Seen this movie before? I know I have.
The Philadelphia school system is broke, in a financial crisis even worst than the last one, and, with the clock counting down on fiscal Armageddon, we have to figure out a rescue plan.
Today Mayor Michael Nutter rolled out this: a 50 percent increase in the liquor-by-the-drink tax, from 10 to 15 percent, a brand-new $2 a pack city cigarette tax, and a pledge to do so much better collecting existing taxes that we’ll net an extra $28 million for the schools.
However likely or wise those ideas are, they don’t nearly solve the schools’ financial problem. The district will need another $80 million or so from the state, whose governor shows no interest in the subject, and concessions from its teachers union worth more than $100 million.
Maybe it has no better chance than the Ghostbusters’ plan to defeat Gozer — “cross the streams” — but I can’t say I have a better idea.
Tax policy on the fly
I will say it gives me the willies to make changes in tax policy in a panic. I remember one long night in 1988 when City Council and the mayor were straining to balance the city budget. When the sun came up the next day, the “solution” included at 60 percent increase in the city’s real estate transfer tax.
That was eventually regarded as a terrible idea, and most of the increase was rolled back.
Now we’re talking about a couple of major tax increases that will affect city retailers. I don’t worry much about how much smokers spend to feed their habit, but they aren’t the only ones that will be affected by a big increase in city cigarette prices.
According to The Campaign for Tobacco-Free Kids, the average state tax on cigarettes is $1.48 a pack. Some cities have taxes of their own. Many don’t.
Maybe it’s the right thing to do, but I’m a big believer in extensive public hearings on substantive legislation. You just can’t anticipate the consequences of what you’re doing until you let all the affected parties have their say. I say this knowing that a longer process lets special interests mobilize their lobbyists, which isn’t necessarily a good route to good policy either.
What about the rest of it?
When I asked Mayor Nutter today if he really thought the state would come up with new money, he said a lot of Republicans in counties across the commonwealth are complaining about shortfalls in school funding, so Philadelphia won’t be making its case alone.
There’s some hope that state officials will be encouraged to be helpful if they see unions making concessions here, and maybe union leaders will be encouraged if they think the state will really step up. It’s all pretty tenuous, and it has to come together in a hurry.
But there’s a school of thought that says lawmakers will only do tough things under pressure, so hurrying is the only option.
The one part of the plan I’d normally be most skeptical of — the promise of $28 million from more aggressive tax collection — is looking doable to me.
It’s a gut feeling, and I can express it in two words: Tom Knudsen. He’s Nutter’s new “chief revenue collections officer,” and I’ve been impressed with him since he was a consultant for consumer groups fighting utility rate increases in the ’80s.
Knudsen did great things at the Philadelphia Gas Works, and a short conversation with him today gives me confidence — that and the past ineptitude of the city revenue department. There must be plenty of collectible money out there.