Council gave preliminary approval Wednesday to two bills related to Mayor Nutter’s property tax reform effort, the Actual Value Initiative, the first pieces of AVI legislation to begin moving through the committee process.
Council must pass a budget that establishes the parameters of AVI – the tax rate, the tax relief measures and other aspects – by June 30.
One of the bills passed out of committee Wednesday would allow seniors who would see lower bills under AVI and already are participating in the city’s tax freeze program to have their bills frozen at the lower amount. The Nutter administration supports that bill, sponsored by Councilman Brian J. O’Neill.
The second, sponsored by Councilman Mark Squilla, would allow people who appeal their property assessments to pay the same amount in taxes as the previous year until the appeals are settled. Also, if property owners lose their appeals, they would not be charged penalties or interest.
Those conditions would only exist for one year – the first year of rolling out AVI, when a glut of appeals is expected.
Finance Director Rob Dubow said the administration opposed the bill because out of concern “that the legislation would encourage frivolous appeals.” He said the bill would remove consequences for filling appeals without merit.
If people pay their tax bills and then win a lower assessment on appeal, they now get a refund or credit.
Squilla said he was particularly concerned about people with mortgages facing huge tax increases based on flawed assessments. With the high number of appeals expected this year, the Board of Revision of Taxes is unlikely to settle every case before the bills go out at the end of the year.
At that point, Squilla said, mortgage companies will pay the taxes, charge the homeowner the excess and then begin taking out more money every month for the following year’s tax bill.
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