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Philadelphia tax revamp is still a mess

Philadelphia's new and supposedly improved property values, heralded as the solution to a broken tax system, are so filled with errors that it may take up to two years to get them right, according to the city budget director.

Despite a $7 million computer system, payments to experts, and years of staff time, the proposed new assessments are nowhere near ready to go out on tax bills, said Stephen Agostini, who has been leading a review of the new numbers.

Speaking at yesterday's City Council hearing on revamping Philadelphia's troubled Board of Revision of Taxes, Agostini could not say how much had been spent so far to fix the property-tax system.

"I wish I did. I don't know the answer," he said.

His grim report came at a hearing on how to fix the BRT. Members of City Council, the Nutter administration, and the public spent hours debating the details, but generally agreed on one thing: It's time to kill the agency.

The growing consensus on change comes five months after The Inquirer launched a series detailing the BRT's mismanagement, cronyism, and deeply flawed tax assessments.

A measure before Council would wipe out the BRT and place property assessments under the Finance Department. A newly created board would hear appeals. The plan would have to be approved by voters.

The BRT has not put up an argument - and none of the six board members showed up yesterday.

"It's pathetic," said Councilman Bill Green, author of the bill to revamp the tax system. "I'm not sure why we continue to pay them."

The agency's chairwoman, Charlesretta Meade, and other BRT officials did not respond to requests for comment.

In a letter to Council, Meade said that the board had "recognized the need" for reform and that the new values for commercial properties would be ready "in the very near future." She said the mayor and Council should not be involved in choosing the members of the appeals board.

Even if the BRT goes away, city officials say, it will leave a big mess behind.

With a project called the Actual Value Initiative, the BRT is attempting to fix its notoriously confusing and inequitable property values. Under AVI, each property is supposed to be assessed at its real worth in the marketplace.

Board members promised the new numbers would be completed by spring. Recently, they said they would be finished no later than November.

But the administration is now supervising the process, under a temporary deal struck with the BRT this month. And Agostini says the AVI numbers are nowhere near ready.

The agency's mathematical models need to be fixed, he said. But it probably will take at least a year and a half, maybe longer, he said, to correct all the errors in property descriptions - mistakes that dramatically skewed some of the AVI values, particularly for big commercial properties.

"Could we do it sooner than that? It's possible," Agostini said. "It would be difficult."

That would mean further delays in correcting the unfairness of the current system, which penalizes residents of poor neighborhoods. It also would delay the agony of a reassessment for politicians.

The BRT, created in the 19th century, is run by seven members appointed by city judges; they supervise the assessors and handle appeals. Historically, the seats have been handed out to the politically wired.

City Finance Director Rob Dubow said the administration supported the bill, but asked for some changes. The appeals board members should be paid by the day, not given a salary, he said. Board members now make about $70,000 a year for part-time work.

Dubow said the mayor should make appointments, with Council confirming them. He said that would be less "cumbersome" than the Council proposal, which has the mayor choosing from names submitted by a nominating panel.

"We're not going to do that," said Green, though he said he was open to the other suggestions.

The only person defending the BRT was one of the agency's assessors, William Kilroy, who said putting the agency under City Hall would inevitably mean higher taxes.

"I suggest we think long and hard before opening Pandora's box," he said.

Much of the four-hour hearing was spent discussing the fate of about 80 BRT workers who are paid by the school board - jobs set aside for party workers and controlled by the city's Democratic and Republican organizations. Keeping them on the school payroll allows them to continue working on campaigns, as city workers are barred from participating in politics.

The state board that runs city schools wants to end that system, even as it continues to pay about $4 million a year to support it.

Nutter also thinks all BRT workers should be on the city payroll, and he has asked the BRT workers paid by the School District to describe what they do.

Council members are balking. Some are ward leaders themselves, and they say it would be wrong to scapegoat patronage workers for the agency's troubles. For that matter, some think all city workers should have the right to participate in politics.

