"Safety Net" Sales Tax Bill Introduced

After being accused last week of jeopardizing the extension of the city's extra 1 percent sales tax and threatening a needed source of funding for Philadelphia's schools, City Council introduced a bill Thursday that should somewhat alleviate those concerns.

The bill introduced last week would extend the sales tax only if state legislators first gave a handful of permissions – a strategy Mayor Nutter called "risky and dangerous."

The bill introduced Thursday on behalf of Council President Darrell L. Clarke would extend the sales tax even if the state does nothing.

Clarke said Council was likely to go into the summer recess before the General Assembly, and "we wanted to have a safety net" with regards to the sales tax.

Last year, the state gave the city permission to extend the city's extra sales tax, which is set to expire on July 1, devoting $120 million a year to the School District of Philadelphia and giving the remainder to the city's public employee pension system.

The tax is expected to generate about $137 million in the next fiscal year.

Clarke and others on Council want to split the proceeds with the pension system, which is about $5 billion underfunded and requires a huge cash infusion from the city's general fund every year.

The bill introduced last week would give the schools $120 million in the first year, but in the fourth year, proceeds from the extra sales tax would be divided evenly.

Nutter said he supports that approach, but only if the state also approves a $2-a-pack cigarette tax in the city, with the funds going to the schools. School district officials and education advocates last week decried any split, saying the district can't afford to have its share of the sales tax revenue sliced in the future.

The district needs $216 million in new money this year just to maintain its current, depleted state.

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