Council none too thrilled over Nutter's tax proposal

WHEN MAYOR NUTTER met with City Council leadership yesterday to announce his proposal to bail out the school district with a combination of tax hikes, the faces staring back at him were glum.

"I didn't see anybody smiling in that room," said Councilman Frank Rizzo Jr., R-at large, adding that he "is not in support of an increase in real-estate taxes. But I think it's inevitable that something's got to give."

Nutter said he hoped that he and Council could agree on a combination package including a property-tax boost, another attempt to pass a soda tax and an increase in parking-meter rates or fines to fulfill the district's request of up to $110 million to save full-day kindergarten, alternative education, transportation and reduced class size.

"Parents and children need to know as the school year is ending what the next school year will be like," Nutter said. "We have a very limited time frame, it is time to take this action."

Nutter proposes up to an additional 10 percent hike on property taxes, a 2-cent per ounce tax on sugary drinks and an increase in parking-meter rates or fines, primarily in Center City and University City.

But Council members expressed strong opposition to the sugary-drink tax and yet another property-tax increase. If approved, this would be the third straight year with a tax increase.

"It's quite a challenge trying to figure out how to get nine votes [to pass the measures]," said Councilwoman Marian Tasco. "We're also concerned about funding for the school district; will they actually spend the money for" saving the proposed cuts?

The district needs $629 million to close its funding gap. Superintendent Arlene Ackerman last week requested up to $110 million extra from the city to prevent severe cuts. The city is already set to provide $815 million in tax revenue and grant funding to the district for the pending fiscal year - about 30 percent of the district's $2.7 billion budget.

Nutter was unable to sway Council to pass a property-tax hike in 2009 or a soda tax last year, but the soda tax may be easier to digest now rather than another property-tax increase.

Mayoral spokesman Mark McDonald said the latest soda-tax proposal is unlike last year's, which would have been counted as part of a retailer's business tax. Last year, it was billed as a way to raise revenue and improve public health.

"There cannot be a worse option than the parking and soda taxes," said former Mayor John Street, a frequent Nutter critic who has expressed interest in running as an independent for mayor or for Council at large. "It will set the city back in a big way. This is so typical of the mayor."

Last year, Street brought his urban-policy class from Temple University to Nutter's budget address to Council, carrying an empty soda bottle to protest that proposed soda tax. Council and the mayor approved a temporary sales-tax increase in 2009, and it approved a temporary property-tax hike last year.

"I'm not willing to tax people," said Councilwoman Jannie Blackwell. "Why hurt the residents that can't afford the charges they have now?"

Some Council members were on board with shifting the amount of property-tax revenue that goes to the district, but Nutter opposes it, arguing that it would create a hole in the city budget.

Councilman Bill Green said that one option that should be explored instead is taking money from the $50 million year-end surplus. The administration pushed back against Council efforts to lower the surplus last year.

Any new-revenue measures must be approved by June 30.

Staff writer Chris Brennan contributed to this report.