Mayor Cherelle Parker is quintupling her proposed rideshare tax in a bid to save 200 public school jobs on the chopping block as a result of the School District of Philadelphia’s $300 million budget deficit.
On March 12, Parker unveiled a spending plan that incorporated a new 20-cent fee on trips originating within city limits. Now, she has upped that recommendation to $1 and wants it enforced beginning in January 2027, six months earlier than planned.
Parker said she felt compelled to step in after hearing that the district intended to cut 340 school-based positions to balance its financial books. Of particular concern, she added, was the potential for larger class sizes.
“When class sizes go up, school safety issues can begin to worsen, and programming that we are relying on right now to assist the district, all of it gets stopped dead in its tracks,” the mayor said at a news conference Monday, surrounded by students, district leaders, public education advocates and union officials at Delaplaine McDaniel School in Point Breeze.
The Parker administration estimates that the tax will generate $48 million a year, up from less than $10 million under the initial 20-cent proposal. Parker said it would be the largest new recurring revenue source for the school system from City Hall since a sales tax hike and cigarette fee went into effect more than a decade ago, amid an even more severe funding crisis for the district.
While Parker’s team and her allies have suggested that the multibillion-dollar rideshare giants could absorb the fee, Uber spokesperson Jazmin Kay told Metro that the tax “will be passed on directly to riders who will pay more on each ride and will directly hurt hardworking drivers who will see their incomes cut as a result of reduced demand for rides.”
“Philadelphia is already facing mounting cost-of-living and mobility challenges, and this proposal would intensify both by increasing the price of everyday rides that many working residents rely on to get where they need to go,” a Lyft spokesperson said in a statement.
Kay noted that rideshare firms are already subject to a 1.4% fee through the Philadelphia Parking Authority. The Mayor’s Office said the proposal is consistent with levies applied in New York, Chicago and Washington, D.C.
Parker said getting the fee through City Hall would not be easy, recalling the fierce lobbying battle over Philadelphia’s soda tax, which went into effect in 2017.
“I’m not responsible for how the company decides it wants to adjust to this $1 tax,” the mayor added. “I’m going to choose our children and the public who make public education work every time, no matter how hard the decision making.”
City Council on Tuesday began formal deliberations on Parker’s $7 billion recommended operating budget, which also calls for a separate 25-cent retail delivery tax to cover pothole and road repairs.
One of the body’s more progressive members, Rue Landau, said she was “encouraged” by the mayor’s rideshare proposal.
“Philadelphia has always embraced innovation, and that innovation comes with a responsibility to contribute to the communities that make it possible,” Landau said in a statement shortly after Monday's announcement.
Lawmakers are scheduled to hold hearings on various aspects of Parker’s budget through early May. Council and the Mayor’s Office must reach an agreement on a finalized plan before the new fiscal year begins July 1.
Earlier this month, SDP Superintendent Tony Watlington Sr. detailed his recommendation to cut $225 million from the coming fiscal year’s budget to address the deficit, which district officials say stems from the loss of federal COVID-19 relief dollars and historic underfunding.
No layoffs were contemplated, though Watlington alerted principals that 340 teachers, student climate staff and other positions would be slashed, with those impacted being moved to other vacant slots.
If the rideshare tax is adopted, the district will only need to reassign 100 jobs, Watlington said. District officials said an additional 40 positions are able to be funded through cost-cutting measures elsewhere.
“We know that we will still have some pain points,” Watlington said.
The district still intends to eliminate 220 substitute teachers, institute a central office hiring freeze and reduce spending on contracts and some programming, according to school officials.
Principals are being instructed to proceed with school budgets sent out in mid-March. Positions will be restored if and when the rideshare tax is approved through the municipal budget process, district representatives said.
In addition to paying for salaries, $3 million in rideshare tax revenue would be used to provide free SEPTA cards to school employees with lower incomes, such as maintenance and climate staff.
The tax is also set to support a three-year PPA pilot initiative to waive late fees for qualifying drivers who have an expired license or registration due to unpaid parking tickets.
“This is not just a get-out-of-your-parking-tickets-for-free pass,” Parker remarked. “It’s not Monopoly.”
Parker clarified that the rideshare fee “has absolutely nothing to do with” the district’s hotly-debated plan to close 18 schools, which is currently being considered by the Board of Education.
“What we can acknowledge is that it's a painful, painful process,” she said. “And they’re doing the best they can.”
The mayor indicated that she believes Harrisburg lawmakers want to see that the school system is maximizing efficiency before approving any additional funding for the district.
