Public school supporters protest tax abatements outside Rittenhouse highrises
Against the backdrop of tony Rittenhouse Square, protesters with the Philadelphia Coalition Advocating for Public Schools and like-minded organizations donned Halloween costumes Tuesday afternoon for a festive rally against the city's 10-year property tax abatement.
The abatement, which became law about 15 years ago, applies to all newly-constructed or improved properties in the city.
But, according to a report released Tuesday by PCAPS, the program will deprive Philadelphia schools of millions in property tax revenue in the coming year, with three buildings in Rittenhouse Square alone accounting for $2.1 million of the loss.
"The paper we are releasing today documents two facts," activist and retired teacher Ron Whitehorne said. "One, the schools are losing significant revenue because of these abatements. We project the loss at $50 million in the coming year. "Secondly, the main beneficiaries of these tax breaks are wealthy real estate developers and owners. Of the more than 16,000 tax-abated properties, the top five properties alone account for $15 million in lost revenue to the school district. These are luxury condos and housing developments concentrated in Center City."
The PCAPS report, titled "Short-Changing Philadelphia Students," found just 24 percent of property tax abatements go to single-family homes, while the majority of abated properties are owned by large developers.
"While our schools are suffering, our city's most wealthy building owners are not paying their fair share," said Kia Hinton, an activist with Action United and mother of three students in the city public school system.
The protesters attempted to deliver a "Trick or Treat" message, leafleting tax-abated luxury highrises 10 Rittenhouse, 1706 Rittenhouse and Parc Rittenhouse, but Civil Affairs officers and private security denied them entry.
Still, they vowed they'd be back, and that they'd keep the pressure on elected officials to modify the tax abatement to be more targeted so it benefits blighted neighborhoods, rather than already-thriving areas like Center City.
Kevin Gillen, senior research consultant at the University of Pennsylvania's Fels Institute of Government, said the protest was somewhat short-sighted.
"Unfortunately, I fear the abatement has been framed as 'school kids versus new development' when, in fact, the abatement helps fund schools by attracting new residents and expanding the tax base in the long term," he said.
Gillen pointed out developers pay wage and sales taxes for labor and building materials. New residents, in turn, become a continuous source of city wage and sales tax revenue.
"Basically, you trade off a little money in foregoing property tax revenue for 10 years in order to get more money from new economic development, new residents and new jobs," he said.
Gillen further contended the abatement "has been absolutely critical to our building boom," pointing to a report he authored earlier this year.
"In 1990, we had almost no new construction in Philadelphia county, but plenty in the suburbs. When the abatement was passed and went into effect, new construction in Philadelphia almost immediately tripled, while it declined in the suburbs," he said.
Whitehorne called the argument "extortion" and contended the city's cash-strapped schools are more likely to discourage new residents from moving to Philadelphia than a lowered or abolished abatement.
"I'd rather invest in schools, invest in the quality of infrastructure and take our chances," he said.
Allan Domb of the Greater Philadelphia Association of Realtors called the protesters "misdirected."
"We need to bring people to the city who pay taxes and provide jobs, that's important — it helps everybody," he said. "There's no downside here. No one's trying to take money from the school district."
He said school funding advocates should instead focus on the $1.6 billion in delinquent tax revenue owed to the city.
"The direction of this march should be at the 15 percent of people who don't pay their taxes," he said. "The energy of the people here is misdirected."