75 million to stop layoffs. And I think we need to find the funding, but I'm skeptical of the way this administration has proposed to do it. So with that, I want to ask a few questions. I'm going to just get all my questions in sequence and then you can respond. So I want to ask the question, has the -- in -- the administration looked into the possibility of the wealth tax? I heard it what you said to Councilmember O'Rourke but according to our attorneys it does not fall into the uniformity clause. And we could debate that later on, but from our information, that's not what we understand. And why would a tax on rideshare and delivery service be preferred over a tax that would target the wealthiest amongst us? And what taxes -- what other taxes did administration look at when trying to figure out how to support the school district? And my next question was similar to Councilmember Harrity. I'm wondering how the proposed rideshare tax would affect Uber and Lyft drivers?
In other cities, we've seen labor unions like SEIU partner with you Uber to give their workers a voice on the job. And I was surprised that this conversation around taxes, we haven't focused on the drivers at all. What is the city doing to ensure that Uber and Lyft drivers have better working conditions? And have you had discussions with labor advocates about how to improve driver working conditions and pay as Councilmember Harrity suggested? And those are my questions.
I think the first question was about -- actually can you go back to the first question?
The first question was about what other taxes did you look at when considering how to support the school district and why would the tax on rideshare and delivery services be preferred over a tax that -- over a tax that would target the wealthiest amongst us in the city?
Yeah. So we did not want to do a broad-based tax. We didn't want to do an increase in property tax or the wage tax. We wanted to do taxes that we could target at the services we could provide. And since there was -- the rideshare tax already went to the school district, we went to that tax. We can't target the wealthy in our taxes; we are not allowed to under the uniformity clause. And we did look at rideshare usage and did see that it went up with income. But we can't target the wealthy in our tax system.
The other question -- so those are the only taxes that you looked at when it came to funding the school district, the ones you just mentioned?
Okay. And my other question was around, did we -- did you -- what did you do to ensure that the Uber and Lyft drivers have better working conditions in the discussion? Or have they had conversations with the labor advocates around improving driver working conditions and pay, considering that they're also going to be impacted by the increase in fare this passed off to driver -- I mean, to the community?
O'Rourke, there's a point of information, correct?
Yes, sir. Isn't it true that you can target specific industries with taxes?
Just state your name for the record, and please begin.
Good morning. Kathleen McColgan, revenue commissioner. We do have per legal guidance. We have the ability to tax BIRT by NAICS codes; industry codes. However, that is not something that -- those codes merely reflect the industry and does not make any distinction between a large business versus a small business. So for example, that industry code would capture a small corner store as well as a large grocery chain.
Thank you very much, sir. Councilmember Rue Landau then Councilmember Jeffrey J. Young.
Yeah. To my colleague's point, this body has often identified specific taxes towards industries, whether it was tobacco, whether it was the beverage industry. You just cannot separate the big from the little. And I don't know if we fully explored all of the possibilities of places that we might be able to levy a fare tax onto people. And I just urge us to keep all of our options open before we double down on our kids, double down on closures, and double down on a poor people's tax towards rideshare. Thank you, Mr. President.
Thank you very much, sir. Councilmember Rue Landau. Then Councilmember --
Thank you. Thank you, thank you. I want to take a first -- just one second to kind of comment on a lot of what is being said here. I agree, we have done some very creative taxes in the past. And I just want to -- most importantly, what's happening here, what I've seen happening since the times the school district comes and talks to us, especially this year, is a sheer lack of communication, honesty, working with us as members, and working with community people when it comes forward to what they're trying to do. And what happens is we start distrusting. We are severely concerned about what's happening, and then we start hearing different answers. And I've got to tell you, without building that trust and that understanding and giving us real numbers and real facts, we are automatically going to be against what you're talking about, because we don't think you're telling us the truth. So I got to tell you that that's what's happening here. We have taxed many things in the past. Though it is -- it is not as simple to say every element of the -- of Council Members Brooks' and O'Rourke's wealth tax are all impossible to do based on the uniformity clause. I don't believe that is true. And I do think we can be creative, and we can come up with this money. So I'm going to start with some broad questions and get into more specific. But I do want to lean into what Councilmember Lozada was asking about whether or not the city is continuing to push the state on the $1 billion that is owed to us. We are -- we have a Commonwealth Court decision from 2023 that said -- says that the school district of Philadelphia must be equitably funded. It's clear as day. You get -- you just -- they worked two decades on this -- on this campaign to get this court ruling that tells them exactly what we should do. And they backtrack by saying, oh, we're going to create a commission and come up with a formula and do the best that we can. The state owes us this money; they must pay, and then we will have all the money that we need to make our children, and our teachers thrive.
