Cigarette tax's eventual decrease will mean less $ for schools

IN PROPOSING his plan to help plug the school district's $304 million deficit, Mayor Nutter said that new city aid for the schools should be "consistent, stable, secure funding."

So why is the city pushing for a new tax that is expected to decrease over time?

The proposed $2-per-pack cigarette tax would generate $87.3 million in 2015, its first full year, according to the administration. By 2018 revenue is estimated to drop to $76.9 million as the higher prices drive smokers to quit or buy packs elsewhere. That's about $10 million less for Philly schools than four years earlier.

The tax, which is awaiting state approval, would begin midway through the 2014 fiscal year and make $45 million in its first six months.

Nutter spokesman Mark McDonald said the tax is "a predictable source of revenue."

"That is, the funding recipient will be able to plan and budget with this revenue source," he wrote in an email. "It's not likely to be a tax that shifts up and down in a wild manner."

McDonald noted that the city is trying to provide more money than the $60 million the school district requested from it - much more after the first year of the new tax.

For many, the cigarette tax is the right tax at the right time. It doesn't crush jobs, it has public-health benefits, and it's better politically to hike taxes on smokers than homeowners or businesses - especially because that's exactly who paid for recent tax increases for the school district.

Nevertheless, it would guarantee that the schools get funding that is to some extent temporary.

Councilwoman Maria Quinones-Sanchez, who last week gave up her push for a $32 million increase in the Use & Occupancy Tax, said she considers the cigarette tax a stop-gap measure.

"I was willing to concede this year because ultimately if we want to find a solution long term, we'll need to look at property taxes and U&O," she said.

Schools activist Helen Gym said that while any money for the district is welcome, she would rather city leaders tackle the broader issue of school funding.

"Nobody who looks at schools or is in schools would ever say that one sin tax on a very narrow body of Philadelphians is going to solve the problems," said Gym, co-founder of Parents United for Public Education. "It is a mistake if politicians approach it from an ad hoc, piecemeal, slapdash, put-things-together approach."