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The (Rashomon-like) Inside Story of How City Council Came to Pass a Property Tax Hike on Thursday
On Thursday, as you hopefully know by know, City Council approved a small hike in property taxes and parking fees to help raise extra money for the Philadelphia School District, which faces a massive budget shortfall. The vote occurred after a marathon 12-day series of Council sessions, interrupted by hours-long recesses during which Council members negotiated behind closed doors. Here is the Rashomon-like story what you missed.
The (Rashomon-like) Inside Story of How City Council Came to Pass a Property Tax Hike on Thursday
On Thursday, as you hopefully know by know, City Council approved a small hike in property taxes and parking fees to help raise extra money for the Philadelphia School District, which faces a massive budget shortfall. The vote occurred after a marathon 12-day series of Council sessions, interrupted by hours-long recesses during which Council members negotiated behind closed doors.
The facts of what transpired behind those doors aren’t in much dispute, but their meaning is — kind of like the film classic Rashomon, in which various narrators tell the same story as they perceive it, making the “truth” difficult to pin down.
Here is the Rashomon-like story of what you missed.
The Big “?”
It’s hard to believe, but the truth was this: as hundreds of people — lobbyists, school kids and educators, union members, politicos, labor activists (and at least a dozen reporters) — poured into City Hall on Thursday, clogging the metal detectors outside City Council’s chambers, a plan was not yet in place.
Despite the fact that School District’s enormous looming budget gap had been known to anyone paying attention for months, and despite the fact that a clear majority of City Council members favored helping provide more funds to the ailing district, and after weeks of hearings (mysteriously — or suspiciously — postponed until after the city’s primary election season) on the School District’s troubled budget — the city’s legislative body had yet to arrive on a decision about what it was going to do about it.
Mayor Nutter had offered two alternatives: a 10% hike in the city’s property tax, or a tax
on sweetened beverages — his favored piece of legislation, and which he had pushed hard for, and failed to get passed, last year. Either, the mayor said, would raise something just shy of $100 million for schools.
City Council had come up with a few of its own alternatives: a 3.5 mills (3.85 percent, according to city finance director Rob Dubow) property tax hike combined with higher parking fees and some money from the city’s reserve fund, proposed by Councilman Darrell Clarke, and a proposal by Councilman Bill Green to take the bulk of the money from the city’s reserve fund. These proposals would raise less money — somewhere in the ballpark of $50-60 million, about half of what the District had officially requested.
Mayor Nutter opposed both of Council’s plans — but especially that offered by Green, calling it fiscally irresponsible. The well-known personal anisaysmosity between the two, no doubt, didn’t improve the Mayor’s opinion.
Nine votes are needed to pass a bill out of City Council, but twelve votes are needed to override the mayor’s veto. On Thursday morning, the fate of any of those four options was uncertain: at least seven or eight votes (ten, according a source within the administration, but which CP was unable to confirm elsewhere) had been lined up for the mayor’s “soda tax,” but there was also a substantial number of votes for a property tax alternative to soda. Whatever heat Council members had taken over a property tax hike last year, they were taking plenty now from the powerful beverage lobby that had been raining money on Philadelphia since the mayor reintroduced the tax.
Despite reports all week that soda was “fizzling” among City Council members, the mayor’s tax could possibly have passed on Thursday, by all accounts. A 9 or 10-person majority had been lined up, and, as Council recessed in the early afternoon to allow last-minute negotiations, these 9 or 10 appeared ready to vote “yes” on soda — not at the two cents per oz rate proposed by the mayor, but at a compromise one cent per ounce, with the mayor kicking in about $10 million from the city’s reserve — a proposal which would have raised about $56 million according to the administration (a number disputed below).
But that majority quickly fell apart. The reasons aren’t entirely clear (or, at least, weren’t made entirely clear to this reporter). All sources point to heavy last-minute lobbying by Big Beverage and its union allies. Some sources inside City Council and within the administration cite last-minute horse trading among Council members themselves.
