The $2 cigarette tax passes City Council
City Council yesterday approved a $2 tax hike on cigarettes to help fill the $304 million hole in the school district’s 2014 budget.
The tax, unanimously approved by council and championed by Mayor Michael Nutter, will still require state approval.
If approved, smokers would first see the price increase on Jan. 1, 2014. The hike is expected to generate $45 million. Cigarettes are not included in the city’s current tobacco tax.
Nutter’s other revenue-generating idea, the liquor-by-the-drink tax increase from 10 percent to 15 percent, has not made the same headway in council chambers. That increase, which would also require state approval, is expected to generate $22 million.
The city expects both the cigarette and liquor-by-the drink tax, along with plans for improved tax collections, to raise an estimated $95 million for schools.
Councilwoman Maria Quinones-Sanchez says her alternative plan, which would raise business’s Use and Occupancy tax, would raise $30 million. The bill will be voted on at next council session.
Superintendent William Hite requested $60 million from the city, $120 from the state and $133 million in union and non-union contract concessions to help close the deficit.