Yeah. Thank you so much, Councilmember. Yes, to what you're just saying. So we are working with the state. We brought partners together to talk about the adequacy funding. We've thanked legislators. Again, we got $135 million last year, 135 million -- this year. And it's $1 billion, right? And so we are working to -- as the mayor has said, when we go to Harrisburg, we also have to show what we're doing as the city because it's important. I worked at the state, I've been at the General Assembly. I worked for the -- I was the executive deputy secretary for the Secretary of Education. We need to show that we are also doing our part as a city to provide those -- that local revenue within the limitations, as you've heard Rob Dubow talk about. So I know the district has just walked in and I'm sure that people want to hear from them as well. But Council President, can I make a point of clarification? Thank you.
So I just want to make sure that the positions that we're talking about, the 340, they would be transferred to other buildings. But that would impact the schools that they're in because they have been serving those schools; working with the children and making the progress.
So just for clarity, those 340 positions, they would just be transferred somewhere else, and they wouldn't actually be in the current schools that they're in?
Right. And I -- but I don't want to lose that point because that is a big issue.
I think the way it's being conveyed is that in the event that this funding isn't approved, that 340 positions will be totally eliminated. That's different from being transferred. So those people will still have a job, they just will have it somewhere else, and they just won't be in the current positions that they're in. Is that what I hear you saying?
That's accurate. But that school would now have fewer positions. So they would have fewer teachers, fewer counselors, fewer climate staff.
Just so I can understand clarity, why would the 340 people being moved under your recommendation be more important than the staff at Parkway, Lankenau, MCS, Robeson, and all the other schools that's been moved in the past? So if I'm understanding correctly, you're telling us that we need to do this so those 340 staff members don't get moved. But in your same Facilities Plan, you're going to move the staff at Lankenau, you're going to move the staff at Parkway West, you're going to move the staff at Parkway Northwest. You're going to move the staff at Robeson; you're going to move the staff at Overbrook Elementary School. If I add up all the staff in those schools, that equal more staff than the 340 you're mentioning. So please explain to me, why would we care that you're moving 340 staff members when your buck -- your Facilities Plan moves more than 340 staff members point of information, I just don't understand it. Can you please explain?
When I was here the last time I talked about how I moved Kensington Capa into a new facility. And I'm not sure if you remember that. When I was at Cumberland and Coral, we moved from Cumberland and Coral, an entire school to Front and Berks, a brand -- we moved into a new building, right? My entire staff moved with me. I moved, my teachers moved, my climate staff moved, my counselors moved, my students moved. The Superintendent has said repeatedly that next year, '26, '27, is a year of transition and planning. These are the pieces of information and the work that has to be done, because we don't want to disrupt children. That is not the -- that is -- we want to give children what they deserve and what they need. And when you're talking about resources being spread thin, a kid cannot have Algebra if there's no math teacher in their school. They cannot -- they can't use a lab if there isn't a lab.
You're testifying for me. You did not answer any of my questions. You just proved my point. I agree with everything you're saying. So why does the 340 you are talking about matter more than the 400 that I'm talking about? I agree with everything you're saying. So why are we moving any of them?
How can you testify here today -- a point of information. I'm trying to get clarity. How can you testify here today that the problem that you have and you need this tax is that we can't disrupt 340 staff members, but simultaneously ask us to approve a Facilities Plan that disrupts more than 340 staff members? I'm just trying to get a point of clarity.