"It's not all guys with cigars in back rooms making deals," said Councilman James F. Kenney, asserting that many party activists were "problem solvers" for residents.

Even if the BRT workers are shifted onto the city payroll, Dubow said, the district would continue to pay the $4 million to the city as a way to share costs.

School activists vowed to end that, saying it would be unconscionable for the district to keep paying the BRT workers at a time when school programs were being cut to close a $180 million budget gap.

"Their presence on the School District payroll is an anachronistic reminder of the city that you, the mayor, and voters have expressed a desire to leave behind," said Sheila Simmons of Public Citizens for Children and Youth.

 


Contact staff writer Joseph Tanfani at 215-854-2684 or jtanfani@phillynews.com.

Staff writer Mark Fazlollah contributed to this article.

 

Comments   
Posted 06:42 AM, 10/28/2009
Steelmanpa
Yes great, but with the new "program" houses were grossly over valued even during peak market value. Row homes built in 1929 in my neighborhood at $350,000 when they are selling for $285,000. That means being over axed by $650 annually based on real world numbers. Property assessments dont see interiors and that drives sales figures. Its a scam no matter what, someone is making a judgement based on driving up & looking at your sidewalk, sides, windows etc and taking the most expensive sale price for the houses in the are from BEFORE THE RECESSION/DEPRESSION. No need to mince words, our household income is down 35% and the city govs income and ability to meet expenses is down too-but continue to implement taxes that have nothing to do with real market vlaues in a depression, tax based on obsolete values. Want to buy some Madoff investments- no, then why use obsolete information for valuation of homes? CURRENT REAL WORLD VALUES!!!
Posted 08:22 AM, 10/28/2009
rkeskula
The BRT clowns should be fired immediately and forfeit their pensions for the fraud they have perpetrated on the city for years! Russell Nigro especially should be pillaried! The patronage idiots on the school district payroll should be accorded the same treatment. They are a disgrace to the species!!!!
Posted 08:45 AM, 10/28/2009
Joshua911
Well, the residential numbers would not be so bad if it was 2006; but the bubble has burst, and the commercial numbers were no where close to real. Good values are done everywhere in this country, they can be done here too.
Posted 09:05 AM, 10/28/2009
CleanupPhilly
Council wants to tie Nutter's hands as much as possible, but they have to let the elected executive work. Voters are electing better managers than ever before as more and more Philly residents are moving in with college degrees and normal expectations of functioning government. Council is the anti-change agent that keeps Philly backwards and rooted in a corrupt patronage system that fails Democrats and guarantees that the FBI will continue to be the fifth branch of local Philly Democrat government.
Posted 09:07 AM, 10/28/2009
CleanupPhilly
Steel, that's why AVI works. You have an annual property tax assessment based on objective market data -- sales prices. Your assessment fluctuates accordingly.
Posted 09:11 AM, 10/28/2009
CleanupPhilly
Kenney as much as admits above that party patronage workers are fixers who fix assessments for the connected as favors for working for the pols. This is illegal. Council just doesn't get it. The FBI has to step in here. Look at the Fumo assessment on his Spring Garden mansion. Fumo was just one of hundreds of party members low to high up who get a break on their assessment by going to the patronage board to appeal and stating "I work for the party so let me pay $700 less than my neighbors." I witnessed this first hand when I appealed my own property. The neighbors who volunteer for the local Dems expect a big discount on their property taxes, and that the BRT and Council defends this practice is theft of municipal services that are meant to apply equally to every taxpayer without special concessions to one party or another.
Posted 09:15 AM, 10/28/2009
CleanupPhilly
Assessors should be "problem solvers" for all residents, not just for party members. If you did an analysis of members of the Democratic party, and those with lower than market value assessment, you'd see a statistically significant skew towards low assessments for party workers and political cronies. Fumo was just one example of a system of low assessments and non collection for free political work. Kids, this is illegal. It is a violation of federal law.