But another reason for the falling-apart of the soda plan appears that during discussions over the details of how to implement it, the idea of hiking real estate instead had re-emerged as a viable 9-vote alternative for the first time that day. The scales had suddenly tipped, and tipped quickly, thanks, according to several sources, to at least two less-likely votes: that of Republican Councilman Jack Kelly, who would cross party lines to vote for the bill; and that of Councilman Bill Greenlee, who admitted to City Paper that his vote had been extremely reluctant: “It took us a long time to agree to the property tax increase,” he acknowledges, saying school funding was ultimately “just too important.
Councilwoman Maria Quinones-Sanchez, meanwhile, — one of the members of Council pushing the hardest for increased funding, especially to preserve “accelerated” schools for the most at-risk students and which were threatened to be cut in the district’s revised budget — had long favored a property tax hike over other alternatives, but had reluctantly agreed to be a ninth vote on soda if it was the only way to secure school funding. Now, it was not. Within twenty or thirty minutes, Council was ready to pass a property tax hike instead.
*
The Appeal
Mayor Nutter, by all accounts, was not happy: he wanted the soda tax, and began to lobby hard, calling upon Council members whose votes the administration had counted upon — including Council members Blondell Reynolds Brown, Curtis Jones, Wilson Goode, and Maria Quinones-Sanchez — to change their minds (again) and re-secure their colleagues’ votes.
When that didn’t happen, Mayor Nutter traveled in person to City Hall’s fourth floor to make another appeal for soda inside the office of Councilman Curtis Jones, Jr., where had gathered a few Council members more favorably disposed to the mayor’s plan and who had helped lead the charge within Council to pass a tax for schools.
“It was soda, soda, soda in there” affirms Councilwoman Blondell Reynolds Brown, a staunch advocate for increased school funding and who had been a solid yes-vote on the soda proposal.
Some members of Council resented the hard lobby. For one thing, by some accounts, the mayor seemed to be lobbying for less, and not more money for schools — the soda tax would have brought in $60 million in the first year, at 2 cents per ounce, according to the administration; half of that would be $30 million, $7 million less than the projected property tax hike revenues.
Administration officials, on the other hand, hotly dispute this, citing a report suggesting a lower soda tax rate would have deterred less sales and brought in an extra $10 million. It was Council, they insist, that was arguing for the lower revenue.
Others accuse the mayor of fighting primarily for a personal, legacy win — and undermining the hard effort it took to secure 9 votes for anything. The mayor, they say, failed to credit on-the-fence Council members for being willing to raise a tax at all.
In any case, the Mayor left Jones’ office disappointed: the soda tax, he was told, was off the table.
Nutter next proceeded to the office of Council president Anna Verna where, after calling a recess in Council, Verna and about half the members of City Council had gathered. The scene inside was not, according to various sources, a very pleasant one. With soda dead, the mayor was now arguing for a 5% raise in the property take instead of the 3.5 mills proposed by Councilman Darrell Clarke. When several council members balked, the mayor was not happy.
According administration sources, Nutter’s beef wasn’t just the amount of revenue but a perceived flaw in the details of Clarke’s plan, which would have been a city, versus School District, tax (in the end, Council would amend the mayor’s property tax plan with Clarke’s rates and not vice versa). What’s more, the difference between 3.5% and a 5% hike — or something in between — was not great and might make the difference between being able to save certain school services or not.
But others say the anger was personal. Clarke and Councilman Bill Green are political rivals of the mayor. Clarke is widely expected to run for Council president against Councilwoman Marian Tasco, Nutter’s favorite. The possibility that Council would vote on Clarke’s, and not the mayor’s property tax bill was, some sources speculated, not exactly perceived as an olive branch. The animosity between Green and Nutter, meanwhile, is well-known — and a possible veto-proof majority in favor of Green’s proposal to take more from the city’s reserves had, at one point at least, loomed over discussions.
It was a classic Rashomon moment: Some sources describe Nutter as bitter about losing soda and unwilling to compromise or cajole Council members into accepting a (slightly) higher tax hike. Others describe the mayor as having done the right thing by walking up to the fourth floor, and describe Councilman Bill Green, not the mayor, as being a wet blanket during negotiations. A few sources seem to describe both at once.
