Big Parking, Property Tax Hikes Proposed to Fund City Schools

Bill Greenlee | Photo via City Council’s Flickr

[Updated at 1:10 p.m.]

Philadelphia City Council introduced legislation Thursday to hike three taxes in order to help fund the school district.

Though lawmakers have been pooh-poohing Mayor Michael Nutter’s proposal to increase education finding with a big ol’ 9 percent property tax hike for months, this is the first major step they’ve taken to advance an alternative plan.

Councilman Bill Greenlee proposed raising the parking tax from 20 percent to 22.5 percent.

“I’m putting this in as one of the options to look at,” he said. “We’re not making any firm decisions on anything yet.”

Council members also sponsored legislation Thursday to increase the property tax from 1.34 percent to almost 1.4 percent, and to boost the use-and-occupancy tax from 1.13 percent to 1.21 percent. 

The three bills combined would provide an estimated $70 million for the school district. In addition, Council President Darrell Clarke supports raising money for the city’s schools by selling commercial tax liens.

The parking industry is expected to launch an aggressive lobbying effort against Greenlee’s proposal. Before Greenlee even introduced the legislation, Parking Corp. president Robert Zuritsky wrote a letter to lawmakers, imploring them to do a better job collecting delinquent taxes instead of raising them.

“Over the last seven years, we have had to deal with significant increases to business taxes and fees,” he said. “The most troubling and frustrating aspect facing the prospect of additional tax burdens is the city’s unwillingness to collect all of the taxes that are currently due!”

The Greater Philadelphia Chamber of Commerce has also been lobbying against a use-and-occupancy tax hike.

Though Council members have not yet reached an agreement on exactly how to increase education funding, there does seem to be a consensus that they will not fully meet the school district’s request for an additional $103 million from the city. Instead, the number that is being discussed is roughly $80 million.

“Again, there’s been no firm decision on anything yet, but that’s the figure that seems to be generally floated around,” said Greenlee. “That would mean the city would totally wipe out the deficit itself.”

The school district is facing a budget gap of $85 million next year. Superintendent William Hite said he needs a combined total of an extra $309 million from the city and state, however, in order to properly educate students.

Nutter’s property tax hike would raise $105 million for the schools, exceeding the district’s ask.

“We don’t think a 9.3 percent increase in real estate taxes is the right way to go, given that a lot of people just got hit with AVI [Nutter’s property tax overhaul],” said Greenlee. “It’s just too much. So we have to look at other options. We have stepped up and funded the schools every year.”

Since 2011, the city has increased school funding by a stunning $376 million, while state support first dropped precipitously and then stagnated.