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By Mike Dunn

PHILADELPHIA (CBS) – The chairman of the state agency that oversees Philadelphia’s finances has a warning about the city’s new property assessment system — he fears it could drive some young families to the suburbs.

Former mayoral candidate Sam Katz is now chairman of the PICA board, the state agency that signs off each year on the city’s long-range budget. Katz supports Mayor Nutter’s plan to move to a new assessment system dubbed AVI, for the Actual Value Initiative.

But at PICA’s monthly meeting Tuesday, Katz voiced concern that sticker shock could be in store for young families who bought in to gentrifying neighborhoods like Queen Village and Northern Liberties:

“The young families that bought four or five years ago, and made major investments to upgrade the quality of their homes, because the assessments were relatively low, say relative to Lower Merion, are also faced with the fact their children are now school age. Their taxes are going to go up. And compared now to (suburbs like) Lower Merion, they have to ask themselves a question,” Katz says. “And if en masse large numbers of them put ‘For Sale’ signs out, it’s going to drive the value of housing down.”

Katz is hoping that City Council and the mayor work out buffering provisions beyond the Homestead Exemption that will take effect with AVI. The mayor’s Finance Director Rob Dubow vows more protections will be in place:

“We know that we want to have relief measures. We have one in place. We know that’s not where we’re going to end up. We’ll have more than one.”

The new assessments that are the basis for AVI are to be mailed to homeowners in mid-February. But until Council and the Mayor actual agree on a new tax rate, the 2014 tax bill for homeowners won’t be known.

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