Faced with an $81 million school budget deficit, Philadelphia is hoping for $45 million in revenue from a $2 per-pack cigarette tax increase. This seemingly quick fix is misguided for a number of reasons.

The Pennsylvania legislature must authorize a local tobacco tax increase in Philly, and this week Pennsylvania House leadership decided not to call a vote due to a lack of consensus. While Philadelphia Mayor Michael Nutter is in panic mode over the legislature’s delay, it’s good that lawmakers are taking a step back.

First, Philadelphia should not be making education funding increasingly reliant on more people smoking. Second, such a tax hike would be borne by those who can least afford it, as the average income of smokers is well below the overall workforce average. Third, tobacco taxes are a declining and volatile source of revenue. Tobacco taxes often miss their revenue projection due to the ease of tax evasion and they incentive black markets. Even if Mayor Nutter gets his tobacco tax hike, it will likely only serve as a placeholder for future tax hikes on the general populace.

Additionally, Philadelphia’s school budget problems are on the spending, not the revenue side of the ledger. The Commonwealth Foundation recently published findings on Philadelphia school district spending over the last decade. Since the 2002-2003 school year, revenue for the school district has increased by over $1 billion to $2.97 billion. Meanwhile, there has been no improvement in testing scores since 2009, and a staggering 80 percent of students are not proficient in both math and reading.

Mayor Nutter stated there will be 1,300 face layoffs as well as a delayed start to school if the money isn’t given to them. The numbers tell another story.

Over the last decade there already have been layoffs in the schools despite a $1 billion revenue increase. Philadelphia has witnessed a 6.71 percent decrease in teachers per classroom as well as a much more staggering drop of 25.32 percent in enrollment. That has brought the student teacher ratio down to 15.63, far lower than the predicted 40 students in a classroom Nutter is predicting.

philly schools spending per adm

Why the drop in students? Because families are fleeing the district. Currently 44,000 students are on waiting lists for better performing charter schools. The problem lies not in lack of tax revenue, but with the education system itself. Higher taxes will not rectify the achievement gap of Philadelphia students compared to those across the country and globe.

After being hit with over 20 federal tax increases over the last five years, the last thing Philadelphia needs is higher taxes at the local level. Only reform, not more revenue, will cure what ails Philadelphia schools.


Photo Credit: Rob Rudloff