Future of Philadelphia Cigarette Tax Uncertain Despite City Council OK
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By Mike Dunn
PHILADELPHIA (CBS) — Philadelphia City Council today gave final approval to Mayor Nutter’s plan for a two-dollar-a-pack city tax on cigarettes.
But whether the tax ever becomes reality is still unclear.
The vote was unanimous for the new cigarette tax, which would take effect next January and bring an estimated $45 million to city schools.
Tenth District councilman Brian O’Neill says he had no qualms about voting yes.
“Tobacco is a real bad habit, but at least when you’re buying your pack of cigarettes you’ll know you are helping the kids in the schools,” he told KYW Newsradio today.
But the state legislature has yet to grant the city the authority to impose the tax. Without that, even Mayor Nutter’s expected signature will not be enough to let the tax go forward.
A spokesman for Pennsylvania state senate majority leader Dominic Pileggi says it is “possible but not certain” that the senate will take up the matter before it adjourns for the summer.
The same applies to Mayor Nutter’s proposal for a hike in the existing city liquor tax; Council members have yet to even vote that bill out of committee.
First District councilman Mark Squilla says he is hesitant to raise the drink tax because he believes the city does a poor job at collecting it at the current level, and a hike would only penalize those who do pay.
“If we would collect another 20 percent of that tax, another 30 percent of that tax, that would increase another 20-30 million dollars to the school district alone,” Squilla says.
The Nutter administration says the collection rate of the liquor-by-the-drink tax tops 90 percent. But Squilla and other councilmembers say that rate applies only to those bars and taverns owners who report their sales, and they believe many do not report.
Nutter wants both the liquor and cigarette taxes to funnel an additional $90 million to the school district.
Council members say the cigarette tax alone, coupled with increased revenue collection, would meet the district’s request of $60 million.
Also today, councilmembers, as expected, gave final approval to a new property tax rate of 1.34 percent under the new assessment system dubbed “AVI” (Actual Value Initiative). And they set the level of the homestead exemption at $30,000.
Meantime, Council president Darrell Clarke amended a bill to allow for means testing when the city offers gentrification relief for the neighborhoods hardest hit by the new property tax assessments. The authority to do means testing still awaits state approval, but Clarke is optimistic that Harrisburg lawmakers will move ahead on that measure.