Property-tax hike hinges on iffy data, says group

The city's fiscal watchdog group raised concerns yesterday about the temporary 9.9 percent property-tax hike that received preliminary City Council approval this week.

Jim Eisenhower, board chairman of the Pennsylvania Intergovernmental Cooperation Authority, which must approve the city's budget and five-year financial plan, said he was worried about increasing taxes on a system that Mayor Nutter has criticized as inaccurate.

"When you have the city saying that the assessments as they are now are not tenable and based on faulty data, and you're adding a 9.9 percent increase on those faulty assessments, it seems there's certainly risk there," Eisenhower said, noting that the city could be vulnerable to legal challenges.

Mayoral spokesman Doug Oliver said the administration believes the tax hike is legal, adding that they assume the Council legislation has been subject to a legal review.

Council on Thursday gave preliminary approval to a $3.9 billion budget plan with a two-year 9.9 percent property-tax increase and new taxes on some tobacco products, but did not act on the soda tax Nutter wants.

While Council's plan would balance the books, Nutter has said there won't be enough surplus cash to get through the year - a concern Eisenhower echoed.

"It's cutting down to pretty much bare bones. As we've seen in the last two years, things tend to happen," Eisenhower said, noting the recent economic downturn and the unexpected blizzards this past winter.

Without the soda revenue, the positive fund balance in the coming fiscal year, which starts July 1, would be $42 million. With the soda tax, it would move up to about $56 million.

But some on Council think that the revenues they've provided are plenty.

"I think we are fairly safe at $42 million and I don't think $56 million gets us that much further," said Councilman W. Wilson Goode Jr. "I'm not prepared to go any further for the fund balance at this point."

Nutter has not admitted defeat on the soda tax and will try again to get the needed nine votes. He originally pitched the levy - which would be charged to retailers as part of their business tax - at 2 cents per ounce, but this week was trying to get support for 3/4-cent per ounce.

Failure to pass a soda tax would be viewed as a political loss for the mayor, who badly wanted a win on the proposal. Nutter spent much of Thursday personally lobbying members to support the soda tax, arguing that he may have to lay off workers without it.

Councilman Bill Green - a frequent critic of the mayor's policies - scoffed at the notion.

"I think it is fear-mongering. I think he is pushing for a sugar-sweetened beverage tax for reasons other than the fund balance," Green said.

Nutter has had problems corralling Council before. Last year, he failed to get his former colleagues to approve a property tax.

"I think he continues to have a problem with City Council," said Zack Stalberg, CEO of the watchdog group the Committee of Seventy. "There is no identifiable Nutter faction. It's a hard way to be successful."