City's property-tax board backs overhaul

Philadelphia's Board of Revision of Taxes unanimously endorsed a sweeping overhaul of the city's bewildering and inequitable property-tax system yesterday, a move that could lead to big tax increases for many property owners in years to come, while others will likely enjoy significant tax cuts.

Board members stressed that they were at the very beginning of what will likely be a long and politically fraught transition, and that this year's property-tax bills will not be affected. But the vote was still significant as the BRT's clearest public acknowledgment that the way the city assesses property is deeply flawed.

"The system is broken and needs repair. That's just the truth of the matter," member Alan K. Silberstein said, and several other members echoed that view.

As few as 3 percent of Philadelphia's 400,000 homeowners are taxed on the actual value of their properties, an Inquirer analysis found last month. The rest get bills that have little to do with the real worth of their property: Some pay way too much, others far too little.

The BRT's Actual Value Initiative (formerly called the Full Value Project) seeks to fix that problem by reassessing all properties in the city and doing away with the city's confusing fractional system, which purportedly assesses properties at 32 percent, rather than 100 percent, of market value.

In theory, once the BRT is done, the system will be more equitable and it will be easier for owners to figure out if the assessed value squares with their home's worth.

Theoretically, the city and school district do not stand to get any more money out of the transition, but the impact on individual taxpayers could be significant. While 37 percent of property owners could see their property tax bill cut by $100 or more under the proposed system, 39 percent might see a spike of $100 or more, according to The Inquirer's analysis. Some would see far bigger increases.

"Some very popular politicians have become not-so-popular politicians trying to fix problems like this," said Brett Mandel, president and chief executive officer of Philadelphia Forward and a vocal critic of the current system.

So for six years, an overhaul has been in limbo. The BRT argued that before it could act, City Council must adjust the tax millage. Council replied that it could do nothing until the BRT provided more data.

"Obviously, none of these guys want to go first, so they keep passing it back and forth," said City Controller Alan Butkovitz, who opposes the Actual Value Initiative.

After yesterday's vote, however, Council seems to have little choice but to deal with the property tax, and there is plenty of legislative work to be done to ameliorate the impact of big and sudden tax increases on owners of properties that have long been taxed too little.

"Do I want to do it? No. Are we going to have to do it at some point? Yes," Councilman Jim Kenney said.

Now may be as good a time as any for Council members to swallow hard and change the system: Council elections are three years away, a fact not lost on them.

"I'd rather do it now than do it the year before we run," Kenney said.

Council incumbents will also have mayoral cover. Nutter supports the transition, and his spokesman Doug Oliver called yesterday's BRT vote a "step in the right direction."

Board chair Charlesretta Meade said repeatedly yesterday that the BRT would cooperate with the mayor and Council, but that does not necessarily mean the board is willing to wait for Council indefinitely.

"We can't drop the ball on our end and do nothing at all," BRT board member Russell M. Nigro said.

Philadelphia Forward's Mandel said that he will meet with board officials Tuesday, and that if he concludes they intend to delay the transition, he will go to court to try to compel them.