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City Controller: Cigarette tax revenues to fall $26 million below projections

Tax revenues from Philadelphia’s $2-per-pack cigarette tax for this fiscal year are projected to be $26 million lower than initial projections, according to the City Controller's Office.

But the Philadelphia School District says the shortfall is not expected to put the district at risk.

The extra $2-per-pack tax was implemented in 2014 to aid city schools.

The total tax on a pack of cigarettes in Philadelphia is $4.60, which includes a $2.60 state tax. Pennsylvania's state tax on cigarettes increased by $1 on Aug. 1.

Philadelphia officials had initially projected city cigarette-tax collections to be about $75 million in fiscal year 2017, but based on the $24.8 million generated in the first six months (July through December 2016), the yearly total is estimated to be $49.6 million, according to a Wednesday statement from the Controller's Office.

That means that cigarette tax revenues for fiscal 2017 are projected to be almost $26 million below the city's initial projections, the Controller's Office said.

The analysis of the city's cigarette tax collections was part of the City Controller's monthly economic report for November. The report also notes that the expected cigarette-tax-revenue shortfall is about $5 million below the School District's own budgeted projection of about $54 million that it expected to get from the city's cigarette tax this fiscal year.

According to a state provision, if local revenues from the city's tax do not reach $58 million, the state will cover the difference.

The upshot? "There's no risk to the school district," Uri Monson, the district's chief financial officer, said Wednesday.

Staff writer Tricia L. Nadolny contributed to this article.