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Politics & Government

Corbett Signs Philadelphia Schools Cigarette Tax Bill

Gov. Tom Corbett has signed a long-awaited measure to let Philadelphia levy a tax on $2-per-pack tax on cigarettes to raise money for its schools.

Supporters heralded the bipartisan effort required to pass the tax authorization. The tax, along with a city sales tax increase and borrowing, will help the Philadelphia school district bridge an $81 million deficit.

"We're thrilled and, for the first time while in Harrisburg, I'm actually smiling and celebrating," said district Superintendent William Hite at a bill-signing ceremony Wednesday. A lobbyist leading the effort to pass the proposal let out a happy whoop.

The measure also contains a change allowing city charter schools to go to the state to appeal rejected applications. House Republicans insisted on the provision, already wary of appearing to bail out Philadelphia schools by allowing higher taxes.

Sen. Anthony Williams (D-Philadelphia) said he's "grateful" the cigarette tax is finally law. But with Corbett on his left, Williams said education spending across the state remains a problem, with a funding formula and other reforms at its root.

"I'm not elated. I'm not kicking up my heels. I'm not clapping applause, I'm not patting myself on the back," said Williams, who is expected to launch a bid for Philadelphia mayor. "Because for all the niceties ... there's a lot more work that needs to be done to get a first-class education."

Behind him, Hite nodded.

Philadelphia officials pushed for passage of the cigarette tax before the start of the school year. But the bill stalled, bogged down by unrelated items like an expansion of an economic development program and hotel taxes for other counties. Those provisions were removed.

The cigarette tax is effective October 1. It will also apply to little cigars.

Many have voiced concerns that a higher cigarette tax in Philadelphia could be avoided easily by consumers who are able to cross the county line to buy smokes. State Revenue Secretary Dan Meuser referred to it as "slippage," and said it's very much expected to eat into revenue collections. In a perfect world, the tax would yield $60 million annually.

"The slippage could be as much as 10 percent of that, maybe even 15," said Meuser.