Liquor-by-drink tax stalled, school funding unclear

Khayla Coleman-Smith, 13, from G.W. Childs School, reads a statement to Council as her mother, Kim Smith, looks on. AKIRA SUWA / Staff Photographer
Khayla Coleman-Smith, 13, from G.W. Childs School, reads a statement to Council as her mother, Kim Smith, looks on. AKIRA SUWA / Staff Photographer
Posted: June 14, 2013

Philadelphia City Council members are a week away from their scheduled summer recess, and how they intend to find millions of dollars for a school district planning to lay off nearly 3,800 employees at the end of the month remains unclear.

Council President Darrell L. Clarke did not call for a committee vote Wednesday on a bill to raise the liquor-by-the-drink tax, disappointing parents and school supporters who gave two hours of testimony urging approval.

Clarke stopped short of saying the hike was dead, despite a lack of support among his colleagues and the clock's ticking toward the recess and the June 30 budget deadline.

The liquor proposal, along with one that would create a $2-a-pack cigarette tax, are part of Mayor Nutter's plan to raise $95 million for the School District, which is facing a $304 million budget deficit.

Clarke noted before the hearing that both taxes would need state approval to take effect.

"It doesn't matter what we do in here," he said. "If they don't do what they need to do in Harrisburg, we can't put money on the table for the schools at the level we would like."

Getting that approval in the Republican-controlled legislature remains an "uphill climb," said Erik Arneson, policy director for Senate Majority Leader Dominic Pileggi (R., Delaware).

Arneson said there was a "broad desire" to provide more money for schools statewide, "but there is not a ready source of state funds."

"Further, it doesn't seem likely that the General Assembly would take action to address the needs of one particular district without addressing the needs in other districts," he said in an e-mail this week.

The state House passed a budget Wednesday with a $100 million increase in statewide basic-education funding, but only $30 million would come to Philadelphia, far short of the district's request for $120 million in new state money.

The district also is counting on concessions from the teachers' union to make up the deficit.

Council could consider passing a bill, sponsored by Maria Quiñones Sánchez, to increase the Use and Occupancy business tax for the second year in a row. The bill would raise $30 million for the schools, but Nutter and the Greater Philadelphia Chamber of Commerce have opposed it.

Unlike the liquor-by-the-drink tax, the cigarette and Use and Occupancy bills have been voted out of committee and are awaiting final approval.

Councilman Bill Green also floated an idea this week to adjust the split of property taxes between the city and the schools, giving the schools an extra $32 million.

He said this could be done either by shifting the full amount from the city or by eliminating the homestead exemption offered to homeowners on their property taxes.

Clarke said there might be more support for the liquor-tax hike if the state gave approval first.

Although the recess is scheduled for Thursday, Clarke could call another meeting June 27, three days before the budget deadline.

Clarke has scheduled another Committee of the Whole meeting for Wednesday. If the liquor hike were moved out of committee then, the bill could pass at a meeting June 27.

Nutter spokesman Mark McDonald said the mayor "remains hopeful that various discussions and deliberations will continue."

"And as tough an issue as this might be politically for some on City Council," he said, "it will be far worse for Philadelphia school kids next school year if we don't pass this legislation."

Contact Troy Graham

at 215-854-2730 or,

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