As City Council returns, tax talk dominates the agenda

Councilman Wilson Goode Jr.
Councilman Wilson Goode Jr.
Posted: September 14, 2012

ON ITS FIRST day back from summer break Thursday, City Council made it clear that reforming the property-tax system and raising revenue would dominate the discussion this fall.

With Mayor Nutter's planned move to a new property-tax system on the horizon, Councilman Wilson Goode Jr. introduced a bill that would reduce the city's tax abatement for developers from 10 years to five. The plan would start in 2014 with a full abatement in the first year and an annual gradual decrease of 20 percent.

"Under the current five-year financial plan, we will see many taxes go down," Goode said. "Business taxes will go down, wage taxes will go down, sales tax will go down, but property taxes will go up for some. So I think that as we see some of the burden shift to property taxpayers, we need to reconsider whether a 10-year, 100 percent abatement is necessary."

The tax abatement, which started in 1999, helped spur development in Center City and its surrounding neighborhoods by incentivizing developers to convert vacant office buildings into apartments and to renovate rowhouse shells.

"Clearly the revitalization of Center City, the 10-year tax abatement played a major role," said Allan Domb, president-elect and board member of the Greater Philadelphia Association of Realtors. "It was a positive move."

Domb said that under Goode's proposal, vacant office buildings may remain idle longer than now because developers would have less of an incentive to revitalize them.

Goode said it's about "looking at tax reform in a broad sense" and in a way that is fair. He requested that the bill receive a hearing in the spring.

Councilman Jim Kenney, a supporter of the current tax abatement, said that he would not vote to eliminate it and added that he's exploring whether to extend the abatement in certain areas to spur development in underperforming parts of the city.

During his first campaign for mayor, Nutter said he supported reducing the abatement to five years. Mayoral spokesman Mark McDonald said the administration would take a look at the proposal and provide testimony at a public hearing.

Council is also examining ways to boost revenue by collecting money already owed to the city. Council President Darrell Clarke sponsored legislation that would double the penalty to 2 percent for some of the city's biggest tax deadbeats - those who owe more than $20,000.

The city is owed $518 million in delinquent taxes, said Revenue Commissioner Keith Richardson, who added that he has some concerns about "doubling the rate for taxpayers who may not have the wherewithal to pay for what they're paying now."


Contact Jan Ransom at ransomj@phillynews.com or 215-854-5218. Follow her on Twitter @Jan_Ransom. Read her blog at PhillyClout.com.

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