Nutter Proposes Alcohol, Cigarette Tax Hikes To Fund Schools - FOX 10 News | myfoxphoenix.com

Nutter Proposes Alcohol, Cigarette Tax Hikes To Fund Schools

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PHILADELPHIA -

There's a controversial proposal in the city of Philadelphia that would have both residents and visitors to the city seeing higher taxes.

It's all to raise about $95 million for the Philadelphia School District, which needs to figure out how to come up with lots of money – and fast.

On Wednesday morning, Mayor Michael Nutter and schools Superintendent Dr. William Hite gave an update on the district's financial situation during a news conference at City Hall.

Right now, the district is about $304 million in debt, and programs like sports and band are on the chopping block.

Nutter's proposal to provide $95 million in new funding to district is a revenue package that includes an increase in the liquor-by-the-drink tax, a new city cigarette tax, and money generated from improved tax collection efforts.

The proposed liquor by the drink tax would increase the existing tax from 10 percent to 15 percent, taking effect on July 1 and generating an additional $22 million.

Nutter said the new, $2-per-pack City cigarette tax, if implemented by Jan. 1, would generate $45 million for the district during its first half-year. Approximately $1 million generated during the first half-year would fund the Philadelphia Department of Public Health's Smoking Cessation Program.

The mayor's office says these two tax proposals require Pennsylvania General Assembly authorization as well as City Council approval. Both bills will be introduced shortly.

Additionally, Nutter detailed that revenue generated by improved tax collections would generate an additional $28 million in the next fiscal year. The collections improvements will focus on delinquent real estate taxes, liquor-by-the-drink, use and occupancy, and school income taxes.

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