Council Bill Would Extend 1-Cent Sales Tax

Revenue would shore up schools, underfunded pensions.

The Inquirer reports that City Council has introduced a bill to extend a temporary 1-cent sales tax, this time to shore up underfunded schools and the city’s faltering pension system.

In the first year, the bill would devote $120 million to the schools, money the district has been counting on to help close a huge funding gap. Any extra revenue would go to the public-employee pension system, which is about $5 billion underfunded.

But over the next three years, the pension system’s share of the revenue generated by the additional penny in the sales tax — which in 2015 is expected to bring in an extra $137 million – would steadily increase, until the fourth year, when it would be split evenly between the schools and the city.

The plan needs approval from the Republican-controlled Pennsylvania General Assembly.

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  • Ken Keppol

    Why not wait until after the Gubernatorial election? Some of the candidates want to add a tax to the frackers to increase school funding. There might be an increase to minimum wage which will also increase the tax base, more wage tax and increased spending at the registers. In the meantime we should make more hard choices to reducing spending. Why do Council members get cars and drivers? We should reduce our fleet of cars starting with them. Buy out city employees on long term comp and bring new people in to get work done instead of paying 2 people to do 1 job. Are we still collecting wage tax from atheletes from out of town when they come here to play? I make all my major purchases in Buck’s county to save that 1%. Last year I remolded my entire first floor. I bought everything in Bucks County, flooring, tile, cabinets, windows, doors, plumbing and electric supplies, appliances, TV’s, stereo etc. The city lost about $1800(@7%) in tax revenue right there. The local retailers lost about $30k! Does the city even know how much tax revenue/business crosses the borders each year? It’s a bad tax, let it expire!

  • PJ

    hopefully this bill is DOA in the legislature…city needs to get the humps in DC33 and 47 on 401k’s. pension problem solved