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Philadelphia Councilmembers Accept Need For Property Tax Overhaul, With Some Concerns

By Steve Tawa and Oren Liebermann

PHILADELPHIA (CBS) — The clock is now ticking for Philadelphia City Council to begin grappling with what could be the biggest challenge in the budget season, the proposed “actual-value” system for property taxes.

Following the mayor’s budget speech this morning (see related story), Councilman Curtis Jones says he and his colleagues will have to work together for what he calls some “grownup decisions.”

“What needs to be noted is that some people have paid too much for decades and some, unfortunately, have paid too little,” he tells KYW Newsradio.

Councilman Wilson Goode Jr. says City Council and the public need to be realistic:

“Actual value has to happen,” he said today. “Not only is it state law, but it makes things fair.”

Councilman Bill Green says he would have preferred to see the Nutter administration bring Council a revenue-neutral process rather than a hidden tax hike — “to collect the same dollars we did last year, and then call any other increase in revenue what it is.”

The Nutter administration is seeking an additional $90 million in property taxes, all of which would go to the school district. Green says there’s no reason the city can’t do AVI — the city’s Actual Value Initiative — by keeping revenue estimates the same for the city and school district.

“The problem with this is that it’s one last grab under the old system,” Green tells KYW Newsradio.

But the mayor insists there is a distinct difference between an increase in property taxes and a property tax increase. He says the Actual Value Initiative makes people pay the correct amount of taxes on their property.

“You may in fact pay more in taxes, but we are not raising them,” Mayor Nutter said after this budget address.

Dennis O’Brien, who is in his first term as a city councilman but was first elected to the Pennsylvania House in 1976, says, “Nothing is off the table and everything is on the table. These are brand-new proposals. Re-engineering the school district is going to be a continuing conversation.”

Veteran councilmember Jim Kenney feel like they are between a rock and a hard place in considering how they will go about changing the way properties are reassessed.

“Certainly no one wants to pay more in taxes,” he said today. “The irony is that we’ll be reducing the tax rate.”

The millage, or tax rate per thousand dollars of property valuation, will have to be set by the start of the new fiscal year this coming July, but the citywide reassessment will not be completed until the fall. That leaves Councilman Mark Squilla uneasy. And that’s why, he says, there will be safeguards put in place.

“We can put provisions into the tax lien to protect people,” he says. The mayor’s finance director had previously acknowledged that the new assessments would be phased in over three years to protect homeowners from huge hikes all at once.

In addition, the city will be seeking permission from the state legislature to create a $15,000 homestead exemption, which would drop a property’s assessed value for tax purposes. Low-income seniors could also apply to prevent their tax bills from rising.

And while the mayor’s budget address covered taxes, it also focused on the growing need for public safety. The mayor committed to hiring 400 new police officers over the next year and a half, aiming for a police force of 6,500 officers.

“I made a promise to the people of Philadelphia that ours would be a safer city and that’s a promise I intend to keep. And today we make a further investment in that process,” said the mayor in his address.

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  • Lee

    I’m shock to hear another new taxes proposal from Nutter again. The way city save money for school is to cut out Free vehicles service for most city workers. It’s crazy to provide with everything such as insurance, etc on the use of public vehicles. To have taxpayers to pay for them to use the vehicles FOR FREE. If they want to work, use their own cars as other citizens of city are doing everyday with their jobs… Or they hire them if can’t use their own. SHAME ON THEM. It hurts more low incomes resident living in the city for tax hike. Nutter, you are chasing resident out of the city…Those city official working there salaries are WAY TOO MUCH compared to others living in the city. They should not be elected more than two terms… Give others a chance and new ideas how to run the city smoothly without shortage of money. NJ governor is doing a great job there by firing who has salaries higher than him.

  • Francis Graff

    I sold my Fairmount home back in 2001, when I retired. It is worth less now because of the bad market for selling. So where is his thinking that homes in 2004 were worth less than today. It is the neighborhoods like Fairmount, Fishtown, Center City, and I even see growth up there in Kensington, to name just a few of the one’s who kept their homes up, and made this town what it is today. Now Nutter comes along and diversifies the system of taxing and hitting the very people who saved it from the tumbleweed. In addition, the two temporary taxes totalling some 20% and that other temporary tax called the City Wage Tax on top of all the other increases like gas, electric,Comcast, and riding the bus is going to break our backs. Why can’t they all see the pain and suffering we are going through? And Bill Green, he isn’t even a homeowner. I say tax every person who owns and who rents the same amount. Why do we have to make determinations like ownership to tax the dwelling we live inside of? Those big time condo owner’s will only use their increase to up everyone’s rents, ergo they make money not lose it on a new tax. You people are making me sick, and I intend to keep fightin you all in any way I can.

  • Cleanup Philly

    Why is Nutter and Council not ramping up the collection of overdue property taxes? The city is owed $465 million per this article in unpaid property taxes on properties that are valuable:

    It’s ridiculous that Nutter and Council are raising taxes first on those of us who do pay without making a good faith effort to collect this overdue money by sending these properties to sheriff sale promptly.

    • Francis Graff

      Philly that would require some work, and we know those people in City Hall only hit the keyboard while sitting on their derriere. Start firing some of those fat cats on the payroll, or send them out knocking on dead beat doors.

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