Depending on who you ask, Silicon Valley corporations or everyday Philadelphians struggling with rising costs came out ahead following a hotly contested municipal budget process.
City Council is poised to adopt a $7.1 billion spending plan this week that does not include Mayor Cherelle Parker’s $1 rideshare tax or two other levies she sought to impose to fund homeless services and pothole repairs.
Proceeds from the rideshare fee were slated to go to the School District of Philadelphia to preserve 340 jobs that had largely been funded through federal pandemic relief dollars and were on the chopping block as the school system tries to tackle a $300 million deficit.
Lawmakers pulled together $48 million from other line items in the budget – an exercise that took only two or three hours, Council President Kenyatta Johnson said. They also moved forward with Parker’s proposed tax rate change for cell towers, which is expected to net an extra $2.4 million annually for schools.
While the total revenue is on par with Parker’s rideshare tax projections, the district is still planning to enact the cuts, resulting in the elimination of nearly 150 teaching positions and dozens of counselors and climate staff.
No one is being laid off; rather, impacted employees will be transferred to vacant spots at other schools, according to Superintendent Tony Watlington Sr.
Board of Education President Reginald Streater, who appeared alongside Parker at a news conference Thursday, moments after Council granted preliminary approval to the amended budget, was adamant that he and his members adopted a plan to save those jobs only if the district received recurring revenue.
Council members indicated that they received the news in a letter sent out before the body’s session ended.
“For me, that’s very, very shortsighted,” Council President Kenyatta Johnson told reporters. “It doesn’t show leadership.”
The Philadelphia Federation of Teachers, which rallied in support of the rideshare fee, has since called on Streater and Watlington to reverse course and maintain the positions, at least for the next academic year. Arthur Steinberg, the union’s president, called the decision “deplorable and really absurd.”
Johnson and Majority Leader Katherine Gilmore Richardson said the one-time injection of funding could become permanent, if the Parker administration adjusts its five-year financial plan to accommodate it.
And, also on Thursday, lawmakers authorized hearings to examine new revenue options to support Philadelphia’s public schools.
“If staff gets moved and/or laid off, that’s not on us,” Councilmember Isaiah Thomas, chair of the education committee, said. “That’s a choice.”
School district leaders have not detailed how they plan to spend the additional $50.4 million from Council. A spokesperson only said, in a statement, that the money will “be used to continue the District’s focus on accelerating academic achievement.”
Parker, for her part, characterized the budget as a victory for Uber, which launched a six-figure campaign opposing the tax, and other technology industry giants.
“We just let billion-dollar tech companies play the city of Philadelphia and trick us into thinking that we were about to burden our constituents,” she said.
The mayor compared the battle over the rideshare fee to fights in Harrisburg more than a decade ago – when she was a state representative – over sales tax hikes and a cigarette levy that were ultimately adopted to pull the district out of a funding crisis.
Parker attacked the rideshare companies for utilizing independent contractors, rather than employees with health care and other benefits. She told reporters she would have more to say “very soon” about continued efforts targeting big tech, describing the budget failure as “Round 1.”
“I am not afraid of you,” Parker added. “We will continue working to ensure that you pay your fair share.”
Uber, which has dispatched lobbyists to City Hall in recent months, celebrated lawmakers’ rejection of the fee.
“More than 90,000 letters were submitted in opposition to the tax, sending a clear message that Philadelphians want affordable transportation options and oppose higher costs on working families,” the company said in a statement.
Parker argued that Council’s “one-time Band-Aid payment” would do little to address the district’s deficit and could actually hurt the public school system by increasing its mandatory contributions to charter schools.
She acknowledged that the proposal found scant support in Council chambers, saying that she was told that only three of 17 members were willing to vote for it.
Johnson said that there was “no support” for taxes in general, given rising gas, housing, grocery and health care prices.
“This is about individuals in the city of Philadelphia who are dealing with an affordability crisis,” he explained. “Overwhelmingly, our constituents said, ‘We do not want another tax.’”
That aversion to taxes extended to Parker’s recommendations to increase hotel and short-term rental levies, as well as a proposal to charge 25 cents for Amazon orders and other deliveries from large retailers.
The latter fee would have generated about $15 million, to be used for “pot hole squads.” A similar amount of revenue was projected from the hotel-and-rental tax hike and would have been earmarked to support Parker’s initiative to end street homelessness.
Legislative officials have suggested that existing budgetary resources can be used to address both issues.
MORE: Lessons from Philly's last wave of school closures in 2013
