Philly’s Schools Need To Be Funded. The Proposed Rideshare Tax Isn’t the Way To Do It.

The School District of Philadelphia faces a $300 million structural budget deficit. That number is not new, and neither is our habit of reaching for whatever revenue lever seems most convenient in the moment. The latest example is a proposed flat $1 fee on rideshare trips, a policy that, whatever its revenue potential, raises serious questions about both its economic logic and its fairness.

Let's start with what we know about how taxes like this actually work. Sin taxes, which are designed to disincentivize certain behaviors, can be effective at what they set out to do. Philadelphia's Beverage Tax, enacted in 2017, is the clearest local example. Within a year of its implementation, sales of taxed beverages dropped 38%. If the goal was to reduce consumption of sugary and artificially sweetened drinks, the data suggest it worked, even accounting for the significant uptick in cross-border shopping that followed.

But that logic cuts against the rideshare fee. If a tax is effective at disincentivizing behavior, then applying that model to rideshare trips is a problem, not a feature. We are not in a moment when discouraging people from using rideshare services makes sense. The threat of SEPTA service cuts have become a recurring cloud hanging over region. The Federal Reserve recently called attention to a national labor market that is essentially stagnant, inching us toward net zero private sector job growth. Corporations are continuing to trim workforces in the name of efficiency and thanks to unchecked technological advancements, pushing more Americans into gig economy work, which includes rideshare driving. A policy that suppresses demand for ridesharing does not exist in a vacuum. The potential macroeconomic externalities seem to be getting very little consideration here.

Then there's the question of how this fee has been characterized. Director of Finance Rob Dubow called the proposal a progressive tax, a claim that claim doesn't hold up. The Tax Foundation defines a progressive tax as one “where the average tax burden increases with income; where high-income families pay a disproportionate share and lower-income taxpayers carry a smaller burden.” A flat $1 fee hits every rider the same regardless of what they earn. That's not progressive taxation. By definition, it's regressive.

None of this changes the underlying reality: our schools are chronically underfunded, and students should not bear the cost of a structural problem that existed long before they walked through the door. So the question remains: if not a rideshare fee, then what?

Here are a few ideas worth serious consideration:

Tiered code enforcement fines on blighted, non-owner-occupied properties. A fine structure where penalties on properties with outstanding violations escalate significantly over time, with a dedicated share of collected revenue going to the school district. This could generate meaningful revenue while targeting those who are extracting value from neighborhoods without maintaining them. By focusing on non-owner-occupied properties, this approach tries to sidestep the risk of burdening lower-income residents and historically marginalized communities, while simultaneously contributing to neighborhood beautification.

Prioritizing delinquent property tax enforcement on absentee-owned blighted properties. This has historically not been a priority. It should be.

Enforcing the backlog of building code violations tied to absentee landlords. Councilmember O'Neill has highlighted that more than 62,000 building code violations reported in the last five years are connected to absentee landlords. That is an enormous and underutilized enforcement opportunity.

A commercial hauler licensing and surcharge program. Haulers operating in the city would be required to carry a license, pay into a remediation fund, and face license revocation for violations. This creates both accountability and a new revenue stream.

Directing a share of dumping fines to the school district. A straightforward reallocation that ties environmental enforcement directly to educational funding.

Allocating a percentage of Land Bank property sale proceeds to the district. Specifically in higher-value neighborhoods, where sales prices and profit margins reflect a real opportunity for meaningful contribution.

Re-examining the realty transfer tax allocation. A portion of the realty transfer tax currently directed to PHDC could potentially be redirected to the school district, particularly given that PHDC has historically run budget surpluses.

A municipal business licensing surcharge on skill game operators. These machines are disproportionately concentrated in lower-income neighborhoods, effectively extracting money from the communities that can least afford it. Our existing licensing and inspection infrastructure could be leveraged to impose and enforce a surcharge that channels some of that revenue back into the city's schools.

None of these proposals are simple. I’m sure many, if not all of them, would face opposition. The School District’s $300 million structural deficit is real. The urgency is real. But urgency cannot be a substitute for getting this right.