Cigarette Tax Stalled; School Funding in Danger

Derailed by dispute over hotel taxes, new five-year sunset provision.

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This is why you don’t count your chickens until they’re hatched: Yes, both the Pennsylvania House and the Pennsylvania Senate have given approval to bills allowing Philly to raise its cigarette tax by $2 per pack to fund local schools — but they haven’t approved the same version of the bill so far. And that’s turning out to be a big problem.

The House version ran into a Senate buzzsaw on Tuesday — with the upper chamber balking at adding provisions in the bill that would allow some Pennsylvania cities to raise their hotel taxes. Senators began amending the House bill (it now includes a five-year sunset provision on the cigarette tax) but it’s uncertain the House will return from its break to pass the revised version — which, if not would leave Philly in limbo — or whether, in fact, it would approve those revisions: Certainly, it seems House Republicans will resist approving the additional hotel taxes. Which means getting the two chambers to back the same bill may be difficult.




CBS Philly reports:

Superintendent William R. Hite issued the following statement regarding the amendment of the cigarette tax bill by legislators in Harrisburg:

“Today’s action to amend the School District-supported cigarette tax legislation throws us back into uncertainty. Adding the sunset provision to end the bill in five years removes urgently needed recurring revenue, which is extremely troubling given our $93 million deficit and the persistent increases in the District’s fixed costs. At full implementation, the cigarette tax was estimated to generate more than $80 million annually. Ending the tax in five years will exacerbate our structural deficit, complicate our long-term planning efforts, make it harder to access the capital markets and strip our schools of educational services and supports.

“With schools scheduled to open in less that two months, it is crucial that we secure the needed funding to support our students and schools. There is no clear timetable for House consideration on this amended bill, nor any guarantee of final passage. We implore the House and Senate to come to agreement immediately on cigarette tax legislation that does not include a sunset provision.”

Newsworks adds:

Philadelphia Mayor Michael Nutter was in Harrisburg lobbying for the measure to pass without changes.

Nutter spokesman Mark McDonald said the amendments threaten the district's ability to operate a full school year.

"Every week without this tax in place will cost the district money," he said. "It is a terrible situation for the district and one that the mayor hopes can be resolved by House and Senate coming together and abandoning this sunset provision."

The Inquirer explains why Sen. Dominic Pileggi agreed to the five-year sunset amendment:

"That is something that should be examined after five years to see what impact it has had on revenues collected. Is it stable? It is declining, is it growing, what effect has it had on neighboring counties," said Pileggi.

He added: "I think that it is a fair [change], to see how this has worked out in practice over five years rather than just putting it on automatic pilot."

And the Daily News explains the possible consequences:

The proposed measure would cut the district's estimated $93 million deficit in half. Without additional revenue, officials say the district will be forced to make steep cuts, which could include laying off hundreds of teachers, putting as many as 41 students in a class, and slashing school police and building maintenance. It could also delay the opening of schools.

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  • I hate liberals

    If Chicago Schools are cutting 1,400 jobs why should Phila be any different?

    • Amanda

      They already cut thousands of jobs last June?

      • I hate liberals

        I refuse to argue with somebody who can not understand the concept that the welfare sucking leeches of the city are the ones screaming the most. They pay no taxes! The pensions of these union goons are bleeding the tax payers and the city to the point of bankruptcy along with the state. It’s that simple

  • Bill Godshall

    A $2/pack cigarette tax in Philly would significantly reduce cigarette consumption and encourage many smokers to quit, which is a big plus for public health.

    The financial winners of the proposed tax would be Philly Schools, cigarette retailers located just outside city limits in adjacent counties, e-cigarette retailers (as many smokers would switch to far less hazardous smokefree e-cigs, another plus for public health), and cigarette smugglers (who could thrive unless City and State officials strictly enforce the new City tax and existing PA laws).

    The financial losers of a $2/pack cigarette tax in Philly are cigarette smokers and retailers in Philly (especially retailers located near the city limits), as legal sales of cigarettes in Philly could immediately decline by 50% or more.

    Although the new cigarette tax would significantly improve public health, City and State officials will need aggressive enforcement to ensure the City’s receipt of estimated tax revenue.

    Bill Godshall
    Executive Director
    Smokefree Pennsylvania
    1926 Monongahela Avenue
    Pittsburgh, PA 15218
    412-351-5880
    BillGodshall@verizon.net

    • http://www.facebook.com/radioboyintj Kevin McCloskey

      You Anti-Smoking Nazis are fanatical control freaks.

      Why dont you leave us alone?

      We know smoking is bad for us.
      We enjoy it however.
      We are tired of your nanny state sin taxes.
      And if im outside im smoking nothing you can do about that.

  • http://bit.ly/TobakkoNacht Michael J. McFadden

    There are three distinct problems with raising the cigarette tax, and there’s a very handy alternative that would save the lives of many children, make adults healthier, and make our air cleaner.

    First: the problems: (1) It’s a massive tax increase on one of the poorer well-defined minority groups in the country. Antismokers love to point out how high-income better-educated professional tend not to smoke: so this is the OPPOSITE of an income tax: it extorts money disproportionately from the poor; (2) It will encourage a black market, thereby making cigarettes more freely available to kids without ID cards while also pumping money into organized crime and possibly even terrorism; and (3) It’s raising a tax on a product that is already FAR more heavily taxed than anything else: the basic cost of a pack of cigarettes without taxes at all would be about $2.50. Cigarettes are already taxed (fed, state, sales, MSA) at well over 100% and a $2 tax increase would raise the rate to almost 200%.

    So what’s the alternative? Simple: apply the same type of tax increase to two other groups that engage in practices that harm others in various ways: alcohol and gasoline. A cheap six pack of beer would go from $10 up to $30, and a cheap gallon of gas from $4 up to $12! The schools would be awash in money, wife-beatings, murders, fights, drunk-driving accidents would all go down, children would be less able to afford to drink (About 90% of drinkers start as underage children you know…), our air would be cleaner, and Pennsylvanians would be healthier as they walked, jogged, and bicycled to work! Drinkers and drivers can’t possibly be selfish enough to fight such a tax, right?

    Who could possibly object?

    Michael J. McFadden
    Author of “Dissecting Antismokers’ Brains”
    Cantiloper@gmail.com

    • http://www.facebook.com/radioboyintj Kevin McCloskey

      Mayor Nutter is an Anti-Smoking-Nazi and has been looking for a way to
      stick it to smokers big time for years.

      The last time the school did receive funding he was actually dismayed that his tax plan did not go through, even though funding was received.

      These people just look for ways to make it harder for the smoking populace.

      This is why Nutter made all philly parks smoke free recently.
      Now they want to make it so you cant smoke outside these people are rediculous. I am on the side of Big Tobacco and I hope this bill fails.