Last month, Councilman Bill Green argued that businesses overall would get a property tax cut under Mayor Nutter’s Actual Value Initiative (AVI).
But now Green says that’s no longer the case. He believes that businesses’ property tax bills, in the aggregate, would stay the same. His projection changed because the circumstances have changed, which shows just how fast-moving this debate is.
Earlier this year, Green said that AVl would move the tax burden from businesses to homeowners. Currently, the average commercial and industrial properties are assessed more accurately than houses, he said.
Since the property-tax rate would be lowered under AVI, he argued that businesses overall would enjoy a property tax decrease. Finance director Rob Dubow acknowledged that such a shift in the tax burden could happen under AVI.
But now Green says his projections have changed. What happened?
A Council consultant estimated that the total value of properties is about $80 billion, and last week Dubow agreed that was a “reasonable” number for analysis. That would put the tax rate somewhere between 1.6 and 1.8 percent, Dubow said.
The Nutter administration previously used a 1.25 percent rate in an analysis given to Council, although it never stated that would be the final rate.
Green says the difference between a 1.25 and 1.8 percent rate, though, was enough to totally change his calculations. Now he says that overall, businesses’ tax bills would stay the same.
“It eliminates the windfall,” he says.
That’s just on average. Councilwoman Maria Quiñones-Sánchez argues that small businesses in neighborhoods have been under-assessed, and their taxes would go up.
“They’re going to get a sticker shock on real estate,” she says.
Relatedly, businesses have been sounding the alarm about a proposal to raise the use-and-occupancy tax, which Council gave preliminary approval to last week.
In a Daily News article today, Councilman Jim Kenney said that proposal is "pretty much dead." But this debate is ever-changing, and we're hearing rumblings now that a use-and-occupancy tax increase might be back from the dead tomorrow. Stay tuned.