Property tax back from the dead - for now

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Opponents (left) of a proposal to tax soda and other sugary drinks display signs at a City Council hearing earlier today, (AP Photo/Matt Rourke)

City Council would raise property taxes by 3.5 percent instead of introducing a tax on sugary drinks, in a proposal Thursday to rescue the Philadelphia School District from the $629 million financial chasm it has fallen into.

In a deal that must weather the test of time -- perhaps an hour or two -- a mjaority of Council members have decided that a property tax hike is preferable to painful cuts in the city budget or a "soda tax" that might go down in a court battle. They reached that conclusion about 2 p.m. after a morning of testimony on the city budget, followed by closed-door bargaining in President Anna C. Verna's office. Members shuttled in and out to avoid having a quorum and therefore a violation of the state Sunhine Act, as reporters stood outside counting bodies.

Council is expected to vote the budget out of committee today for a final vote on June 23.

A day of fevered negotiation started with any property tax proposal dead by most accounts, and Mayor Nutter close to a majority for the tax on sugary drinks, at 1-cents per ounce, rather than the 2-cents per ounce that Nutter wanted.

The deal has to be consummated by Council in a committee vote, but that won't happen until later this afternoon. Given the ephemeral nature of the talks, it could crumble at any time. As of 2:50 p.m., it appeared to be holding steady, as Council took care of other business, including major bills on DROP, paid sick leave, the handling of homeless people on city streets, and signs in the Market East corridor.

A 3.5 percent increase, which follows a 10 percent hike last year, would generate an additional $37 million, all of it for schools. The deal reportedly also includes $6 million by raising street parking rates in Center City and University City, and up to $10 million from the city's fund balance, which could result in cuts from the city budget.

That's a maximum of $53 million, significantly less than the $102 million requested by Superintendent Arlene Ackerman.

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