Public testimony continued Thursday in City Council over Mayor Michael Nutter’s proposed actual value initiative, or AVI, a plan to radically overhaul property tax values in Philadelphia.
None of those who spoke during the hearing expressed total opposition to the plan; in fact they acknowledged that the current property tax assessment system is unbalanced and extremely flawed. The greatest concern was the fear that Council could vote on the issue before all of the property reassessments are completed — which won’t be until 2013.
“We’re not against AVI,” said James Foster, publisher of the Germantown Chronicle. “But we are concerned about how its passage will impact the economy of the city. I call this an awakening to the reality of neglect in the city. We have one of the best transit systems in the country and I would ask that Council members take a ride on a train, get a window seat going just outside the city and a window seat going back in. All of these trains go right through the hearts of your districts. You will see what’s left of the economic base that made Philadelphia great. Dilapidated buildings, abandoned houses, impromptu junkyards, and of course, empty blocks where buildings once stood. What do all of these properties have in common? They are paying no real estate taxes. They are paying no business taxes and are employing no residents of Philadelphia. Bad decisions drove people out before — and if this passes you will once again see another several hundred thousand leave in short order.”
Foster also said that Council and the Nutter administration should put more emphasis on collections of tax delinquent properties.
Last week, City Council approved to the new property tax system, but the final vote is pending. The proposal, which if passed along with the Use and Occupancy tax, would bring more than $85 million more for the financially limping school district. But public support for the new measures is shaky and residents are concerned that council is being pushed to pass the bills before all of the property assessments are in. The vocal residents who testified on Thursday, along with some members of Council are asking for a one-year delay in AVI, a proposal offered by City Councilman Mark Squilla.
“Our primary concern is the long term impact that raising the tax bills will have,” said Jeff Carpineta, president of the East Kensington Neighbors Association. “Some residents could find their tax bills going up from $800 dollars to $2,500 or $3,500 dollars. These residents could wind up making late payments on mortgages or in some cases even face foreclosures, decreasing the values of the communities and dumping more properties on the market. We’ll see more residents dislocated. If we don’t have a year to work this out, it could be a disaster.”
Residents stated their agreement that the current tax assessment system needs to be fixed. Mayor Nutter wants to fix Philadelphia’s broken property-tax system by reassessing all homes and businesses, and in the process, raise millions for the school district. Revamping the property-tax system will give city residents the most accurate assessments in years.
AVI would change the way the city assesses real estate, moving from assessments based on a fraction of property value to the full market value.
“No more fractions. No more complications. You should not need a math degree to be able to figure out what your taxes are,” said the mayor in a previous interview. “Once the new values are in, we have to use them.”
Councilmen Bill Green and Mark Squilla have announced their opposition to the proposal, calling on the administration to delay implementation for another year. And state Sen. Larry Farnese has also come on board, saying he was introducing legislation in Harrisburg that would give Council that option. Opponents say they’re being asked to vote on something before all of the information is available and assessment figures will not be available until July.
Over and over during Thursday’s hearing, residents and business people alike implored Council to delay the process for one year.
“Really, I’m very pessimistic about Philadelphia’s prospects for the future,” said real estate developer Richard Snowden. “The notion that this Council is even considering a property tax increase, coming on the heels of other recent large tax increases and a jump in virtually every fee the city imposes on businesses indicates a blatant disregard for the people of this city. Due to the unreasonable scale and lack of phasing of this policy I have alerted our employees, tenants and members for 2013 includes enormous rent increases which many simply cannot afford to pay. We’ll see layoffs and curtailments in restoration and rehabilitation of buildings — all so the city can get its thirty pieces of silver. Many small Mom and Pop businesses will simply close their doors.”