Council appears set to delay AVI for a year

Philadelphia City Council was in session Thursday, June 14th, and continued to tackle budget woes while listening to the concerns of citizens worried about increases in their taxes. Here, Council President Darrell Clarke, left talks with fellow councilman before the start of this mornings session. Left to right Darrell Clarke, William Greenlee, Curtis Jones (partially hidden, and James Kenney. ( Ed Hille / Staff Photographer )

City Council appears set to approve a plan to delay the mayor's proposed property tax overhaul by a year and provide $40 million in funding to the school district.

"I think what we've reached is a great compromise which protects taxpayers from unanticipated increases," said Councilman Bill Green.

Mayor Nutter had proposed to move the city to a property tax system based on market values, known as the Actual Value Initiative (AVI), and wanted to raise $94 million for schools in the process. But over the past week, Council members grew increasingly nervous about the plan, raising questions about the fact that assessments are not yet complete and state enabling legislation has not yet passed.

Nutter, who had been in Orlando, FL for the annual meeting of the U.S. Conference of Mayors, jetted back Wednesday night to try to revived the deal. He spent most of Thursday huddled in his office with members

Defying Nutter's requests, Council members said they will approve a plan to keep the current property tax system for the 2012-2013 fiscal year, with a pledge to go to AVI the following year. The schools funding -- far less than Nutter sought -- would be $40 million through a property tax hike and an increase to a business tax known as the use and occupancy tax.

Councilwoman Blondell Reynolds Brown said she was glad some money would go to schools.

“I’ve been consistent and persistent that whatever the end agreement is, we continue to help the school district,” said Brown. “Can we deliver what the mayor asked for? It takes 9.”

The Nutter administration has warned Council that keeping the current tax system could result in costly property tax appeals, based on a ruling from a state tax board. But members said they were hopeful that state lawmakers could provide some relief from that threat.