Week in review: Tax breaks breaking Philadelphia’s budget


By PA Independent Staff

An audit showed that Philadelphia will need more than half a century to break even after offering a plethora of tax breaks through the state’s Keystone Opportunity Zone program.

Elsewhere, a state representative has proposed altering teacher seniority rules, a state senator has proposed more oversight over the so-called Obamacare navigators and drivers will be paying more to keep their cars on the road.

Here’s a look back at the week’s coverage:

Audit finds poor results, bad record keeping in economic development program

Tax breaks are breaking the budget in Philadelphia, according to a new audit.

City comptroller Alan Butkovitz released an audit last week examining the city’s Keystone Opportunity Zone program, which has been used since 1999 to give tax breaks to select parcels of land targeted for development in the hope of luring businesses to certain parts of the city.

The city has awarded more than $384 million in tax breaks to 617 businesses, but has recovered only $40 million from the program, according to Butkovitz.

LOOKING BACK: An audit found that Pennsylvania’s Keystone Opportunity Zone program is straining Philadelphia’s budget, while new fees connected to a massive transportation funding package went into effect this week.

“In short, each new job cost roughly $104,000 in tax credits,” said Butkovitz. “The City has done a poor job at maintaining records and there has been minimal effort to require verifiable annual reporting.”

Read the full story here.

Ending teacher seniority rules beyond Philly requires legislative action

The School District of Philadelphia has extraordinary power to suspend seniority rules, but effective, young educators elsewhere in Pennsylvania aren’t so lucky.

The state public school code enforces seniority as the basis for classroom personnel decisions. Some lawmakers want to change that.

With the new Educator Effectiveness System, Pennsylvania is in a position to evaluate teachers based on performance and move away from the old “last in, first out” system

Rep. Tim Krieger, R-Westmoreland, introduced House Bill 1722 to reform teacher tenure and furlough decisions.

Read the full story here.

State senator wants more oversight over health care navigators

Funded by a federal grant, the nonprofit Resources for Human Development has deployed 35 trained navigators across select Pennsylvania counties to help the most vulnerable residents enroll in Obamacare.

Laura Line is the corporate assistant director who oversees the navigator program for the Philadelphia-based human services nonprofit. She said the organization goes “above standard” by having employees carry identification and undergo FBI clearances before they begin guiding people through the enrollment process.

That’s the sort of practices state Sen. John Eichelberger, R-Blair, believes should be the norm for the so-called navigators, who are tasked with helping people secure health-care coverage under Obamacare. He has proposed legislation that would give the state more oversight over the navigators.

Read the full story here.

PUC chief calls for ‘safe harbor’ after spikes in electric bills

First came the bone-chilling cold of the polar vortex. Then came the humongous electric bills for many Pennsylvanians who had variable electric rates.

The spikes in electricity costs have left some residents facing bills that top $1,000 and state officials trying to make sure people aren’t caught off-guard again.

Robert Powelson, chairman of the Pennsylvania Public Utility Commission, wants to create a “safe harbor” for customers whose bank accounts were sunk by variable electric rates. He called for better customer notification procedures and a shorter waiting time for residents to switch electric suppliers.

Read the full story here.

Higher vehicle and driver fees kick in

Starting this week, you’ll have to pay a little more to keep your car on the road in Pennsylvania.

Vehicle registrations, drivers’ license renewals and dozens of other fees imposed by the state Department of Transportation increased Tuesday. The fee increases were one of the major funding components — along with an increase in the state’s taxes on gasoline — included in the $2.3 billion transportation infrastructure bill passed by the General Assembly last year.

Registration fees for cars and motorcycles are increasing by $1 on April 1, while registration fees for pick-ups will climb by $1.50. Further increases are planned for 2017 with annual increases tied to inflation in subsequent years.

Drivers’ license fees also increase by $1, to $22 per year, with further increases planned to match inflation.

But the bigger increases won’t come until July — that’s when the cost of a new vanity license plate will jump to $76, compared to $20 now.

Read the full story here.

Philadelphia schools awaiting taxes from city, state

The Pennsylvania state House won’t provide additional revenue for Philadelphia schools until the City Council approves higher sales taxes.

The school district’s new budget is counting on the revenue from the sales tax extension, but the council has yet to approve it. Instead, the city wants to split the revenue with the district and add a new $2 per pack tax on cigarettes.

The state government would have to sign off on the new cigarette tax, and House Republicans say that’s not going to happen.

“The city has not lived up to its word from last year’s agreement extending the sales tax,” said Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny. “There are and will be no plans to enact another tax on Philadelphians until they fulfill their own obligations.”

Read the full story here.

March revenue numbers paint bleak budget picture

Pennsylvania’s accountants better hope most people are waiting to file their taxes.

A long line at the post office April 15 would probably be a welcome sight for the state’s bean counters, who found the important March revenue numbers disappointing, even after the state gobbled up an $80 million payment from the Pennsylvania Liquor Control Board, months earlier than planned.

Pennsylvania pulled in $4.2 billion in general fund revenue last month, $20.7 million less than anticipated, according to Revenue Secretary Dan Meuser. That puts the state $96.3 million — or half a percent — below the fiscal year-to-date estimate.

Read the full story here.

Legal trouble grows for PA school board that shut down free speech

The School District of York City last month held a public meeting and restricted comment from students younger than 18. The solicitor for the school board told attendees it would hear no comments about New Hope Academy Charter School.

Sixty parents and students from New Hope have filed a federal lawsuit.

The district decided not to renew the school’s charter in 2012, which a state appeals board upheld. The school must close at the end of this year.

Read the full story here.