Monthly Economic Report – New Taxes Generate $146 Million for Schools

Audit Date: July 2, 2015
Audit Categories
  • Financial
Controller: Alan Butkovitz

Executive Summary

For Immediate Release
July 2, 2015

Contact: Brian Dries

New Taxes Generate $146 Million for Schools
City Controller’s economic report reviews Philadelphia’s Cigarette Tax
& Sales Tax revenues

May 2015 Economic Report

PHILADELPHIA – City Controller Alan Butkovitz today released the latest monthly economic report that indicated new tax revenues have provided the School District of Philadelphia with $146 million in the first year.

Since the $2-a-pack Cigarette Tax and one-percent Sales Tax extension went into effect September 2014, yearly revenues through May 2015 have totaled $45 million and $101 million, respectively. These taxes were implemented to generate additional funds for the School District. They are collected by the Pennsylvania Department of Revenue and then dispersed by the Pennsylvania Treasury.

The average monthly collection for the Cigarette Tax was $5.6 million. With one month of revenues still to be recorded for the fiscal year, this tax category is expected to meet the estimated $49 million for the first year. While this is a significant amount of new revenues for the School District, it was determined that the state has charged the School District almost $700,000 so far this year for administrative costs, which is money that does not go to the schools.

Monthly Sales Tax revenues for the School District have averaged $11.2 million. The yearly total through May was $19 million below the FY2015 estimate of $120 million. With revenues still to be recorded for the fiscal year, it is uncertain if the projected amount will be realized.

In addition to reviewing new taxes for the School District, the Controller’s monthly economic report indicates that tax revenues for both the City General Fund and Pennsylvania Intergovernmental Authority (PICA) for May totaled almost $245 million, which is a 17 percent decrease from last May. This included $212 million in to the General Fund and almost $33 million as the PICA portion.