Phila. property tax hike scrapped

PHILADELPHIA - May 11, 2009 - Mayor Michael Nutter and city council have reached an agreement on a budget plan that scraps the mayor's proposed two-year property tax increase.

Instead, the three-year increase in the sale tax would be extended to five years.

However, that move would require approval from lawmakers in Harrisburg, which will not be easy.

But, the president of city council, Anna Verna, says they are ready.

"This is merely the first step. We must have approval from Harrisburg, and I'll tell you with the council and mayor working together, we will go to Harrisburg speaking in one voice. We are unified," Verna said.

Verna stood with 10 members of city council at her news conference. They need nine votes to pass it, so clearly the votes are there. Verna said most of those who were not there are onboard as well.

It has been a contentious budget process.

The city trying to fill $1.4 billion budget gap by raising sales tax by 1%, raising $115 million a year. They will also stop making payments to the pension plans over the next two years, saving $230 million.

"This budget agreement reflects the reality of the legislative process. In essence, the key word here is 'compromise.' We're not talking about winners or losers. The only winner that matters is the citizens and tax payers of Philadelphia," said Mayor Nutter.

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