Posted on Wed, Mar. 12, 2008
By Craig R. McCoy
Philadelphia tax officials yesterday hiked the property taxes on State Sen. Vincent J. Fumo's Spring Garden mansion dramatically, boosting its valuation for tax purposes from about $250,000 to just under $1 million.
The city Board of Revision of Taxes increased the valuation of Fumo's 27-room Victorian house, along with the values of about 60 other high-end properties that somehow had escaped proper assessment.
The BRT's action came on a day in which sources said that Fumo had decided to step down from the Senate in January after seven four-year terms.
Behind closed doors at the BRT, the move to increase Fumo's assessment sparked bitter fighting among board members.
About two weeks ago, the board's chairwoman, lawyer Charlesretta Meade, briefly quit as chair in protest over what she saw as the agency's foot-dragging in hiking Fumo's taxes. She later rescinded her resignation.
Though the BRT made public its new evaluation of Fumo's house, it declined to immediately identify the other properties in store for big tax hikes.
Kevin Feeley, the board's spokesman, said the agency wanted owners to learn of the proposed increases from an official notification rather than from the media.
Ken Snyder, a spokesman for Fumo, said the senator would accept the new value "as long as he is not being treated differently than any taxpayer." He did say it was "a little bit outrageous" that only Fumo's result was released.
Feeley said the board treated Fumo differently because his property had caused controversy. The seven-member board promised in October to hike Fumo's valuation, along with other high-end properties, to quell a furor sparked by the senator's decision to put his house up for sale for $7 million, an asking price that cast a glaring light on his house's low valuation. The board had valued the house at a fraction of that.
In January, Fumo cut his price by $1 million. Feeley said the board's best estimate now was that Fumo's house would likely sell for about $3 million, not the $6 million the senator is asking.
Under Philadelphia's convoluted tax system, the agency sets market value for tax purposes at about 30 percent of what its staff thinks houses would actually sell for. So the agency now estimates that Fumo's house would sell for about $3 million; it proposes to put the value for tax purposes at $953,000.
Next, the city does another computation to set the assessed value; that's computed at 32 percent of the BRT's market value. In Fumo's case, that's $305,000.
By contrast, for the last five years, the BRT has said Fumo's house would sell for about $830,000. Under the formula, his value for tax purposes was set at $250,000, and the assessed value at $80,000.
If the assessment stands, his tax bill for 2009 will be $25,201, up from $6,611 now. The sum will be due in March 2009, and thus might fall upon the next owner.
"By any measure, that is a substantial tax increase in one year," Feeley said. "I would describe this number as a good first step in the reevaluation of this property."
Feeley said the board could increase the value again if Fumo gets his asking price.
The Democratic Fumo, long one of the most influential politicians in Harrisburg and Philadelphia, was released Sunday from a hospital after a weeklong stay for a heart attack.
He has said he put his house on the block to raise money for his legal defense in his coming federal corruption trial.Fumo's Victorian showplace on Green Street near 21st Street has a six-floor elevator, seven fireplaces, three kitchens, a whirlpool bath, a custom-built vault, a wine cellar and a shooting gallery.
Last month, the board was subject to considerable derision after it said it had lost the file detailing Fumo's 2003 tax appeal. Board staff wanted to increase the house's taxable value from $200,000 to $436,000; after Fumo appealed, the board set it at $250,000.
After news broke in October of Fumo's asking price, some BRT members pushed for an immediate reassessment, but the move was defeated by a 4-3 vote.
Among those opposed were two board members with strong ties to Fumo.
One was real estate broker Harvey Levin, who has donated $32,000 to Fumo's campaign funds since 2000 and who has done personal real estate appraisals for the senator.
The other was Joseph Russo, president of a South Philadelphia charity that prosecutors say became a tool of Fumo's criminal endeavors.
Russo and Fumo also have personal ties: In the fall, the senator and Russo signed a legal agreement giving Russo power to sell a Fumo property in South Philadelphia, court records show.
Levin and the others argued at the time that targeting Fumo alone would amount to an unfair and possibly illegal "spot reassessment."
After the vote, however, the board agreed to group Fumo's property with others that had been assessed too low.
Feeley said that there were up to 125 properties in that situation and that all now face substantial tax hikes.
In general, he said, the houses would sell for more than $1 million and have at least 5,000 square feet of interior space.
Board staff yesterday completed their review of about half of the total group. Most of the properties are in Center City or the Spring Garden section.
Feeley said work should be complete on the rest within two weeks.
Tax board member Russell Nigro, a former state Supreme Court justice, said "fairness and equity" required the reevaluation of Fumo's home and the others. Nigro, once a Fumo ally, is now a political foe.
"I've been here for five months, hearing appeals in which people who are poor are coming in saying they face a $200 [tax] increase that they can't afford," Nigro said. "And yet we have multimillionaires with properties that are grossly undervalued."
Another board member, Alan Silberstein, a former city judge, said it was important for the board to make people pay their fair share. "Why should the poor guy get hit with it? It makes no sense," he said.
Brett Mandel, executive director of the tax-reform organization Philadelphia Forward, urged the BRT to swiftly release all the high-end homes on the revaluation list.
"It's all public information," he said. "That's one of the big problems with the system - there's total nontransparency in how the values are created, which creates zero confidence in the system."
Contact staff writer Craig R. McCoy at 215-854-4821 or cmccoy@phillynews.com.