THE MAYOR and City Council agree that the school district needs more money. After that, they part ways - once again.
Mayor Nutter has proposed three solutions to the district's request for $60 million: increase delinquent tax collections to raise $28 million; up the across-the-bar drink tax from 10 percent to 15 percent to raise about $22 million; impose a $2-a-pack local tax on cigarettes sold in Philadelphia to raise $45 million this year. Total take: $95 million.
Council hasn't endorsed any plan, but a proposal by Councilwoman Maria Quinones-Sanchez to raise a business tax paid by the tenants in commercial buildings has been reported out of the Finance Committee. As drafted, it would raise $30 million more from what is known as the Use and Occupancy Tax.
The mayor's plan makes sense as policy but is iffy at best as politics. To enact the drink and cigarette tax he must first get legislation passed in Harrisburg, then signed by Gov. Corbett, before he can go to Council and ask it to pass the measures as well.
The mayor said that his plan will provide "strong, consistent, reliable funding sources." In talking with people in power in Harrisburg, the mayor said he sensed an awareness of the difficulties that the school district faces. At the same time, he has received no assurances that his plan can pass.
The city will also have to combat opposition to the bill from the tobacco lobby, convenience-store and tavern owners, and a cluster of Republican legislators who are against tax increases - any tax increase, anywhere. These combine to make passage a long shot. That's before it even gets to Council, which isn't exactly the headquarters of the Nutter Fan Club.
At the same time, the mayor is cool to the Sanchez proposal on the Use & Occupancy Tax. The city increased the tax last year to help the schools. He argues that another increase will hurt the business climate.
He would be right if the Sanchez bill piled one tax increase upon another. It does not. Under the Actual Value Initiative, commercial and industrial properties will pay $75 million less in real estate taxes next year. Sanchez's bill exempts any business paying $2,000 or less each year from all U&O taxes - a move that will protect owners of storefront business. It still lets owners of larger commercial and industrial properties keep most of their AVI windfall, but applies $30 million of it to the schools.
We believe that Council and the mayor should combine the most workable of all the ideas on the table: Sanchez's U&O proposal, with Nutter's plan for increased collections. That would generate the money the schools need, and send a signal - not just to Harrisburg, but to the rest of us - that both parties are willing to work together to solve the city's biggest problems.