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Vote On Philadelphia Liquor Tax Unlikely Without Harrisburg Approval

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Mike Dunn Mike Dunn
Mike Dunn is City Hall bureau chief for KYW Newsradio 1060. He covers...
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By Mike Dunn

PHILADELPHIA (CBS) - City Council President Darrell Clarke says council is not likely to vote on a hike in the liquor-by-the-drink tax until they’re clear that Harrisburg has given them approval to raise the tax for the schools bailout.

City Council has already signed off on imposing a new tax on cigarettes, even though the state authorization for that has not yet happened. Council is unwilling, though, to cast a public vote on the liquor tax increase until the state okays it. That’s apparently because local tavern and bar owners are firmly opposed. Council President Darrell Clarke:

“The cigarette vote was 17-0. There was clearly a consensus for that. There may be a consensus for liquor, if we get state enabling legislation.”

And Clarke says there’s some resistance in Harrisburg to allowing a liquor tax hike because some state lawmakers believe the collection rate on the existing liquor tax is extremely low:

“There is this notion — and it’s all in Harrisburg — that we are under-collecting the current authorization for liquor-by-the-drink.”

Clarke and the mayor say the collection rate for the liquor tax is above 90-percent. Meantime, the spokesman for State Senate Majority Leader Dominick Pileggi says it is “possible but not certain” that the senate will take up the Philadelphia tax matters before it adjourns for the summer.

The mayor wants both the liquor-by-the-drink tax hike (from 10 to 15-percent) and the cigarette tax ($2 per pack) — along with heightened revenue collection — to bring an estimated $95 million extra to the school district. Council President Clarke says the cigarette tax alone, combined with increase collections, would be enough to satisfy the district’s original request of $60 million.

Wednesday was ostensibly the last day council could give initial approval to the liquor tax measure and still meet their deadline of final passage of all tax and budget bills of June 20th. It is possible that the lawmakers could extend the calendar by one week. Council members did give initial approval Wednesday to the new operating budget, and also a measure from Councilman Wilson Goode to revise the long-controversial 10-year tax abatement on new properties.

Under Goode’s measure, each abatement would be capped at $500,000, and the percentage of the abatement would decline gradually after the first five years. If given final approval, the plan would not take effect until next year.

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