Property-tax overhaul not certain this year

Posted: September 14, 2012

City Council returns today for a fall session that is bound to be overshadowed by the unfinished business of massive property-tax reform - even if no official action is taken on the issue this year.

The Nutter administration, which failed to persuade Council to enact the mayor's Actual Value Initiative (AVI) in the spring, says the results of a citywide reassessment that is central to the reform effort won't be available until December.

Some Council members interpreted that to mean after they leave for the Christmas recess, in which case 2012 would pass without anyone knowing exactly how AVI would affect individual neighborhoods and property owners.

"Nobody wants to hear Council members say, 'We don't know,' " said Councilman Mark Squilla, who led the effort to delay AVI in the spring. " 'Well, how is this going to affect me?' We don't know."

But even if AVI isn't the centerpiece of the fall session, the reform effort promises to be the subtext of plenty of discussions and maneuvering.

One highlight: Councilman Wilson Goode Jr. plans to introduce legislation today to reduce the 10-year tax abatement on residential construction to a five-year program that would have a full abatement only in the first year.

Though he's introducing the bill now, he intends it to take off in the spring as part of the larger debate over AVI and "tax fairness."

Goode said the discussion should be not only about creating an equitable property-tax system, but using that reform to "pay for business- and wage-tax reform."

There also could be movement in the fall on two of Council President Darrell L. Clarke's proposals to raise revenue - one to sell city assets and another to allow advertising on city property.

Any added revenue for the next budget could affect the amount the city needs to raise through property taxes.

The city is seeking proposals to sell the municipal-owned garage below LOVE Park, real estate previously valued at up to $40 million.

Clarke also said the city had received two bids from vendors that would solicit and manage advertising on city property. He is particularly interested in the idea of putting ads on trash trucks.

"Sanitation vehicles travel every block in the city," Clarke said. "I got to think that's a very lucrative opportunity for an advertiser."

Clarke also hinted at plans to roll out in about a month a "comprehensive approach to increasing revenue and putting another opportunity on the table to rebuild neighborhoods and reduce taxes."

He declined to provide more details on how he would accomplish those daunting tasks until legislation is drafted.

In June, when Council agreed to delay AVI for a year, the members said they hoped to work through the recess and the fall on making the transition.

Under actual value, properties would be taxed based on what the city determines is their actual market value - and that is why learning the results of the reassessment is so crucial.

Council members this week universally derided - but seemed resigned to - not getting those numbers until December.

"In the long run, AVI is the best way to go. But it's the best way to go when you have all the facts behind it," Majority Deputy Whip Bill Greenlee said. "Not when it's maybe, could have, should have."

The administration said the reassessment results couldn't be released any sooner because the Office of Property Assessment had to set aside those numbers to generate 2013 tax bills using the old numbers.

Though the reassessment is complete, Finance Director Rob Dubow said, there is still plenty of "quality control" work needed on the numbers.

"Until they have all that done, there can be significant changes in values for individual properties," he said. "That's one of the things we want to avoid - giving out information . . . that may change."

The administration has promised that property owners would get their new assessments - which would be used to calculate their 2014 fiscal year taxes - in February.

Dubow said the administration might be able to provide Council with the total or aggregate value of taxable property sooner than December. That number would give Council an idea of what the 2014 tax rate might be.

Until then, Goode said, "essentially, we'll still be having hypothetical conversations."


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

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