Posted 09:35 AM, 10/28/2009
anti-tax
The only reason to eliminate the BRT is to allow the mayor to increase real estate taxes. The Mayor would then control the assessment process. Does anybody expect taxes to go down? Sunday's Inquirer noted taxes on a house valued $140,000 taxed at $8,100 in Cherry Hill. The City is nowhere near these numbers. City Council should NOT APPROVE this bill since it will mean higher taxes. Once those taxes appear there will be no BRT for Council and the Mayor to blame. They will then be responsible.
Posted 09:53 AM, 10/28/2009
birdswinbaby
sorry anti-tax.....this is not about taxes going down. taxes are going up and all of this is to make you more comfortable with the figure you end up with. if people think the process is fair(er?) then when taxes go up throughout the city there is less chance residents will petition the state to takeover the process. BRT or no BRT your taxes are going up...is there anyone who doesnt know this?
Posted 10:01 AM, 10/28/2009
birdswinbaby
why on earth is the BRT in charge of implementing AVI?....if the problem is corruption in the BRT and a broken assessment process that benefits the crooks at the BRT, does it seem likely that they will try hard to implement a new system that makes them and their stolen salaries disappear? or is it more likely that the BRT crooks will continue to delay the AVI system with excuses for why its taking so long....all the while they are still collecting checks? to me this enitre story seems like a smokescreen. they will meet a lot, talk a lot, and even propose bill after bill....nothing will change because too many political friends will get their toes stepped on if the BRT go bye-bye
Posted 10:06 AM, 10/28/2009
Sounds
How come there is no mention of property tax relief from legalized gambling? Wasn't that one of the selling points for its legalization? Well Sugarhouse is going up and so are property taxes apparently.
Posted 11:32 AM, 10/28/2009
vickki2629
I'm amazed that how dumb ppl are, I guess thats why the same party wins evey election all the time..After reading all of these comments I'm even more amazed, if these workers bring in 600 million and it only cost 4 million,I guess you genius don't see the profit, personaly I don't care if they clean Nutter's feet , but lets face it there is NO OTHER AGENCY IN PHILADELPHIA THAT BRINGS IN MONEY.. Helen Gym like Green told you, if there removed from the school board budget, the schools ARE NOT going to get that money...You better keep, you efforts now on the casions another battle you fought, and maybe the rest of these idoits will have a forum, to moan about, and not know nothing about... Keep voting Democrat, you dopes
Posted 12:23 PM, 10/28/2009
birdswinbaby
vickki either doesnt get it or gets it fine and is a BRT worker....tax assessment is broken and must be fixed, the board at the BRT is corrupt and must be abolished and replaced. if they bring in 600 million while letting their political buddies owe another 500 million is it worth it to the city to keep the present system in place?....well of course it is if you are one of the workers and/or a politician who benefits from having his house taxed at a rate from 1932...wake up
Posted 12:39 PM, 10/28/2009
joseph shay stivala
The taxpayer has to invite an assessor to view the interior of a home,steelmanpa. Why does Cleanupphilly hog up all the comments space? Does he or she have a job? I read where he seems to put words in Councilman Kenny's mouth. In the USA you have the right of free speech, but should have the fortitude to identify yourself, since the BRT has impact on our lives. Still, I urge CLEANUP to run for office, like Kenney. I will write a check for his/her campaign, ONCE we know what civic accomplishments he/she has accomplished in cleaning up the city (complaining not included).
Posted 12:52 PM, 10/28/2009
feudi
This is ridiculous. This is just plain NUTS! Turn the whole process of actual property valuation over to a company like Zillow or Homebuyers.com. The database already exists and it's based on most recent market sales. Sure their will be some tweaking, but nothing that could ever take another 1 and 1/2 years. Plus, I GUARANTEE that a Zillow or Homebuyers valuation system would be far, far cheaper and far more equitable than the mess that exists now. One BIG problem though...nobody would get greased and that's why it'll never ever happen. This is, after all, Philadelphia...Home of Pay to Play.
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