So he's a point of clarification, Councilman, and I appreciate you and I honor you today, and you know that. You move the 340 adults that are now in schools, those kids will not have that math interventionist. They're not going to have that reading coach.
Those teachers from Lankenau, the counselors can go to the school -- they can go to Saul High School.
So can the 340. Every point you make about Lankenau, Robeson, Warrington, Overbrook Elementary. I'm making the same point --
I got to stop, Council President, because I'm not getting my point of information clear. So I'll move on. Thank you, sir.
Point of information, Councilmember Jim Harrity. Point of information, sir.
Since they brought it up. Point of information, right? Farming and environmental do not go together. Do you -- environmental people protest farming people sometimes. Do you understand? Methane, all kinds of other things. It's not always the same. And it's not interchangeable. The environment is the environment. Farming and small animal husbandry is something completely different. And that's what Saul is. So you're talking to putting at Saul, which is a farming school directed for small animal husbandry and avenues of that sort, and then throw environmental kids in there that are supposed to be studying something else, and the effects of the farm animals and the farming are going to affect their environmental studies. But again, I'm not a rocket scientist. Thank you.
I appreciate my colleagues. I'm -- I feel I'm not getting to the questions I want to get to, because I've got to say that I'm feeling the tone and the tenor today. And I know the school district just came. So I do want to ask a couple of large, big picture questions, which are; one, Uber and Lyft and other rideshare companies and package delivery companies are multi-billion-dollar corporations. Did you have any conversations with these entities about whether or not they would perhaps donate some money to our school district of Philadelphia? Did you have any conversations with them to ask whether or not when it starts to rain a little bit, that they wouldn't do surge pricing that would make somebody's ride three times the amount that it is? Would you -- did you have any conversations with them that when you had a ride that might take a little longer because you've got a wheelchair that they don't add some sort of fee on -- you know, some sort of a surge pricing onto that as well? The question is, did you go to the billionaires and ask for a little bit of support here before this happened? And my second question is going to be whether or not -- because we've talked to a lot of constituents in this process and a lot of colleagues. Is there a thought that we can offset just now some of this funding with the fund balance that we have which is millions of dollars?
Yeah. So let me do that second part first. So you know we have to do five-year plans to be balanced in each year of the plan, for the reasons I was talking about in my testimony. By the end of the plan, our fund balance is only in the 40 -- it's like 46 million. So we don't really have room in our fund balance to -- for this. In terms of -- we've had some conversations with Uber. The issue with their contributing money is that's not recurring and predictable money, which is what the district needs.
Okay. So just one more, by the way don't we have a fund balance of this year at 391 million now?
We do, but like you said, we have to do -- we have to do a five-year plan so that projects out for the five years --
Excuse me, Rob, real quick. Just a quick point of information. We're going to be pointing all day. MALE VOICE 1: I'm sorry.
Quick point of information. The fund balance is only that number if we approve the budget as is. As of today, the fund balance is over a billion dollars. Thank you, Council President.
This is a -- it's a good tag team day we're doing here today. I appreciate that. I also wanted to know whether or not there was any considerations for -- I'm kind of torn about this, I've got to say. There's a whole transit community that is looking for support for transit as well. And there's ways in which there's -- they've been fully left out of this conversation. And I -- have there been conversations and considerations for any other place that funding could go? And would you share your list of potential revenue generators, of which rideshare was on that list; would you share the entire list with Council?
So the first part about transit in our five -- proposed budget and five-year plan there's almost $900 million for SEPTA including our annual subsidy, zero fare, the SEPTA Key program. So there's a -- there's a substantial commitment to mass transit in the five-year plan already. On the list of proposed -- the list of options, we can get you something.
