This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.
The passage of the Philadelphia cigarette tax hit a major setback Tuesday.
The Pennsylvania Senate approved the tax, but added provisions as part of an omnibus package that will yet again need the blessing of the House of Representatives, which is not scheduled to return to a voting session until the fall.
The Philadelphia School District had been desperately hoping the Senate would allow the House version of the cigarette tax – approved in dramatic fashion last week – to pass unscathed.
But Senate Majority Leader Dominic Pileggi, R-Delaware, added an amendment to the bill that would "sunset" the tax after five years and prohibit the School District from borrowing against cigarette tax proceeds.
Philadelphia Schools Superintendent William Hite immediately blasted the move in a written statement, calling it an action that "throws us back into uncertainty."
"At full implementation, the cigarette tax was estimated to generate more than $80 million annually," said Hite. "Ending the tax in five years will exacerbate our structural deficit, complicate our long-term planning efforts, make it harder to access the capital markets, and strip our schools of educational services and supports."
The District faces a $93 million budget gap merely to provide last year’s admittedly "insufficient," bare-bones level of services.
"With schools scheduled to open in less than two months, it is crucial that we secure the needed funding to support our students and schools," said Hite. "We implore the House and Senate to come to agreement immediately on cigarette tax legislation that does not include a sunset provision."
Delays, amendments could shorten school year
Philadelphia’s Mayor Nutter was in Harrisburg lobbying for the measure to pass without changes.
Nutter spokesman Mark McDonald said the amendments threaten the District’s ability to operate a full school year.
"Every week without this tax in place will cost the District money," he said. "It is a terrible situation for the District and one that the mayor hopes can be resolved by House and Senate coming together and abandoning this sunset provision."
Stephen Miskin, spokesman for House Republicans, said it was "unclear" when the House would come back for a voting session.
He also expressed displeasure with the fact that the bill as passed by the Senate added other provisions, including various hotel taxes and monies for City Revitalization and Improvement Zones.
"It will be very difficult to pass House Bill 1177 if it is loaded with all these hotel taxes and new CRIZs, which could cost the state up to $70 million," Miskin said. "We certainly preferred legislation focused on quality education for the kids in Philadelphia."
State Sen. Vincent Hughes, D-Philadelphia, had tried to force an up-or-down vote on an older version of the bill, sans amendments, but the motion failed.