Update: Legislation that would enable Philadelphia to levy a $2-per-pack tax on cigarettes passed the Pennsylvania House of Representatives by a 119 to 80 vote Wednesday night.
This after a whirlwind of political deal-making and maneuvering by ideologically entrenched interests on both sides of the aisle.
Having escaped the House Rules Committee by unanimous consent, the cigarette tax bill (HB1177) faced a vote before the full House.
There it passed with the approval of 74 democrats and 45 republicans.
The Philadelphia School District had been waiting for the state to authorize a city cigarette tax in order to help close a $93 million budget gap.
With this enabling legislation, city officials expect the cigarette tax to generate $40 to $45 million in its first year and nearly double that in years to come.
In Harrisburg, the measure had been a source of continuous ideological struggle pitting top Republicans who control the House against the mostly Democratic delegation representing Philadelphia.
House Republicans had said that they would only allow a vote on the matter if the Philly delegation compromised on key Republican issues.
Before Wednesday evening’s committee vote, the pension reform legislation favored by Gov. Tom Corbett was resurrected out of an unsupportive committee after being sent there Tuesday in large part due to Rep. Eugene DiGirolamo, R-Bucks. (DiGirolamo said House GOP leaders plan to postpone a vote on the public pension legislation until the fall, according to the Associated Press.)
A last minute amendment was also added to the cigarette tax legislation that allows organizations hoping to open new charter schools in Philadelphia to make appeals to a state board if denied by the Philadelphia School Reform Comission. As is, these matters are the sole purview of the SRC.
Some onlookers criticized this addition, saying it will undercut the school district’s ability to manage charter growth, and thus cause already costly charter payments to grow exponentially.
“It was clearly a concern for the delegation,” said State Rep. Cherelle Parker, D-Philadelphia, “but in weighing the immediate problem in front of us, we decided to get the recurring funding for the school district. Was it an easy decision? No, but we think we made the right decision.”
Parker, who is the chair of the Philadelphia delegation, said she was “extremely pleased that republican leadership and the governor worked with us on this,” adding that it was “very much a regional vote” that “showed the unity of the five-county Philadelphia area.”
All members of the Philadelphia delegation voted for the measure. Parker said Rep. John Taylor, R-Philadelphia, did a “yeoman’s job” helping to organize votes.
Some in the delegation at first resisted the cigarette tax, Parker said, arguing that the state should provide other funding sources to properly fund schools.
Philadelphia teachers’ union President Jerry Jordan called the passage “a huge victory.”
Helen Gym, leader of Parents United for Public Education, praised the measure as a “unified victory for Philadelphia schools,” but said, “we have serious concerns about last minute amendments which may have been inserted into HB1177, the language of which have never been reviewed by the public.”
The school district did not reply to a request for comment.
The state budget approved by both the House and Senate included an additional $12 million for the district in a Ready to Learn block grant. Assuming both the budget and the cigarette tax achieve final passage, as expected, the district’s gap will be reduced to under $40 million. The exact figure would depand on how much is actually collected by the cigarette tax.
Regional rift becomes more pronounced
On the cigarette tax issue, House Republicans didn’t fit into a single box.
Broadly speaking, the House leadership was willing to allow the a vote on the cigarette tax if they could get something they’ve wanted in exchange.
Far-right Republicans who’ve taken a “no-tax pledge” had been unmoved by the school district’s pleas.
Suburban Philadelphia Republicans had been more supportive.
Rep. Stan Saylor, R-York, majority whip in the House, fell into the former category.
“Members of the House simply want Philadelphia to come forward and help solve some of the problems of the commonwealth, instead of sitting there thinking that Philadelphia gets to have a pass, and everybody else will put up the votes to help Philly,” he said in an interview before the vote.
So what are those issues? Saylor said it’s more than just bringing state pension costs down and privatizing liquor sales.
“It’s not just about pensions,” he said. “That’s an issue that’s currently there. Philadelphia never puts up the votes to help any other parts of the state. Never. And that’s the key word. Never. You cannot continue to ask Republicans, Democrats, people from different parts of the state to solve your problems if you’re not willing to work as a team to solve the problems in other parts of the state.”
Saylor said if the delegation didn’t compromise, then the city should get money for schools by raising city property taxes.
“You don’t want to raise your property taxes, fine,” he said. “But we want solutions to our problems as well.”
‘A dumb idea’
Before the vote Rep. Ron Miller, R-York, repeated a theme heard among many in the Republican caucus.
“A Philadelphia cigarette tax, a $2-per-pack increase, is a dumb idea,” he said. “I think it just leads to black markets and people buying cigarettes outside of Philadelphia County, but if it’s what they really want, I can support it.”
Miller said he’d pledge his support only if he got the signal from leadership that the Philly delegation was appropriately compromising.
In an interview earlier Wednesday, Rep. Kate Harper, R-Montgomery, said she’d vote for the cigarette tax authorization.
“I’m not sure it’s really wise, because I also think that people could just drive to the ‘burbs and buy cigarettes … but if this is what they think they need, I’m OK with that.”
And, as Parker noted above, some Democrats in the Philadelphia delegation originally opposed the measure.
“I’ve talked to people from Philadelphia who don’t want the cigarette tax, and it surprised me, because I thought they would all be on board with it, as, I, a suburban legislator, am willing to be in board with it to help out their schools,” said Harper.
Harper also supports Corbett’s pension reform plan.
“We’re talking about more money for Philadelphia schools. Why does Philadelphia need more money?” she asked. “Hmm. Maybe because it’s also paying pension payments that are getting bigger and bigger.”
Rep. Duane Milne, R-Chester, said he’s sympathetic to the district’s needs, but feels allowing just one city to pass a cigarette tax would be a bad precedent, so he’d vote against it.
“There is an argument to be made about tobacco taxes in this state, but I think we need to start to look at doing that on a statewide basis, rather than starting to do some cherry-pick, slippery slope kind of approach,” he said in an interview before the vote.
Milne falls into a camp that remains skeptical of the Philadelphia School District’s ability to appropriately manage its finances – despite all the austerity measures the district has undertaken during Superintendent William Hite’s tenure.
Milne supports legislation that would call on the Philadelphia controller to conduct a forensic audit of the district’s finances. (State Auditor General Eugene DePasquale began an audit of the school district earlier this year.)
Philly delegation leader won’t compromise on pensions
Rep. Cherelle Parker, chair of the Philly delegation, had continually said she would not compromise on pensions.
Philadelphia education advocates rallied around this opposition.
“You have people saying, ‘I want you to give something that’s extremely important to you, and I will give you something that’s not that important to me.’ That is not an equal trade, and so that becomes the most cynical form of politics, and we’re talking about children here,” said Susan Gobreski, executive director of the Philadelphia-based Education Voters of Pennsylvania.
“The fact that you have people willing to play the game in that way is extremely disturbing,” she said.
Tuesday night, House Democrats tried to get the cigarette tax passed along with the House’s larger fiscal code bill.
The four Republicans from the Philly suburbs who sit on the Rules Committee were in favor of the vote: William Adolph, R-Delaware; Robert Godshall, R-Montgomery; Thomas Killion, R- Chester and Delaware; and Katherine Watson, R-Bucks.
But Turzai took it out of the bill, saying it wasn’t “germane” to the tenets of the legislation.
Before the House voted, Rep. Daryl Metcalfe, R, Butler County, urged lawmakers to vote ‘no,’ calling the the measure a regressive tax that would negatively affect poor Philadelphians from the “inner city” who were “addicted to nicotine.”