After a short interval, Nutter walked out: exactly in what context isn’t clear, but unhappy — angry, say several sources.
*
The Eleventh Hour
Between about 5 and 8 p.m., the mayor had little communication with Council.
Instead, Council recessed for the duration, grabbed munchies, and hammered out the details of a school funding package and, around 8 P.M., presented it to Superintendent Arlene Ackerman and School Reform Commissioner Robert Archie, along with a list of “priorities,” — conditions, might be another word — for how it should be spent including transportation, maintaining class size reduction, and accelerated school funding.
School officials were “very receptive,” according to Councilwoman Reynolds Brown, and the list was circulated to Mayor Nutter at around 8 P.M — at which point several Council members, preparing to go vote, received a call, via speakerphone from the mayor, who said they’d left an $11 million hole in their plan.
The basis for the call, explains Finance Director Rob Dubow, was that Council hadn’t included in their list of priorities $11 million in various costs for city services the District had planned to transfer to the city. According to the administration’s math, the school district could not deliver on all the “promises” set out in the agreement if it had, as set forth in a memorandum of understanding between the city and the district, to add the $11 million back to its budget. The services Council wanted to keep might have to be cut.
It was another Roshomon moment: some Council members saw the call as a veiled threat or a last-minute attempt to undermine the Council’s vote. Administration officials, on the other hand, say the mayor was just doing his job — “I don’t really think he was saying, so go back and redo your bill,” explains Dubow, “I think he just wanted to make sure what they just discussed the district, that their expectations weren’t too high.”
The mayor’s warnings didn't seem to slow proceedings down: While he was still on the phone, some Council members were already trickling out of the room and into City Council chambers to vote.
As they did vote, a strange thing happened — Council was suddenly being heckled by school kids and advocates, the very constituency they were now voting to help out, as they saw it.
Several sources suggest that the cause of the sudden booing was word, circulated by administration officials, that school programs — notably, accelerated schools — would not be fully funded by the vote. Mayor spokesman Mark McDonald was not aware of any such message put out by the administration. In any case, some Council members spent time after the vote reassuring the school advocates. One advocate, contacted later, declined to comment on the episode.
Over the course of the next week, the city, Council, and the School District will have to iron out whether and how much of that $11 million needs to be replaced. Whether the mayor's late objections were punitive — or whether Council had, as it did when it passed a 9.9% and not 12.1% property tax needed to fill the budget last year — is a question of perspective.
The Moral?
The press quickly characterized the ultimate vote as a political defeat for the mayor. He had gone to the matt for his soda tax and, very publicly, failed to get it.
Not surprisingly, the administration has offered another take: that the highest goal of school funding was accomplished in partnership with City Council.
Some Council members have risen to defend not only their vote but the mayor’s role in the process: “He rolled up his sleeves, came to the 4th floor, met with Council members, and ultimately got [the property tax hike],”
Councilwoman Reynolds Brown. “I think that’s really worth something.”
“What we saw transpire over the past couple of weeks was a real attempt by my colleagues to give the mayor additional resources so that he can go to Harrisburg and secure more for the schools,” says Councilwoman Maria Quinones-Sanchez, adding: “This is a victory. I think [Mayor Nutter] just has to learn to claim it that way.”
To be sure, the mayor and his staff have publicly done so. Spokesman Mark McDonald emphasizes that “We’ve come a long way, and we’ve achieved raising millions of dollars for the School District.”
Are all the good feelings professed after such a heated day just spin? Maybe — but, ultimately, that depends on how Council members and the mayor chose to see it themselves going forward. The next hurdle — and it may be a high one indeed — is to secure state funding for the district, for which the city will need to present a unified front, however unified it is or isn’t. And truth, sometimes, is in the eye of the beholder.
Appreciate this piece, but I think you left off a critical component and that is the lack of faith of city council in the leadership of the School District. That had equal if not more weight than the impact of the soda lobby. I do think that had we had leadership that didn't shake the faith of so many in City Hall that we could have seen a soda tax and a lot more money put on the table.— Helen Gym- 1, i live— LJM
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