Two of the state representatives from the Philadelphia area want to wage the tax relief that usually comes to the city from the state taxes that are put on Pennsylvania casino profits to be given to the Philadelphia School District in order to help close a budget deficit that they have been having. The Democrat Representatives Rosita Youngblood and Mike O’Brian stated earlier in the week that they are going to be introducing legislation to divert this income for five years. The duo commented in a news release and stated that “the temporary cash infusion of about $88 million would give the district time to consider, implement and benefit from changes being suggested by the city’s School Reform Commission.”
Philadelphia’s wage tax is currently close to 4 percent for the residents of the city, and 3.5 percent for those non-residents. The gaming taxes were being used to reduce the property taxes in the state, but were then targeted at the wage taxes in Philadelphia alone. The state’s Gaming Control Board expects that the casino taxes are going to result in over $86 million in wage tax relief for everyone in Philadelphia from the beginning of July to the end of June in 2013. The Mayoral spokesman Mark McDonald stated that the Nutter administration is opposing the proposal. “We would either have to increase the wage tax for residents and nonresidents by about a half-percentage point or we’d be dealing with a major hole in the budget,” McDonald said.
O’Brian and Youngblood stated that their proposal is not going to increase taxes, and they instead are calling it a “temporary diversion of funds”. They are also blaming Governor Corbett and the Republicans in the General Assembly for the financial turmoil that is going through the state and the city. They are being accused of “turning their backs” on the school district through many budget cuts that were done. They also called Mayor Nutter’s plan to help raise money for the district through reassessing the overall value of the properties in the city a “Chicken Little response.”
Nutter’s initial plan is to move to a property tax system that is going to use market values that will bring in an additional $94 million for all of the schools in the area. A lot of the critics are calling this a “backdoor” type of tax hike, but Nutter also stated that he is just capturing the rise in the property taxes and values. He also stressed the current property tax system and how it is inaccurate and definitely unfair. Corbett also went on to state that he did not ignore any of the schools’ woes, and that his proposed plan and budget for this upcoming year will be able to provide more money to the district then the other plan. Although, there are many critics that debate his budget math.