Tuesday, September 2, 2014
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Council Members Want Administration to Analyze Bill

Five City Council members have asked the Nutter administration to provide a “fiscal impact statement” examining the possible consequences of Councilman W. Wilson Goode Jr.’s bill to alter the 10-year tax abatement on new construction.

Council Members Want Administration to Analyze Bill

Five City Council members have asked the Nutter administration to provide a “fiscal impact statement” examining the possible consequences of Councilman W. Wilson Goode Jr.’s bill to alter the 10-year tax abatement on new construction.

This is the first such statement Council members have requested since passing a law in the spring allowing them to seek an administration analysis of the costs and benefits on most bills.

Goode has been working for more than a year to change the 10-year tax abatement, which lets the owners of new homes to pay almost nothing in property taxes for a decade.

His latest proposal would end the abatement on the portion of property taxes that goes to the School District of Philadelphia, a move that ties his quest to the district’s ongoing financial crisis.

About 55 percent of property taxes go to the schools, meaning a 10-year tax abatement under Goode’s bill would apply only to 45 percent of a new home’s worth. The homeowner would pay taxes on the remaining 55 percent.

The tax abatement has been credited with sparking the building boom in Center City and surrounding neighborhoods in the previous decade, and developers have warned about the consequences of changing the incentive.

The request for a fiscal impact statement came from Democratic Council members Bill Green, Kenyatta Johnson, Curtis Jones Jr. and Mark Squilla, and Republican member David Oh. Green also was the prime sponsor of the bill that gave Council the ability to request impact statements from the administration.

“In my opinion, having a full understanding of the intended and unintended consequences of any legislation is very important,” Oh said. “Especially when we are talking about the economic health of Philadelphia.”

Johnson and Squilla represent neighborhoods that have been beneficiaries of the building boom, including parts of Center City, Graduate Hospital and Northern Liberties.

Goode has said repeatedly that no studies have shown individual housing projects would have been impossible to build without the abatement.

The Nutter administration has been opposed to changing the abatement program.

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