Council: No to business tax hike

Business owners exhaled Tuesday as a proposal to raise extra money for schools through an increase to a business tax appeared dead.

"It's not in the best interest of any level of business," said Councilman Jim Kenney, who described the proposal to raise $45 million for schools by raising the use-and-occupancy tax as "pretty much dead."

Several Council members said that there weren't the requisite nine votes to raise the levy, which taxes the square footage of the business portion of a property. The business community has been voicing concerns in recent days.

Council last week gave preliminary approval to hike the use-and-occupancy tax as part of a complicated budget deal that would overhaul the city's property-tax system and collect $40 million more in property taxes.

The use-and-occupancy increase was viewed as a way to limit the hit that homeowners would take under the move to a property-tax system based on market values, known as the Actual Value Initiative (AVI).

But Council members have raised concerns that small neighborhood businesses could be hit twice with a move to AVI and an increase in the use-and-occupancy tax.

With the use-and-occupancy increase seemingly off the table, the question now is will AVI survive and how much money will the schools get? Nutter has sought an additional $94 million for the embattled school district. Finance Director Rob Dubow said the administration remained hopeful that the district would still get that money.