State Senate committee OKs cigarette tax, long road to becoming law

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From left, School Superintendent William R. Hite Jr. Mayor Nutter, and State Sen. Anthony Hardy Williams head to a news conference at City Hall Wednesday, May 15, 2013 to announce a new school tax plan - raising taxes on cigarettes and liquor by the drink in Philadelphia - to help raise funds for the ailing school district. ED HILLE / Staff Photographer

A state Senate committee approved a package of bills today including one that would allow the city to enact a new $2 per pack tax on cigarettes to help fund the Philadelphia School District.

The cigarette tax, proposed locally by Mayor Nutter and recently approved by City Council requires state enabling legislation. Council concluded its budget season last week leaving the school's budget crisis in Harrisburg's hands. The budget approved by Council included $45 million in new revenue from the cigarette tax and a promise from Nutter to increase tax collections by $28 million.   

Concerns were raised about Council ending the budget season with funding for Philly schools that is not guaranteed since the cigarette tax is dependent on state authorization and the proposal had received some pushback from state lawmakers.

But today's developments were a positive sign. 

State Sen. Anthony Williams, who sponsored the tax on cigarettes is "optimistic" the bill may stand a chance, said his spokeswoman Nia Meeks. But there is still a long ways to go before it can become law. The bill must be approved by the state Senate Appropriations Committee, the full Senate and then the House before it lands on Gov. Corbett's desk.

The school district is seeking $60 million from the city, $120 million from the state and $133 million from its union to fill a $304 million budget hole. Corbett and state legislators have been discussing ways to raise significant amounts of money for the city's schools. 

Several other measures were also approved by the Committee today including a bill that would allow the city to provide means-based gentrification relief to homeowners impacted by the city's new property-tax system, the Actual Value Initiative, a bill that would allow the city to place liens on properties outside of Philadelphia and a proposal that would allow homeowners to make property-tax payments in installments.

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