Will City Lose October Sales Tax Revenue?

Even if the state approves the city budget relief, may more cuts be on the way?

Two weeks ago, Mayor Nutter announced a round of cuts -- delaying a police academy class, laying off workers and cutting back hours at the 3-1-1 call center -- due to a delay in getting state approval for a temporary sales tax hike.

Nutter's original budget plan counted on getting state approval to increase the local sales tax by 1 cent on the dollar for five years and to make changes in how the city's pension fund is replenished. If approved, the sales tax increase would take 4 to 6 weeks to implement. Nutter expected to get $10 million per month in sales tax revenue, starting in August.

But because Harrisburg lawmakers hadn't yet given him approval, Nutter had to eliminate that revenue for August and September by making $20 million in cuts. And so PhillyClout wonders: Is October next?

The state House of Representatives is set to vote on House Bill 1828, which provides approval for the sales tax and pension changes, on Sept. 8. Even if the bill was approved and signed by the governor all on that day, there may not be enough time for the new tax to be in place by Oct. 1.

Finance Director Rob Dubow today said: "it's starting to look like that is going to be at risk." Stay tuned....

Continue Reading