Philadelphia schools awaiting taxes from city, state

Part 86 of 86 in the series Educating America

TAXING PLANS: Philadelphia schools are left waiting to see if sales tax will be approved.

By Maura Pennington |

PHILADELPHIA — The Pennsylvania state House won’t provide additional revenue for Philadelphia schools until the City Council approves higher sales taxes.

The General Assembly last year approved a bill allowing Philadelphia to permanently extend a temporary 1 percent sales tax within city limits. The first $120 million collected from the tax would go to the financially troubled School District of Philadelphia, with any additional revenue to fund debt service payments and the municipal pension fund.

The school district’s new budget is counting on the revenue from the sales tax extension, but council has yet to approve it. Instead, the city wants to split the revenue with the district and add a new $2 per pack tax on cigarettes.

The state government would have to sign off on the new cigarette tax, and House Republicans say that’s not going to happen.

“The city has not lived up to its word from last year’s agreement extending the sales tax,” said Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny. “There are and will be no plans to enact another tax on Philadelphians until they fulfill their own obligations.”

Philadelphia Mayor Michael Nutter has been in Harrisburg in recent weeks to lobby for a change in the distribution of that tax money.

Nutter is looking for a 50-50 split between the schools and the city, according to his press secretary, Mark McDonald.

With the understanding that this shortchanges the school district, the city would make up for the shortfall with the new cigarette tax, projected to bring in at least $70 million annually.

Although Republicans aren’t interested in new taxes, Philadelphia officials are hoping to change their minds before the state budget process in June.

Bill Patton, spokesman for House Minority Leader Frank Dermody, D-Allegheny, said House Democrats see a need to help the city and the school district.

“The current makeup of the House, however, prevents us from bringing anything up without Republican support,” Patton said. “At this point, they’re in the driver’s seat.”

Meanwhile, the district’s budget is in limbo.

Contact Maura Pennington at and follow her on Twitter @whatsthefracas.