Tax bill has Fumo stamp

Posted: May 10, 2012

He may be behind bars, but former state Sen. Vince Fumo is still casting a long shadow over Philly policy debates.

As City Council contemplates how to provide protection for homeowners whose tax bills could soar under Mayor Nutter’s proposed property-tax plan, a tax break passed by Fumo in 1988 may prove crucial.

The bill Fumo ushered through the Legislature 24 years ago allows the city to give tax relief to longtime residents of gentrifying neighborhoods. But to use the power, Council had to decide how much relief to grant and which sections of the city would be eligible — and it never could reach agreement.

Council President Darrell Clarke last week introduced a package of tax bills designed to protect vulnerable homeowners, and among the bills was gentrification protection that utilizes the authority Fumo got for the city.

“He was an individual who, despite some of the challenges on the legal side, he had significant knowledge about budgets and was clearly a person who left his mark,” said Clarke of Fumo, who is serving a five-year federal prison sentence for corruption.

Nutter has proposed moving the city to a property-tax system based on market values, known as the Actual Value Initiative (AVI), which could drastically increase bills in neighborhoods where property values have risen. Nutter’s AVI plan would also bring in an additional $94 million for the troubled school system. Critics call it a back-door tax hike, but Nutter says he’s just capturing the increase in property values.

Clarke’s proposed gentrification bill would offer a tax break to a homeowner of at least 10 years whose home’s market value has increased due to development. The amount of the break is not yet clear, and Clarke said he’d like to add a means-based qualification to gear it for low-income residents, but that would require state approval.

Meanwhile, Councilman Jim Kenney said he’s working on legislation that would offer tax breaks to longtime residents in neighborhoods where a lot of people benefit from 10-year tax abatements for new construction. Kenney was working for Fumo when the gentrification legislation was passed.

“The Council at the time couldn’t come to the conclusion to give just the gentrified areas the long-term-owner property-tax relief; they wanted to give everybody property-tax relief and it wasn’t intended that way,” Kenney said. “I still think it applies to a number of neighborhoods.” n

Contact Catherine Lucey at 215-854-4172, luceyc@phillynews.com or follow @phillyclout on Twitter. Read her blog “PhillyClout” at www.phillyclout.com.

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