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December 04, 2018

Corporate tax breaks cost Philadelphia's schools more than $60 million in 2017

New report indicates roughly $1.5 billion was lost thanks to incentives and subsidies nationwide

Schools Taxes
Stock_Carroll - The School District of Philadelphia, School Bus Thom Carroll/PhillyVoice

A school bus on North Broad Street.

The School District of Philadelphia lost $62 million in 2017 because of corporate tax breaks and incentives, according to a new study.

The report from Good Jobs First, a think tank based in Washington, D.C., examined data that was only recently made available. Thanks to a federal accounting rule which took effect at the end of 2015, municipal governments in the U.S. are now required to report how much money they lost on corporate tax breaks for development projects. 

"When costly corporate subsidies undermine local schools, elected officials are actually undermining their economic development efforts," Greg LeRoy, executive director of Good Jobs First, said in a release Tuesday.

Nearly 250 school districts lost at least $1 million in 2017, according to the report, and roughly $1.6 billion was lost by school districts across the country. Philadelphia’s $62 million figure ranked the second-most, behind a school district in Hillsboro, Oregon, which lost nearly $100 million.

The news comes just more than a year after the city regained control over the school district with the dissolution of the School Reform Commission, which formed in 2001 because the school district was “financially distressed.”

Pennsylvania ranked seventh among all 50 states in total losses due to tax abatements. The report examined 414 school districts across the state and found more than $98 million lost due to of corporate tax breaks.

As Philadelphia councilperson-at-large Helen Gym noted earlier this year, the city missed out on roughly $160 million city-wide in 2017 thanks to tax breaks and abatements:

The report estimates that, were the corporate tax abatements and breaks cut back and the expected tax revenues invested in hiring teachers, the 10 states (which includes Pennsylvania) most affected by losses could hire more than 28,000 new teachers.

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