AVI, Cigarette Tax Bills Get Early Nod in Harrisburg

The State Senate Finance Committee on Tuesday passed three bills related to Philadelphia’s property tax reform, as well as a bill authorizing the city to create a $2-a-pack cigarette tax.

All four bills could be heard as early as Wednesday in the Appropriations Committee before going to the full Senate. The cigarette tax bill would have to go to the House for passage as well.

The cigarette tax is key to the city’s plan to raise $74 million toward the School District of Philadelphia’s $304 million budget shortfall. City Council, which recessed last week, unanimously passed a bill to create the tax, but the state must give permission to enact it.

Council did not provide any other new funding source for the schools district, which asked the city to contribute $60 million and the state to provide $120 million. Council and the Nutter administration hope to shake about $28 million out of tax delinquents for the schools, and collect $46 million from the cigarette tax.

Members of the Philadelphia delegation also introduced three bills earlier this year related to Mayor Nutter’s property tax reform, the Actual Value Initiative. One bill would give the city the authority place liens on any property a tax delinquent owns in the state. That bill was meant to combat the plague of out-of-town speculators who hold on to Philadelphia real estate without paying property taxes.

The other bills would allow certain eligible homeowners to pay their real estate taxes in installments, and allow the city to give out relief to longtime homeowners in growing neighborhoods based on their age and income.

The AVI bills were sponsored by state representatives Cherelle L. Parker, Mike McGeehan and Mike O’Brien. State Sen. Anthony Hardy Williams introduced the cigarette tax bill.

Despite early approval, state Republicans said to expect "vigorous debate" on the four bills.

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