Thursday, April 24, 2014
Inquirer Daily News

Property-tax debate gets even muddier

Philadelphia City Council members have long complained that Mayor Nutter hasn’t given them enough information about the ramifications of his proposed Actual Value Initiative, or AVI. Under AVI, Nutter wants to fix Philadelphia's broken property-tax system by reassessing all homes and businesses in the city, and raise an extra $94 million for the school district in the process.

Property-tax debate gets even muddier

City finance director Rob Dubow.
City finance director Rob Dubow.

Philadelphia City Council members have long complained that Mayor Nutter hasn’t given them enough information about the ramifications of his proposed Actual Value Initiative, or AVI. Under AVI, Nutter wants to fix Philadelphia's broken property-tax system by reassessing all homes and businesses in the city, and raise an extra $94 million for the school district in the process.

Now Council members say the administration has drastically changed the little information it did provide, and this makes some more skeptical about passing AVI.

Earlier this year, the Nutter administration gave Council a taste of how AVI could affect specific neighborhoods. The analysis used an estimated tax rate of 1.25 percent for when AVI would fully go into effect. 

But finance director Rob Dubow is now estimating that the tax rate could be about 1.6 to 1.8 percent. That could change which neighborhoods are winners and losers under AVI. Council members also say that the administration’s estimate of the total value of all properties decreased, to about $80 billion.

At a Tuesday hearing, Councilman Curtis Jones Jr. asked Dubow if those numbers could be trusted.

“Just for the record, how did we go from $112 billion to $80 billion?” said Jones, adding, "You feel that’s a reasonable figure that we should lay our, hang our hats on?”

“Yeah, I think it’s a reasonable figure that we should work with," Dubow said.

Others, like Councilman Mark Squilla, questioned how this would affect property-tax relief bills that Council has been debating. These bills would lower taxes for some people, like longtime homeowners whose neighborhoods have been gentrified.

But Dubow said in an exchange with Councilman Bill Green that he was always clear that his previous estimates came with many caveats.

“What you told PICA was that there was a three to four times increase in the aggregate value of real estate in the city," said Green.

“Well, that wasn’t testimony," responded Dubow. "It was discussion at a meeting. And I think in testimony the following week I said we’re really not sure whether that’s right. We’ve said that pretty consistently.”

Dubow also said the neighborhood analysis was never meant to predict how AVI would impact the whole city.

Council’s deadline to pass a budget is June 30.

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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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