Thank you very much. I'm going to -- I'm going to do this; I'm going to stick in this round. And - but at the inquiry, Majority Leader Gilmore-Richardson. I'm going to as for the chairperson of the school district -- sorry it's the Chair of the Board of Education, Mr. Chairman Reginald Streater, to please approach the table. As well as the Superintendent of the School District of Philadelphia, Dr. Tony Watlington. I'm going to still stay in queue during this round. The Chair recognizes Councilmember Jeffrey J. Young, then Councilmember Jamie Gauthier, then Member Thomas. And I just want to -- just kind of put it into context. We kind of spared this conversation for you to also be here is based upon some numbers that we requested after questioning -- the questioning of Councilmember Curtis Jones Jr. regarding how much savings will the district save as it relates to the shutting downs of the schools that are proposed? What's the dollar amount, just for the record.
Thank you, Mr. President. So I didn't expect these witnesses to be here, but I'm going to ask questions based on that anyway. So we are asked to support a rideshare tax that is equal to roughly one percent of the school district's budget. Can you tell us what has the school district done internally to try to come up with this one percent before asking taxpayers to pay that additional one percent?
Thank you for being here and apologies for not being in a suit. I was expecting to be here tomorrow and took time from my day to day because the Council President himself asked me to be here, and I respect you. We have a really great working relationship. So if my answers aren't as full as they will be tomorrow, I will do the best that I can with what I have in my head. That being said, before Dr. Watlington answers this question. We have a $300 million budget shortfall. The Board of Education and Dr. Watlington have presented for the last five years a pie chart that clearly shows a deficit, a looming deficit, that was coming and signaled the type of changes that would have needed to be made as well. From my understanding, the Clayton Center, which is the organization -- the part of the organization that services and -- our schools is half the size it should be for a district this size. It's my understanding Dr. Watlington is implementing a hiring freeze as well. And Dr. Watlington it's my understanding, you will obviously add me to the bone to that. There's already been some work internally to try to save as it relates to not renting out spaces and spaces instead of using spaces in the district for things like professional development and things like that. So that's the problem we're having. And then I heard, when I came in, Councilmember Rue Landau talk about the $1.2 billion of being -- of being historically underfunded as well. So again, we are pushing a boulder up a hill with no shoes on, sliding as we can, trying to get this thing up the hill. And any amount of money that can help us to protect the positions and things like that will be helpful -- be helpful for the school district of Philadelphia. But Dr. Watlington, the time yours.
Thank you, President Streater. Good afternoon, Mr. President, members of council. And Councilmember Young, we've taken several steps to address the $300 million structural deficit. On the one hand, we are making significant cuts to the tune of 130 positions in the central office. It is starting there because we want to do everything we can to protect the classroom. I will say to you, No. 2, we're taking a look at all of our contracts in the school district to cut where we can. Three, we're taking steps like we no longer use the Pennsylvania Convention Center for principal meetings; we've made Strawberry Mansion High School our professional development center. We are curtailing staff travel, including the Superintendent. And instead of sending four teachers to a reading conference, we may just send one, or we may send nobody and just bring professional developers to the school district. We're also looking at every opportunity for efficiencies that we can find in the budget. I do want to note that when we had the COVID dollars from 2020, 4 when the pandemic hit 2021 through 5 20 -- through September 2024, we 6 didn't have to make cuts because we 7 had a much higher funding level. 8 The reason we've got to 9 make cuts now, and this is 10 completely separate from the 11 Facilities Plan. There are two 12 separate issues on the table as I 13 see it. The structural deficit -- 14
We 15 don't see it that way. So I just 16 want to put -- make that make that 17 clear. We don't see it as two 18 separate -- two separate things 19 because the pot of money is still coming from the same place.
But that's actually not accurate. You have a capital budget, and you have an operating budget, right? A percentage of our operating budget can be used to bar up -- to borrow as it relates to our -- as it relates to debt service. They are two different issues. One issue is 70, 80 years of deferred maintenance, and the other is of reoccurring things that we have to do to support student learning outside of our buildings. They are different topics; they are different situations.
So thank you for that. So the City Controller mentioned that the transfer of the percentage from the millage shift and plus some increased revenue from the state made up for the COVID losses, right? This is from the City Controller. Can you explain to us if this is -- is the City Controller accurate here in this assessment, in this statement? Or is there something that she's missing when this was issued back in August?
