Two state representatives from Philadelphia want the wage-tax relief that comes to the city from state taxes on Pennsylvania casino profits to be diverted to the Philadelphia School District to help close a budget deficit.
Democratic Reps. Rosita Youngblood and Mike O'Brien said Tuesday that they would introduce legislation to divert the money for five years. In a news release, the duo said "the temporary cash infusion of about $88 million would give the district time to consider, implement and benefit from changes being suggested by the city's School Reform Commission."
Philadelphia's wage tax is 3.93 percent for city residents and 3.5 percent for nonresidents. Gaming taxes were used to reduce property taxes across the state but were targeted at the wage tax in Philadelphia. The state Gaming Control Board projects that casino taxes will result in $86.3 million in wage-tax relief in Philadelphia from July 1 to June 30, 2013.
Mayoral spokesman Mark McDonald said the Nutter administration opposes the proposal.
"We would either have to increase the wage tax for residents and nonresidents by about a half-percentage point or we'd be dealing with a major hole in the budget," McDonald said.
Youngblood and O'Brien said their proposal is not a tax increase, calling it instead a "temporary diversion of funds." They also blamed Gov. Corbett and Republicans in the General Assembly for the financial turmoil, accusing them of "turning their backs" on the Philadelphia School District through budget cuts. And they called Mayor Nutter's plan to raise money for the district through reassessing the value of properties in the city a "Chicken Little response."
Nutter's plan to move to a property-tax system that uses market values would bring in an additional $94 million for the schools. Although critics have called it a "backdoor" tax hike, Nutter has said that he is simply capturing the rise in property values. He has also stressed that the current property-tax system is inaccurate and unfair.
To the accusation that the GOP was ignoring the schools' woes, a spokesman for Corbett argued that his proposed budget for the pending fiscal year would provide more money to the district, though critics have debated the governor's budget math. n