Sunday, April 20, 2014
Inquirer Daily News

IOM editorial: State Takeover Theory

AS IF THE CITY’S attempt to update its property-tax system wasn’t enough of a mess — the Actual Value Initiative to have property-tax bills bear some relation to the actual value of property has been marred by confusion and delayed by uncertainty — we now have the specter of Harrisburg trying to "help."

IOM editorial: State Takeover Theory

Farnese
Farnese

AS IF THE CITY’S attempt to update its property-tax system wasn’t enough of a mess — the Actual Value Initiative to have property-tax bills bear some relation to the actual value of property has been marred by confusion and delayed by uncertainty — we now have the specter of Harrisburg trying to "help."

We say "help" because recent proposals by state Sen. Larry Farnese and state Rep. Brendan Boyle, while well-intentioned, are the kind of help you might get from a squeegee man: You didn’t ask for it, and it usually leaves the windshield muddier than ever.

Farnese and Boyle are upset about Mayor Nutter’s proposal to collect $94 million more in property taxes through AVI for the cash-strapped school district. The administration refuses to call this a "tax increase" because, it says, the city will just capture an increase in property value that it hasn’t collected for years.

Many Philadelphians aren’t impressed by this logic. An increase in their taxes, to them, is a tax increase. Farnese and Boyle agree, and have independently proposed requiring that the city make AVI revenue-neutral, meaning it would collect the same amount in property taxes after the reassessment, even if the burden is distributed differently. Should the city still want to give money to the district, it would have to do so separately, by either hiking taxes (and acknowledging it) or cutting services.

Farnese’s proposal is an amendment to a Senate bill giving the city permission to adjust the property-tax rate, without which AVI probably can’t happen. Boyle’s proposals would also be attached to AVI-related bills.

We get the argument that AVI shouldn’t be used to increase the property-tax take. If the schools need more money — and they do — the mayor and school leaders should come before the public and make a forthright case that someone has to pay for education in Philadelphia.

But when it comes to these proposals, the ends don’t justify the means. The state granting the city permission to change its property-tax rate should be a technicality, not an occasion for state legislators to insert themselves into a city debate. Especially when you consider that the reason the city needs the state’s permission to change the tax is due to a technicality in a law intended to prevent Philadelphia from reducing contributions to the district.

The state AVI proposals are just the latest example of what you might call State Takeover Theory, which holds that Pennsylvania can govern Philadelphia better than Philadelphia can. But there’s precious little evidence of this. The most prominent Pennsylvania takeover of a Philadelphia entity was the school district, in 2001, to shore up its finances. Yes, that’s the same school district that is broke and begging the city for $94 million. (And don’t get us started on the Parking Authority, taken over in 2001).

The district is in this predicament partly because of education cuts from Harrisburg. Philly Democrats like Farnese and Boyle didn’t make those cuts. But as state legislators, the best thing they can do for Philadelphia is persuade the state to do better by the city. If they focused their energy on state government, they might not have to worry about a city tax hike. Instead of "helping" Philadelphia, Harrisburg would do better to help itself.

This editorial originally appeared in the Daily News.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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