Property taxes are hot topic at budget hearing

It’s all AVI today in City Council as  budget hearings kick off in earnest with the Nutter administration in the hot seat to explain their property tax plans.

Mayor Nutter wants to shift the city to a property tax system based on market values, a move known as the Actual Value Initiative. The property tax revenue expectations Nutter has set for the fiscal year that starts July 1 mean that he is memorializing two tax hikes billed as temporary, as well as collecting an additional $90 million next year for the schools.

Critics have labeled the plan a “back-door” tax hike, while the administration says they are simply capturing an increase in property values. Council has been pushing the administration today on how the plan would work.

“There’s got to be a cap, there’s got to be a limit to what we’re going to whack people with, because they’re going to move,” said Councilman Jim Kenney.

Nutter’s Chief of Staff Everett Gillison said the administration wants to make sure people are eased into the new system. They’ve proposed a three-year phase-in of AVI, along with some other protections.

“We recognize that we don’t want that sticker shock to send you away,” Gillison said.

Councilman Mark Squilla, who wants the city to delay AVI, asked about the revenue targets beyond the coming 2012-2013 fiscal year. City Finance Director Rob Dubow said the administration was counting on an additional 3 percent in revenue in the 2013-2014 fiscal year, though he said the hope was that would be the result of values going up, not setting a new tax rate. Dubow later said the adminstration would be willing to take the 2013-2014 projections out of the legislation.

Squilla, whose district covers much South Philadelphia, said he remained concerned.

“It seems like right now we don’t have any information to tell anyone anything,” Squilla said. “It just seems really irresponsible. We don’t even know what our safeguards are.”