Across the city, residents in uproar against AVI

Residents of the Graduate Hospital neighborhood packed a meeting on AVI at New Temple Baptist Church. "The numbers are just wrong," City Controller Alan Butkovitz told them.
Residents of the Graduate Hospital neighborhood packed a meeting on AVI at New Temple Baptist Church. "The numbers are just wrong," City Controller Alan Butkovitz told them. (ELIZABETH ROBERTSON / Staff Photographer)
Posted: March 25, 2013

Councilman Mark Squilla stood before a diverse crowd of his South Philadelphia constituents on a blustery weeknight and asked how many had received new assessments on their homes and businesses.

Nearly every hand shot up.

"Who believes the assessments are not accurate?" Squilla asked, watching nearly every hand rise again.

When he asked who thought the city had valued their homes too low, he was answered not with hands, but with laughter.

It's a scene playing out across the city: government officials confronting residents bewildered by the Actual Value Initiative (AVI). Mayor Nutter's property-tax reform effort promises to correct a badly flawed and unfair system, but it will shift the tax burden in painful ways.

For more than an hour Monday night, Squilla fielded questions from people like retired Water Department worker Herman Williams. Williams had a common complaint - his tax bill could more than quadruple on a $228,300 assessment for the house he has owned for 35 years at Fifth and Mifflin Streets.

"I can't sell my house for that," he said. "That ought to be against the law for any city to do that."

Most property owners received their new assessments more than a month ago, and politicians have found the mood grim at community meetings across the city.

Council Majority Leader Curtis Jones Jr. described taking "an AVI butt-whipping" at a meeting, and Councilman Kenyatta Johnson called to slow the AVI process.

"A lot of my constituents tell me they feel rushed," he said. "We could very well have an exodus of people leaving the city depending on how we implement AVI."

With Council's budget hearings starting this week - the Office of Property Assessment (OPA) is scheduled for a daylong session Tuesday - the debate over AVI will only intensify.

The question is whether opponents can seize on public fears, complaints of assessment errors, and, in some neighborhoods, eye-popping tax hikes, to thwart AVI for a second year in a row. AVI proponents fret that further delay could sacrifice reform to the politics of the 2015 mayoral and Council elections.

Powerful labor leader John J. Dougherty, business manager of electricians' union Local 98, said he had established an "AVI war room" at the Edward O'Malley Club near his own Pennsport home in response to questionable assessments.

"We've already seen 1,000 people, so the need is evident," Dougherty said in an e-mail Friday. "I'm committed to it because I love my neighborhood and somebody has to stand up for the city's vanishing middle class."

Council could stop AVI only with state permission to continue using the old assessments. Seeking that permission is a viable option, Johnson said.

City Controller Alan Butkovitz proudly described himself at a Graduate Hospital community meeting last week as AVI's "principal critic," and predicted a class-action lawsuit to halt AVI.

"In our analysis, the numbers are just wrong," he told the crowd at New Temple Baptist Church. "The city really should not be implementing a system this disruptive based on wrong numbers."

The city's chief assessor, Richie McKeithen, stands by his numbers, saying they meet industry standards. Performing an analysis of the assessments without the proper methodology, "you could formulate any opinion you wanted to, based on whatever results you were trying to get," he said.

A barometer of public acceptance or rejection of AVI could be the number of people who file a first-level review with OPA - asking assessors to take another look at their properties - and how many assessments the city agrees to change.

The deadline to file a first-level review is next Sunday, or 30 days after receiving the assessment notice. (The review is not the same as a formal appeal, which can be done with the Board of Revision of Taxes through Oct. 7.)

McKeithen, who has been attending community meetings since fall, said Friday 16,500 reviews had been filed, and his office hoped to resolve them all by mid-August.

At a packed Fishtown recreation center on Thursday night, he encouraged people who thought their values were wrong to file a review, saying he anticipated errors in the first year after a mass reassessment of 579,000 parcels.

The reviews, he said, will help OPA refine the values, which he predicted would become more accurate in future years.

After the meeting, Warren Schneider cornered McKeithen to talk about his home of 47 years on East Berks Street. Schneider objected not to his assessment but to the likely doubling of his taxes.

"I go by cash. I don't go by these assessments," he said. "I don't think that's fair. You can't have taxes double."

The city has a number of programs for low-income residents, and Nutter has pledged to work with any homeowners who fear they can't afford their new tax bills.

McKeithen said much of the "fury and intensity" he encounters has more to do with taxes than assessments. The most jarring effect of AVI is the increase in tax bills for people who have been underassessed and underpaying for years in relation to other property owners.

McKeithen said he believed he could explain to critics, whether politicians or residents filing for review, how the assessments were calculated.

"It's just a hard-core education process," he said. "I don't know if it will ever be accepted, but it can be understandable."

AVI proponents also noted that people who think their homes are assessed below market value aren't likely to complain, and that as many as 40 percent of homeowners could see their taxes reduced under AVI.

Homeowners in Councilman Bobby Henon's Northeast district are no less skeptical of AVI, but once they learn they're likely to benefit from lower bills, "People say, 'Thank God,' and, 'It's about time,' " said Henon, a former Local 98 political director who still works for Dougherty.

"If my district is going to experience a decrease overall, I'm going to fight for that," he said. "If they've been overcharged all these years, it should go down."

Explaining AVI can be difficult, because the tax rate and the level of tax breaks for homeowners have yet to be determined, so no one can say for sure what individual property owners might pay.

Nutter, for example, has proposed $20 million in tax breaks for longtime residents of neighborhoods like Fishtown and Graduate Hospital, where housing prices have jumped with new developers and new residents.

How those tax breaks would work has not been explained, but the information could temper outrage in areas where gentrification can be a dirty word.

At New Temple Baptist, terms like ethnic cleansing and carpetbaggers were tossed around Wednesday night by a predominantly African American crowd that has seen market forces transform the area.

André David Smothers Sr. said that his family has owned his house in the 2000 block of Montrose Street for 100 years, and that his taxes could go up more than fivefold.

"I'm angry because the kids I educated can't afford to buy in the neighborhood they were born in, and the parents are being forced out," he said. "I'm fighting to stay where I am."


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

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