Does Council have the stomach to pass new school-aiding taxes?

AS NEW TAX proposals flooded City Council yesterday in an effort to bail out the school district, some tax hikes seemed to have a fighting chance while others already appear to be dead-end legislation.

Mayor Nutter pushed the two most unpopular bills: a 10 percent property-tax increase for the second straight year, and a soda tax. Nutter also proposed a parking-rate increase that could be implemented administratively and would garner $6 million.

Council has echoed over and over again that there is little appetite to raise property taxes - at least not at the 10 percent level that Nutter proposed.

"We made a commitment to people that [last year's property-tax hike] was going to be temporary," said Councilman Bill Greenlee. "We have to show people there is absolutely no other way before we renege."

Nutter needs nine votes to pass any legislation, but there remains no consensus for either of his proposals.

"In any event, no matter what happens, it is the Council that has to vote," Nutter said. "This is a crisis point for the city. This is a leadership moment."

The school district needs $629 million to close its funding gap. Superintendent Arlene Ackerman last week requested up to $110 million extra from the city to stave off cuts. The city is already set to provide $815 million in tax revenue and grant funding to the district for the pending fiscal year - about 30 percent of the district's $2.7 billion budget.

The sugar-sweetened beverage tax, combined with additional state funding, an agreement with SEPTA and an increase in on-street parking rates would help restore full-day kindergarten, transportation, alternative education and reduced class sizes.

Meanwhile, Councilman Darrell Clarke proposed an amendment to the budget that would raise property taxes by 3.5 percent, producing $44 million for the district to be distributed as a one-year grant.

"We're in the midst of some very challenging times as it relates to the school district and we're being asked by the school district to raise significant amounts of revenue," Clarke said. "There's still some uncertainty among some members in terms of what needs to be available, and some answers that we've received from school district personally I'm not comfortable with, but at the end of the day there will be a need for some revenue."

But the administration says that Clarke's proposal clashes with state law that would require the city to continue any funding increases annually.

Nutter was unable to persuade Council to pass a property-tax hike in 2009 or a soda tax last year. The new sugary-drink tax requires that distributors be licensed, and the tax would be collected from them. Last year's proposed tax was part of a retailer's business tax.

The 2-cents-per-ounce tax, which would generate $60 million for the fiscal year if it begins in October, appears to be somewhat easier for some Council members to stomach than a property-tax hike.

But the proposal will again face a fierce lobbying effort from beverage makers and distributors.

"Why is our industry being singled out for this?" said Larry Ceisler, spokesman for the coalition of bottlers, Teamsters, and others who oppose the tax. "Last year we defeated the tax. It never came up for a vote. We exposed it for what it was. It wasn't an obesity measure. It's all about revenue."

Another idea pushed by a group on Council is to take money from the year-end surplus, which will be at least $50 million. But Nutter has come out against that.

Hearings on the proposals are slated for next Friday at 10 a.m.

Given the time constraints, Council President Anna Verna said that Council could delay its summer break - its last session is now scheduled for June 16 - and keep voting until June 30.