Councilmember Young, I think it is accurate and appropriate to say that changes in the millage rate helped to offset some of the funding that we no longer have. Just -- I would just note for the record that this district received approximately $1.8 billion from the period 2021 to September 2024. Once all those "once in a lifetime opportunity," COVID 16 dollars, are gone, we are unable to 17 completely make up that revenue 18 shortfall. 19
Can I add briefly that the Board of Education with the use of the COVID dollars often had to come here to City Council and defend our being tight fisted with the -- with the fund balance and things like that. Because we knew this day was going to come and we strategically used our resources in a way and had to tell the babies no 8 when we wanted to say yes, because we knew at one point we're going to be here when those funds run out and have to answer these questions. While also trying to communicate as every year coming before City Council at our meetings as well, there is a huge structural deficit issue coming as well. That's not included -- that's not the same as the facilities issue as well. So I just want to also put that on the record that the Board of Education has been good stewards of public dollars. We tried to support learning and sometimes we've gone against our own willingness to kind of not go into the fund balance to do things such as -- that made sense, that matter, that have been requested by City Council. Well, I'm happy to go into that list as well if needed.
So over the past couple of years so the school district has dipped into the -- its fund balance in order to kind of maintain itself, it seems like. So that deficit -- knowing that you'll have this type of structural deficit, what did you do internally to try to avoid having this $300 million deficit?
This is -- I'm happy to answer that question. So there was a -- there was a strategy within the strategy. The Board of Education, Superintendent, Dr. Watlington and Dr. Hite invested in student learning because there was a nationwide strategy to not just use the funds for capital investments, of which we actually did use those funds to build facilities, add drinking water, clean drinkable water in our facilities and things of that nature. But the board also doubled down on student achievement. And the strategy was, had the last election gone a little differently, that perhaps those funds, those COVID funds, that we -- that we would have got from the federal government would have been reoccurring. But as we all know, elections have consequences. And we decide -- we thought that strategy would have been a more prudent strategy, not just for Harrisburg, but also for the federal government. And we can show you right now with data. I know it's not the gains we want to have, but it's about student achievement. And we believe that in addition to all of the things we're talking about here today, it's important for our babies to know how to fish. We want to protect legacies. I know the facilities issue is in the room. We want to protect. I'm from Germantown, my high school closed. What I'm most appreciative of is the education that I had that allowed me to be at work today as an attorney and come here because I have the ability to do so to come and testify before you. That's what we're trying to protect here. We're trying to balance all the interest, but at some point, we are -- we are at our knees, and we have to do something about it, because if we don't do it, somebody is going to do it to us.
Member Chairman -- I would like a point of information, Mr. Thomas.
Again -- I'm just confused again, and I just need clarity. So I'm listening to Councilmember Young's questions. I listen to the Chairman's and the Superintendent's answer. Earlier today, Mr. Dubow told us that the reason that we didn't -- we seen that big jump from cents to a dollar was 14 because they didn't know how bad 15 the deficit was. That's what we 16 were told earlier today. 17 And now the board 18 President just told us for the past 19 five years he has been making noise 20 about this issue. The board President just said he knew this day would come. I'm confused; I need clarity. How is it that they knew this day would come, and they've been asking for this and screaming about this for five years, but we were just told earlier today that the other side said they didn't know how bad the deficit is? So listening to the response to questions earlier compared to the response to Councilmember Young's questions there, I'm just confused and I'm asking for clarity. Did we know this five years ago, or did we just find out?
Knowing that there's a deficit isn't the same as knowing exactly what the board and the district is prepared to do in order to cover the deficit.
No, I understand what you're saying. You saying you knew.
No, no. 13 What I'm saying is I knew that we were going to have a deficit.
But I didn't know that Dr. Watlington was going to be in the kitchen cooking it in a way to try to figure out a way to cover the deficit in the way that he did.
But that doesn't answer my -- that that doesn't give me my clarity. We were told earlier today that they just found out about this problem, which is why it went from cents 9 to a dollar. That was the response 10 to a question earlier today. 11
12 So we're going to ask for a 13 response from Mr. Dubow. 14