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Cigarette tax not reliable to sustain Philly schools

cigarettes ashtray stub out cigarette smoking quitting Smokers who used e-cigarettes were twice as likely to quit as those who used other aids like gums and patches.
Credit: Wavebreak Media

The political football is now solely in Gov. Tom Corbett’s court, after the Legislature passed the state budget on July 1. But will he sign it? Will he veto it?

These two questions have been the speculations, with the governor showing little signs one way or the other as to what he plans to do. He's got until July 11 to make a decision or the bill will be become law.

Predictions on his decision have been mixed, but one thing has become certain — Corbett, an unpopular governor with low approval ratings and an approaching election, has become a lame duck with little power over his own party.

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The budget, which was constructed by Republicans, doesn’t please the governor. Republicans left out pension reform for state employees — something Corbett has been pushing for to help rein in state spending. According to the governor’s budget office, Pennsylvania’s pension system debt outweighs its assets by more than a combined $47 billion. Pension reform will now need to be taken up by Republicans at a later date. The budget also left out another goal the governor has failed to achieve: privatizing the state’s liquor sales.

Both privatizing liquor sales (a no-brainer) and reforming the pension system are both topics that should be widely popular with Pennsylvanians, but Corbett has failed to connect the dots in a meaningful way with voters.

Another aspect of the budget that goes against the governor’s “no new taxes” pledge is the Legislature approving a $2 cigarette tax in Philadelphia. The cigarette tax will aid the city’s public school system. The city’s school system continues to find itself in a multi-million budget shortfall. After some debate, and pressure from Mayor Michael Nutter and others like the City Council, the Legislature was convinced the plan was a good idea. The vote passed the Pennsylvania House of Representatives by a 119 to 80 vote.

The Mayor and City Council quickly celebrated the new tax as a win for Philly schools.

“I sincerely hope Governor Corbett keeps his word and signs this legislation into law,” City Council President Darrell L. Clarke said. “I will continue to work with my colleagues in City Council and in the General Assembly toward truly adequate funding for all public schools in the Commonwealth of Pennsylvania. Let us endeavor to not just keep our schools afloat, but to enhance learning environments for our students. We should not settle for merely stopping a decline in our schools.”

The money raised from a cigarette tax is estimated to be around $45 million in the first year and double that in years to come. This number, often cited in news reports, could be a bit misleading for years to come. It’s likely that number is unrealistic. When smokers start quitting, buying cigarettes outside the city or turn to the black market, the taxes raised will decrease. In New York, for example, where cigarettes taxes are some of the highest in the nation, the state also leads in illegal cigarette smuggling and sales. Philadelphia will also soon rank high in that department.

The fact is the cigarette tax will likely be an unreliable way to fund the Philadelphia school system. This method was chosen because smokers are a vulnerable and demonized group politically, not because it was the best method to keep the school system afloat.

Corbett has remained quiet on these issues. His moves in the days ahead will further prove whether he is a lame duck. It’s likely, in my opinion, he will sign the budget. Although he clearly is not happy with the outcome.

 
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