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Smokes for schools: The status of the city’s cigarette tax

Three months have passed since Tom Corbett signed in Philly's $2-a-pack cigarette tax. What will its long-term impact be in 2015?

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In a press conference on Monday, Mayor Michael Nutter recapped 2014 and spoke broadly about the city’s plans heading into the new year. In addition to combating violent crime and strengthening community relations, the mayor emphasized that education will once again be on the forefront of his office’s agenda in 2015.

While he didn’t get into the specifics of closing the Philadelphia school system’s $357 million deficit, he did mention his hopes that the cigarette tax, which went into effect last September, will continue to generate revenue for schools.

When prompted about hard numbers, the mayor was reluctant to draw any conclusions, saying that we need to give it a full year.

The city’s Director of Finance Rob DuBow told AL DÍA that the tax had already met the projected goal of raising $5 million per month.

“For the first two months, it came out to over $14 million,” he said. “But you have to take into account that most shops still had backed up stock from before the tax went into effect. Still, we’re looking at $5 million a month.”

But will cigarettes continue to generate revenue in the long-term?

For some loose cigarette salesmen, the tax has been a boon. One such salesmen in Center City sells Newport 100 cigarettes, which he buys from outside city lines, them for as much as a dollar a piece.

“The tax has helped me out a lot,” the salesman, who declined to give his name, said. “Some guys out near 69th Street still sell them for 50 cents a piece, but here we sell them for 75 [cents] or a dollar.”

While these vendors might be able to turn a fast profit, for registered merchants and shop owners, the tax has received mostly negative and mixed reviews.

“Overall, my cigarette sales have gone down 60 to 70 percent,” a Center City merchant who runs a newspaper kiosk told AL DÍA. “The first couple of weeks after the tax, it was terrible. I sold maybe five packs a day.”

When asked about the long-term success of the tax, the merchant, who also declined to give his name, was skeptical.

“Now it has gotten a little better as smokers are more used to the tax, but not much,” he said.

Just three months into the tax’s enforcement, its long-term impact remains too nebulous and far off to make predictions. Numerous merchant and consumer testimonies seem to corroborate the concerned predictions that were voiced right after Governor Tom Corbett signed the bill. From the mixed message it sends -- does the tax encourage smokers to continue smoking, or does it deter them? -- to the moral questionability of a tobacco-funded school system, there's no doubt that the cigarette tax was a last-minute bid to bring in fast cash for Philly’s schools.

Even if it meets its projected goal of raising $49 million for education by the end of the fiscal year, there’s still a daunting $308 million for the municipality to contend with in the next twelve months.

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