This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.
by Kevin McCorry for NewsWorks
A coalition of eight education advocacy groups swarmed City Hall on Thursday, urging City Council to follow a sales-tax extension plan already authorized by the state, which would send $120 million in increased sales-tax revenue to schools.
Under the existing plan, anything more than $120 million raised from extending a one-cent city sales tax would go to the pension system. Current city projections show sales-tax revenue could be as much as $140 million this year.
Mayor Nutter and Council President Darrell Clarke have been hoping to split the sales-tax proceeds evenly between schools and pensions and make up the difference by pushing the state to pass a tax that would raise the cost of cigarettes in Philadelphia by $2 per pack.
Donna Cooper, executive director of Public Citizens for Children and Youth, said it puts schools at risk to think that Harrisburg is going to both pass a cigarette tax and redo the sales-tax plan that it already authorized.
Go with what’s already approved, she urged, and then push for the cigarette tax as a way to fund pensions.
"The real question is why that isn’t on the table? Why [are we] going through the convoluted process of cutting the sales tax in half and hoping to get the cigarette tax?" she said.
Cigarette tax appears unlikely
The reason, she said, is that Council doesn’t have faith that the cigarette tax will pass the GOP-controlled state legislature.
Councilman James Kenney wholeheartedly agreed.
"You have to have some reality. We’re not getting the cigarette tax," he said. "Grover Norquist has effectively shut down any type of effort that has the word ‘tax’ on it to Tea Party Republicans."
But, unlike Cooper, Kenney fully supports the split. Using some sales-tax revenue to fund pensions, he said, will create more options to fund the schools through the city’s general fund.
"We need to defease the pension obligations, and, if we can do that in any consistent way, there will be more general fund money unfrozen, able to use for schools," he said. "We have so many other complicated issues to deal with, and when you have people advocating for just one thing … they have to look at what we have to look at, which is the whole picture."
(Education advocates argue that shoring up school funding will attract middle-class families to the city, which will drive up the city’s tax base – ultimately making the pension issue easier to deal with.)