New, school-friendly tax-abatement plan in works

Posted: September 21, 2013

A week after saying he would continue calling for a vote on his bill to cap Philadelphia's 10-year tax abatement on residential construction, City Councilman W. Wilson Goode Jr. on Thursday withdrew that bill in favor of a second proposal to modify the tax incentive program.

The second bill, introduced last week, would eliminate the abatement on the 55 percent of property taxes that go to the School District of Philadelphia.

For example, the owner of a new home with $1,000 abated from his bill would no longer get that free ride for 10 years. Instead, he would have only $450 abated from his bill, and pay $550, which would go to the district. (The abatement exempts the value of a home from taxes, but homeowners still pay a tax on the value of their land.)

If adopted, the new bill would go into effect on July 1, 2014.

Goode has been working since last year to modify the 10-year abatement, but he linked the effort to school funding when he introduced the second bill.

Last week, education activists packed Council chambers and chanted, "Save our schools" as Goode spoke of the bills.

Developers and home builders have credited the tax abatement with sparking the building boom of the previous decade, saying the incentive offsets the higher cost of labor and construction in the city.

Goode said there has been no analysis showing the current abatement is needed to make individual projects feasible.

"Every project does not need the current tax abatement, but every school absolutely needs more money," he said. "So why take money from needy schools for the tax abatement? In the end, who has the greater need? The kids do."

The original bill would have capped the amount of value that could be abated at $500,000 and phased out the abatement during the final five years. It would go into effect in 2016.

The original bill passed out of Council's Whole Committee in June by a 9-7 vote, with one member absent. Assuming the same nine members still supported the original legislation, Goode could have gotten the bill through final passage.

Mayor Nutter, however, opposed the legislation, and Goode would have needed 12 votes to override a veto.

Goode said he moved to withdraw that bill Thursday because he's "simply in favor of the second bill at this point."

"Rather than cause confusion over both bills," he said, "I want to squarely focus on getting the schools money as quickly as possible."


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

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