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How Philadelphia's City Council decided on a property-tax boost

A veteran Republican from Northeast Philadelphia was faced Thursday evening with about the most un-Republican thing he could do: Vote to raise taxes.

With protesters in the background, Councilman William K. Greenlee (right) participates in a Council hearing on the proposed soda tax.
With protesters in the background, Councilman William K. Greenlee (right) participates in a Council hearing on the proposed soda tax.Read moreALEJANDRO A. ALVAREZ / Staff Photographer

A veteran Republican from Northeast Philadelphia was faced Thursday evening with about the most un-Republican thing he could do: Vote to raise taxes.

"We can't just sit and do nothing - we would be rightly criticized for shunning our responsibility," Councilman Jack Kelly said Friday, explaining why he became the ninth vote for a 3.9 percent property-tax hike that finally ended almost dawn-to-dusk negotiations over how the city could send more funds to the ailing Philadelphia School District.

Kelly's move broke the deadlock among the 17 City Council members, deeply divided on how much extra money, if any, the troubled School District deserved.

A majority of Council members began the day unwilling to consider hiking taxes at all - not Mayor Nutter's proposed 2-cents-an-ounce tax on sugary drinks, nor versions of a property-tax increase of up to 10 percent.

Many were willing to raid the city's fund balance for up to $30 million, a move that would surely have triggered cuts to police, fire, and pools, among other sensitive areas.

In the end, Nutter, Council, and School District officials cheered the extra $53 million for the schools and a productive compromise. But it seemed no one was especially happy with the outcome.

School Superintendent Arlene C. Ackerman received just more than half of what she had requested.

Nutter failed in his quest, for a second consecutive year, to enact a tax on sweetened drinks, spurring questions about his ability to muscle his priorities through Council.

And most Council members wound up voting to increase major taxes for a third straight year, exasperating, among others, at-large Democratic Councilman William K. Greenlee, who acknowledged that he went back on a campaign promise by voting for the tax hike.

"People have the right to be upset, but sometimes you have to do what you have to do," he said.

By all accounts as affable a man as you'll find, Greenlee perhaps personified the all-around frustrations of the day when he confronted Nutter during a late-afternoon meeting in the office of Council President Anna C. Verna.

Nutter, angry that he lost the nine votes he had briefly locked in for a lesser version of his soda tax, was at that moment pushing Council to embrace a 5 percent property-tax increase instead of 3.9 percent hike that a majority of members already backed.

Greenlee wanted to know why the mayor was pushing for the additional property-tax hike when Nutter's own soda-tax proposal would raise no more - and possibly millions less - than the lower tax hike.

"It was one of the more mystifying things happening that day," Greenlee said.

The mayor's answer was either a pout or a counteroffer, depending on who recounted it, but five people in the room said it went something like this: "That's not the way I wanted it, so I want more money."

Nerves were frayed - and so, for the moment, was the Council-mayor relationship.

"I don't think it's going to be a long-standing problem if it gets resolved," Councilman James F. Kenney said. "But there were some raised eyebrows as to some of the tactics, and what was the endgame. . . . He seemed to be fixated on soda tax, and I still don't know why."

Nutter spokesman Mark McDonald noted that the mayor over a two-week period had persuaded Council to provide $53 million to the School District, when Council initially had shown little inclination to do so.

"That is a victory for schoolchildren and their families and therefore is in no way a defeat, politically or any other way, for Mayor Nutter," McDonald said.

On Thursday, rumors abounded: Nutter trying to sway Council's six retiring members with promises of jobs for their staffs; Nutter offering to rename a city animal shelter after Kelly (never happened, said the animal-loving Kelly); city workers instructed to ignore requests from Council members about anything from a broken city car to a malfunctioning computer (Managing Director Rich Negrin said no such instructions were issued).

Negrin, in addition to Nutter's government-relations team, was among several top mayoral aides who spent the day in Council chambers or right outside in the hallway.

By midafternoon, Nutter emerged from his office, determined to rebuild his nine-vote coalition for the soda tax. The most popular version included a 1-cent-an-ounce levy that would expire after two years, but it collapsed.

Councilwoman Maria Quiñones Sánchez, whose Seventh District includes a Coca-Cola bottling plant, said that at one point Thursday she "actually considered a 1-cent sugar tax . . . to put more money on the table for schools.

"But I'm no longer there."

Still working his cause, the mayor stationed himself in his old Council office and called members, one by one.

Not all responded.

Nutter later moved his effort down the hall, to Verna's office.

The beverage industry, specifically Coca-Cola, Pepsi, and Philadelphia bottling magnate Harold Honickman, had worked for a year to avoid a soda-tax reprise.

Big Beverage in March announced a $10 million grant to Children's Hospital of Philadelphia for obesity-prevention efforts. And the industry stepped up its political activity. A new political action committee, along with Honickman's family and company executives, gave $95,300 to City Council candidates in 2010-11, a substantial increase over the $10,600 that went to candidates in 2007's primary election. The local Teamsters, who haul the sugary drinks, gave an additional $8,000 in 2010-11.

And Thursday, standing outside Verna's office were either Honickman, Teamsters Local 830 chief Danny Grace, beverage lobbyist Ed Hazzouri, Teamsters spokesman Frank Keel, or all of the above.

Kelly hated the soda tax, convinced it would kill city jobs. And he was no fan of raising property taxes.

But he said a modest property-tax hike was the only way to avoid the soda tax - other than doing nothing or risking the steeper property-tax boost sought by the mayor. Kelly is retiring this year, so reelection was not a concern.

"It's the lesser of four evils," said Kelly, who asserted that dipping too far into the city's fund balance would have meant quality-of-life cuts.

Councilman Curtis Jones Jr. said the negotiations were complicated by Council's efforts to comply with the state Sunshine Act, which requires members to meet in groups of less than nine, which is a quorum and must be held in public. That meant at least three groups of members had to be shuttled in and out and briefed, leaving opportunities for new questions, new information, and new positions with each new group.

Said Jones, completing his first term in 2011:

"It was the most intense thing that I've ever had the opportunity to be a part of."