March 05, 2015

Nutter's budget proposal: $100M more for schools

By Lane Blackmer
PhillyVoice Contributor

Thom Carroll/for PhillyVoice

Former Philadelphia Mayor Michael Nutter is now a senior advisor and consultant for Green Leaf Medical, a cannabis company with its eyes on South Jersey.

Mayor Michael Nutter formally proposed a 9.3 percent property tax hike in his final budget address on Thursday morning — saying the additional revenues would fund a new, recurring $100 million commitment to city schools.

Nutter's proposal comes after initial reports that he would do so — which caused much disdain from Philadelphians, particularly after Gov. Tom Wolf's proposal to lower property taxes statewide by $3.8 billion. Wolf's proposal would reduce the average homeowner's taxes by 50 percent.

RELATED STORIES: Nutter seeks property tax increase to fund schools

Joel Naroff, president of Naroff Economic Advisors in Bucks County, said it is “too simplistic” to deem a property tax increase as bad.

A property tax increase will raise the cost of living and business in Philadelphia, Naroff said. But if the revenue generated is used in a way that stabilizes the education system, it could encourage middle-income households to remain in the city, ultimately boosting the city’s tax base.

“Will the money you raise be spent in the way that in the long term brings benefits back to the city?” Naroff said. “That’s where the debate should rage.

“The value, the validity and the cost of [Nutter's] proposal really depends on the returns on the expenditures,” Naroff said. “… That’s what the debate has got to be about, but it won’t be.”

Naroff also said comparing the property tax proposals submitted by Nutter and Gov. Tom Wolf is an apples-to-oranges comparison.

Wolf has proposed restructuring Pennsylvania’s tax system by lowering property taxes and increasing the state income and sales taxes, among other changes.

Nutter doesn’t have that luxury, Naroff said, noting the mayor has limited revenue sources to fund his needs.

“He’s running out of sources, there’s no question,” Naroff said. “But he’s got huge expenditure needs. He’s just moved in that direction.”

Nutter acknowledged that while his proposal is unpopular, the city's school district is a higher priority for him, philly.com reported.

"Let me say very clearly, I don't want to raise your taxes, but I do want to educate our children," Nutter said. "I don't want the next generation of Philadelphians living under the burdens of poverty and violence, without the opportunity to succeed."

Majority leader and 4th district Councilman Curtis Jones, Jr. said he thinks alternate options may be more viable, according to CBS Philly.

“Every year we hear there are no other options, and every year we find ways to get it done,” Jones tells KYW Newsradio. “We are going to look at other ways to do it, because quite honestly, after AVI (the city’s “Actual Value Initiative”), after several other tax increases, some of my members will find it hard to sell in their districts.”

Meanwhile, Philadelphia Public Schools Superintendent William R. Hite Jr. told philly.com Wednesday that he was "elated" by Wolf's proposal, which would give the district an estimated 13.8 percent increase in state funding. The district, he said, has been suffering since drastic cuts in 2011.

"Everybody should keep in mind that this doesn't make anybody whole from the 2011 cuts," Cooper said. "There's still a long way to go. I would hope the legislature understands they're still in the process of repairing the damage."

Staff reporter John Kopp contributed to this report.

Lane Blackmer
PhillyVoice Contributor