Philly Cigarette Tax Smoke and Mirrors

Member Group : Freindly Fire

One can strongly argue that the greatest contribution of our city and state officials is comic relief. And that’s exactly what we have in Harrisburg, as 114 representatives, 39 senators and one lame duck governor just passed the biggest joke legislation in recent memory – an increase in the tax on cigarettes bought in Philadelphia to $2 a pack. The tax revenue is intended to bail out the Philadelphia School District – a black hole that sucks endless amounts of taxpayer money into its coffers – despite its monumental failure to educate.

And the cycle continues: even though the district has more than enough money (over $20,000 per student, per year, yet somehow that’s not "fair"), it cried poor, and, like clockwork, got rewarded with more funding by gutless elected officials. The tragic punchline? The district will continue to score an "F" on the only test that matters: our children’s education.

Any seventh-grader could tell you that the cigarette tax will not only fail miserably in achieving its goal, but will, in fact, hurt Philadelphians. Consider:

1) The cigarette tax will supposedly raise $49 million, though, not surprisingly, projections continue to change. Since the district maintains that it has an $81 million deficit, a gap still remains. And given that Philadelphia taxes damn near everything already, making it one of the highest-taxed cities in the country, what’s next?

2) How exactly is $49 million – out of a $2.6 billion budget – going to help improve anything? Answer: it’s not.

3) It seems like all the justifications we have heard for more taxes and more funding are rooted in saving jobs. But let’s be honest: A) the district is massively inefficient and bureaucratically top-heavy; thousands of jobs can, and should be, eliminated, and B) the only thing that matters is the children, but like always, much of the money never finds its way to the classroom, where it’s needed most. More money doesn’t educate children; accountable educators do.

4) This column has discussed common sense, free-market reform measures ad nauseam. None have been implemented (one of Gov. Corbett’s many failures), nor will they be, because too many politicians fear the teachers’ unions. Until the status quo is turned upside down, nothing will change. All the money in the world won’t improve a thing, and once again, the only ones who really matter – the students – take the hit.

5) The results for standardized state exams are in, and are right where you’d expect – in the toilet. They’re worse than last year’s scores, with reading and math achievement dropping even further. Bottom line: After spending two-and-a-half billion dollars last year, fewer than half of all students met state standards. That’s insane.

6) Republicans who voted for the cigarette tax either A) know it won’t solve anything but knuckle under to pressure, or B) really think throwing more money into a bottomless pit will work. On either count, they deserve to be removed from office by the voters. Here’s hoping.

7) Now for the real world implications of the tax:

First, the anticipated revenue projections are a joke, and won’t come close to being met. Why? Because Philadelphia isn’t New York or L.A., where it would take an hour just to get outside the city limits to buy cheaper cigarettes. In Philly, it’s a quick drive to the surrounding counties where a pack of smokes is significantly cheaper.

And remember that Philadelphia already imposes an 8 percent sales tax (not 6, like the rest of the state), driving up the price that much more. Bottom line: smokers aren’t going to quit, but will simply buy their cigarettes elsewhere.

One wonders if the budget gurus factored in this "bootleg" factor of Philadelphians buying their cigarettes outside the city when they compiled their revenue projections.

Second, the tax will significantly hurt small business owners. Customers who normally bought their cigarettes (and numerous other things) at the corner store now will take their business elsewhere – a boon to convenience stores right over the border but a death knell to city shop keepers. And as they go by the wayside, so do jobs, as well as the income and property taxes they generate.

Nothing like putting more Pennsylvania small business owners out of business. One would think the job of the governor and the Legislature is to keep people employed and grow the economy, instead of forcing businesses to close, move out of state, and put people out of work. Guess not.

Rather than a "smoke" and mirrors approach, the governor and Legislature should have sent the message that enough was enough; instead of sending more blank checks to Philadelphia, it was time to finally overhaul a failed educational system. In doing so, they would have won the support not just of suburbanites sick of seeing their tax dollars wasted, but also the parents of those trapped in abysmal Philadelphia schools with no way out.

Instead, the promise of their new tax law will go up in smoke, and with it, another generation of lost children.

Chris Freind is an independent columnist and commentator. His print column appears every Wednesday. He can be reached at [email protected]