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Rejecting Mayor's School Bailout, Council Eyes Hikes in Parking and Business Taxes

By Mike Dunn

PHILADELPHIA (CBS) -- City councilmembers today began the formal process of thumbing their noses at Mayor Nutter's school funding bailout plan by unveiling a series of bills that offer only about three-quarters of what the school district had sought.

The School District of Philadelphia wants $103 million from the city, but Council majority leader Curtis Jones says that's not happening.

"Members have come to a consensus that we should at least do the 80 to 84 million dollars worth of deficit," Jones told KYW Newsradio this morning.

And City Council is rejecting the mayor's plan to raise property taxes by nearly ten percent.

"I think it's pretty clear that Council does not want to raise the real estate taxes at the level the administration is arguing," says councilman Bill Greenlee, "so we're looking at possible other options."

So, instead, three measures were introduced: one that raises property taxes by about four percent, one that raises the city's Use and Occupancy (U&O) tax, and one that raises the tax on off-street parking.

These three changes -- along with sales of tax liens -- are expected to raise about $70 million to $80 million, almost enough to cover the district's projected deficit.

City Council president Darrell Clarke says the measures will be debated next week.

"What we want to do today is have a series of options to try to get close to resolving the school district's deficit from local coffers," he said.

Clarke knows that members will now get an earful from business owners who pay the U&O tax, and from parking garage owners.

"I anticipate we will," he acknowledged.  "But we've also gotten an earful from the residents of the City of Philadelphia because we've continued to hike their real estate taxes.  There's nothing more important than a child's education. But the simple reality is, this annual school district crisis is a challenge."

In fact, the Greater Philadelphia Chamber of Commerce is already opposing the hike in the U&O tax.

"We'd prefer not to see the Use and Occupancy tax increase this spring," said the group's policy director, Joe Grace.  "It went up 18 percent just three (budget) cycles ago. It does send a signal to businesses that can move (out of the city) that, here we go raising that tax again!"

Councilman Bill Greenlee, like Clarke, knows that however this is settled, someone will be unhappy.

"Every time we propose any kind of increase, there's going to be somebody that thinks it is unfair to them," he said today.  "And I get that. (But) we're politicians not magicians, so we have to figure out some way to find what we'd like to think is a middle ground here.  And everybody's middle ground has a different middle."

Council needs resolution on this question, and the entire city budget, before it adjourns on June 18th.



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