Philly City Council passes $3.6 billion budget - without property-tax reform, but with a tax hike

Posted: June 30, 2012

City Council passed a $3.6 billion budget Thursday, officially delaying Mayor Nutter's planned property-assessment reform for at least another year, while nonetheless raising property taxes 3.6 percent.

The hike - the third property-tax increase in three years - would raise $20 million for the nearly insolvent School District of Philadelphia.

Coupled with $20 million from an increase in the use and occupancy tax on businesses, which Council approved last week, the district would receive $40 million in new money from the city in the next fiscal year.

That falls short of Mayor Nutter's goal of raising $94 million for a district already facing a $218 million deficit.

"We had been hopeful through this budget session that we'd be able to send more to the School District," Nutter said. "They have a very serious financial challenge."

The property-tax bill passed by a 12-4 vote, with Democratic members Jannie L. Blackwell and Bill Green, and Republicans Brian O'Neill and Dennis O'Brien, voting against.

Councilwoman Maria Quiñones Sánchez was absent.

The 3.6 percent increase would add $49 to the average annual property-tax bill of $1,358.

The money from the hike would not go directly to the School District. Instead, the $20 million would be doled out only after the district met conditions set by Council.

Council President Darrell L. Clarke's office was still drafting those conditions Thursday.

Several Council members complained that the School Reform Commission gave them just 24 hours' notice last weekend of meetings with two candidates for superintendent. Councilwoman Marian B. Tasco called it "unforgivable."

Council passed other capital and operating budget bills with near unanimity - Green cast the lone "no" vote on the operating budget - at its last meeting before the summer recess.

The bills passed with no time to spare - the new fiscal year begins Sunday. Without a budget in place by then, the city would not be able to spend money Monday.

Nutter would not say Thursday whether he would sign Council's budget compromise, but he did note that the operating and capital budgets were largely unchanged from what he proposed in March.

Those budgets include more than $4 million to hire 400 new police officers, $6.7 million to refurbish police and fire stations, $3 million for neighborhood libraries, and $9 million for rec centers and pools.

Council also added $5 million for commercial-corridor improvements, and the administration pared back its two-year plan to renovate LOVE Park from $20 million to $15 million.

Majority Leader Curtis Jones Jr. said the overriding message of this budget was "compromise," among the mayor, Council, and the interests of schools, businesses, and residents.

"I think we shared the pain. . . . we don't like going around raising taxes for anyone," Jones said. "But we do like our trash getting picked up on a regular basis, our children getting an education."

The budget and tax bills were hashed out over several t weeks. Because bills cannot be amended and passed in the same meeting, Council had to reach a consensus last week to meet the budget deadline. Thursday's votes were largely formalities.

The administration had asked Council to implement Nutter's property-assessment reform, the Actual Value Initiative (AVI), a system that would have taxed properties based on their market value.

But because a reassessment of all the city's taxable properties would not be completed until the fall, Council couldn't know what the tax rate ultimately would be.

Instead, the administration wanted Council to pass a formulaic tax rate to hit a revenue target. Council members began likening this approach to diving into water without being able to see the bottom, something Councilman Mark Squilla said in an anti-AVI speech that his mother warned him never to do.

Councilman W. Wilson Goode, who often championed the mostly middle- and lower-income homeowners who are now overpaying and would have seen a tax break under an actual-value system, said it was a mistake to think Council wasn't approving AVI this year.

The property-tax bill the members passed Thursday sets a tax rate for this year using the current system, but pledges Council to switch to actual value next year.

"Today we dive into where we know it's safely shallow, knowing it's still going to get dangerously deep real soon," Goode said.

Council is not bound by that pledge - members could amend that bill at any time. But Clarke reiterated that Council was committed to installing AVI once the reassessment was completed.

"This is not over," he said. "We will we continue to work through the recess. . . . When we go to AVI, we will do it in a fair and equitable manner."


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

comments powered by Disqus
|
|
|
|
|