The Pennsylvania Senate this afternoon approved, 39-11, a long-debated $2-per-pack cigarette tax for Philadelphia to help close the School District's budget gap. Gov. Corbett promptly announced that he would sign the bill. Signing will take place at 11:30 Wednesday morning. (Read the legislation.)
Superintendent William Hite said in a tweet that between the cigarette tax and the earlier approval of a 1 percent sales tax surcharge for schools, the District will net more than $170 million "in recurring and predictable revenue instead of one-time funding."
If it is implemented in October, the cigarette tax is expected to generate $49 million this year for the schools and as much as $80 million annually in future years. The sales tax surcharge provides the District a fixed amount of $120 million annually. The cigarette tax provision expires in 2019, however. Both taxes are on Philadelphia residents only, but they required state approval.
The District has been counting on receiving all this revenue just to balance this year's bare-bones budget; failure of the state to act on the tax would have triggered another round of mass layoffs, Hite had said.
With the anticipated proceeds from the new tax and $32 million in cuts made in August, the District's budget is balanced, according to District spokesperson Fernando Gallard. "But as we keep saying, what we have in schools is inadequate at best."
The governor issued a brief statement:
I am pleased that both chambers have taken action on this legislation so that the Philadelphia School District, and more importantly, the students of Philadelphia, can benefit from it.
I intend to sign the into law as soon as it reaches my desk so that the Philadelphia School District has the ability to ensure students have access to a safe and secure learning environment for the remainder of the school year.
From Mayor Nutter:
I want to thank the Philadelphia House and Senate delegation and the entire Pennsylvania House and State Senate for adopting HB 1177. Today’s vote is a step forward and the result of strong bi-partisan leadership in both the House and Senate, the Philadelphia delegation, and legislators across the Commonwealth. I also want to thank Council President Darrell Clarke and all of City Council for their commitment to the children of Philadelphia in passing the Cigarette Tax in the spring of 2013.
The Philadelphia Cigarette Tax will provide critically important local revenue to the Philadelphia School District. With this action today, the District will not have to make the painful decision to cut a thousand School District jobs. But, I want to be clear: while the revenue generated by the Cigarette Tax was essential to balancing the District’s budget, it is not sufficient funding to provide the high-quality education that every Philadelphia student deserves.
We hope that the passage of this enabling legislation is only the beginning of a new approach to the fair and full funding of public education in Pennsylvania. The students in this Commonwealth deserve a high-quality education with better than adequate resources, safe schools, and full staffs. We need a statewide, student-weighted funding formula to ensure our students have access to the education they need to be successful.
I want to thank Governor Tom Corbett for his vocal support of this legislation throughout the process, and I am looking forward to him signing it into law in the near future.
And Superintendent Hite and School Reform Commission Chair Bill Green issued a joint statement:
We are extremely pleased and relieved that the cigarette tax legislation has been passed by the Senate and the House and it is awaiting the Governor’s signature. Legislative leaders in both chambers and both sides of the aisle in Harrisburg acted on their promise to quickly consider and vote on this important legislation when the General Assembly reconvened this month.
We are thankful to all who spoke up for this important legislation, including the many students, teachers, principals, and citizens. We extend special gratitude to Senator Anthony Hardy Williams for offering the original legislation; the Philadelphia delegations in the House and Senate, led by Representative Cherelle Parker and Senator Shirely Kitchen; Mayor Michael Nutter for personally championing this bill; and Council President Darrell Clarke for his continued advocacy.
A great number of legislators were personally involved in making sure that this legislation be fully consider and voted on. We are particularly thankful to Representatives Mike Turzai, Mike Vereb, William Adolph, Dave Reed, and John Taylor, and Senator Dominic Pileggi for their leadership on this issue. Governor Corbett also worked closely with the members of the legislature to gain their support and we are grateful for his pledge to sign the legislation as soon as it is presented to him.
It is important to note that the estimated $49 million in first-year proceeds from the new cigarette tax is already built into our current school-year budget and will allow us to keep the resources already allocated to schools, which are at best inadequate.
PFT president Jerry Jordan praised the action but expressed concern about amendments to the bill that may open the door to the creation of more charter schools in the city:
Passage of the cigarette tax is a major relief for the parents, educators and children of Philadelphia's public schools. While we have concerns about the amendments that were attached to this version of the legislation, the funds provided by the tax are essential for providing our schoolchildren the programs and services they need and deserve.
Ultimately, however, our children cannot thrive if our schools are funded by temporary revenue streams and other quick fixes. We need a sustainable funding formula to truly turn our schools into the best possible environments for teaching and learning.On behalf of the members of the PFT, I want to thank the Philadelphia Delegation in Harrisburg, the members of City Council and all of the educators, parents and community members who tirelessly advocated for passage of the cigarette tax legislation, and continue to fight for fully funded public schools.