Nutter and Clarke meet on city's budget issues

A Council meeting could be added in late June, the body's president said.

Posted: June 21, 2012

After meeting behind closed doors Tuesday afternoon, Mayor Nutter and Council President Darrell L. Clarke offered few clues about how they would resolve a host of thorny budget issues in the dwindling number of days left in the fiscal year.

Council's final scheduled meeting before the summer recess is Thursday, but Clarke said there was a "strong possibility" that a meeting would be added on June 28.

Council must pass a budget before the start of the next fiscal year on July 1, or the city won't be able to spend money.

Council last week gave preliminary approval to two bills that would raise $40 million for the nearly insolvent School District, but would delay the implementation of Nutter's property tax reform effort for a year.

Nutter had proposed collecting an extra $94 million for the schools through the Actual Value Initiative (AVI), which would establish a property assessment and tax system based on the actual market value of real estate.

"It's not an 'if' question," Nutter said of AVI. "I think it's really more of a 'when' - and we're working on the when."

While Council has expressed general support for the reform effort, the citywide reassessment that would determine the new tax rate - and what individual property owners would pay - won't be completed until the fall.

Council members have balked at making the changeover without knowing the effects on taxpayers and voters. The administration has countered that delaying AVI could mean millions in lost property assessment appeals, once the actual values are known.

Nutter wouldn't say whether he still hoped to persuade Council to move ahead this year with AVI, which he called "clearly the most complicated tax matter the city has faced in a long, long time."

"Council's made it pretty crystal clear that they, as a body, want to see the property assessment system fixed. And certainly many members have expressed support for additional funding for schools," Nutter said. "We're going to continue to work diligently to accomplish those two goals."

Clarke, who labeled AVI the "most difficult and drastic tax proposal that we've seen, at least in my political lifetime," commended the mayor for taking on such monumental change.

"We want to make sure we do that correctly," he said. "So that will require all the time that's left on our clock."

Nutter and Clarke both refused to go into details of the two alternatives to AVI - one bill that would raise $20 million in property taxes under the current system and another that would raise an additional $20 million through the Use and Occupancy tax on businesses.

The property tax increase would represent a 3.6 percent increase on property owners' 2011 tax bill.

The Use and Occupancy tax faces significant opposition, and several Council members said this week that they considered the proposal dead.

"I think that has been fluid throughout this entire process," Nutter said. "Ultimately you won't really know who is for what bill until the name gets called [for] a vote."

Adding another Council session would allow for the bills now on the table to be amended Thursday and passed on June 28. But any changes would have to be agreed upon by Thursday to make the budget deadline.

"We will continue to talk to the administration," Clarke said. "Hopefully by this time [Wednesday] we'll be able to stand here and tell you that we've reached some conclusion."


Contact staff writer Troy Graham at 215-854-2730 or tgraham@phillynews.com, or follow on Twitter @troyjgraham.

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