Council has been called out in the past for having the longest summer recess of any city lawmaking body, although many members claim their work never ends. This summer should be especially packed. Though Council passed the city budget last week on time, getting there wasn't easy, because of a $94 million ask for the school district, and a complicated new property-tax system to review. Although the budget got done, there's plenty left to do.
Top of the list: AVI. Mayor Nutter pushed for Council to approve a new Actual Value Initiative that would fundamentally alter the property-tax assessment and collection system. But the actual values of properties were not ready in time, and Council balked at passing the bill without knowing what the tax rate was going to be.
Council's resistance is sometimes chalked up to their wanting the easy way out, but in fact AVI became more complicated the deeper Council dived into it — uncovering many technical problems with aspects of the bill, particularly how the millage rate will be set and what programs can help mitigate the pain of those getting a big tax hike.
Easing the pain of new tax bills won't be easy. Mitigating the new tax system too dramatically could be just another version of altering it beyond recognition — which is how we got to the current broken system. And many different groups could be looking at hikes: older, long-term property owners who find themselves in gentrified neighborhoods with much higher home values, and younger people attracted both to city living and Philadelphia's lower taxes who could have a rude awakening. Council needs to explore new ways to ease the burden without compromising AVI .
We hope Council also takes time to look at the bigger picture of tax policy. For the past three years, Council and the mayor have increased property taxes, and this year also hiked the use and occupancy tax. Those were expedient moves to get the school district some of the money it requested ($40 million of $94 million requested), but these kinds of changes should be part of a coherent strategy, not a last-minute stopgap. Two different commissions in two different decades have spent considerable time reviewing the city's tax policies — or lack thereof — and have actually provided recommendations for fixing it. In fact, one of those recommendations is shifting the tax burden from wage and business taxes to property taxes. At the very least, Council should make up its mind whether it accepts or rejects this idea so that future tax hikes at least have the semblance of logic.
We also urge Clarke to schedule some meetings or hearings during the summer to keep the public informed of any progress. In exchange, we grant Council permission to take tomorrow off.