Goode opens new front on Phila. schools crisis

PHILADELPHIA A new front appeared to open in the Philadelphia school funding crisis Thursday when City Councilman W. Wilson Goode Jr. tied his long-standing effort to reduce a home-building tax incentive to the daunting deficit facing the schools.

In a meeting interrupted by chants of "save our schools" from the gallery, Goode called for a final vote on a bill he introduced last year to cap the 10-year property tax abatement on new residential construction at $500,000 of a property's value.

He also introduced a second bill Thursday that would eliminate the abatement on the portion of property taxes that go to the School District of Philadelphia. Property taxes are split between the district and city government, with the schools getting 55 percent.

Council voted to table the bill to cap the abatement, but Goode vowed that he would "prevail on one or both of these bills."

The meeting was Council's first since its summer recess, and school talk was in the air. As Goode was about to speak at the end of the session, dozens of sign-waving education advocates interrupted him for about 10 minutes of chanting "Save our schools."

They also chanted, "Charity is no substitute for full funding," an apparent reference to Mayor Nutter's announcement Wednesday of a fund drive to help schools purchase books, paper, and other basic supplies.

"Until we get full and fair funding, we'll be back," the protesters promised as they left the chamber.

Goode said he would continuing calling for a vote on his cap bill, and he noted that his "friends" would return next week.

The School District is grappling with a $304 million deficit. Among other revenues, the district is counting on the city to provide an extra $50 million in the coming months.

Councilwoman Jannie L. Blackwell introduced a bill Thursday on behalf of all Council members to transfer $50 million to the district in exchange for a portfolio of shuttered schools that could be sold to pay back the city. That's the plan Clarke prefers.

Nutter wants to borrow the $50 million instead - but a bill key to launching that plan was not introduced Thursday for lack of a sponsor on Council.

The tax abatement that Goode wants to change has been credited with sparking a building boom in certain neighborhoods in the 2000s. But the program has gained critics in light of the school crisis and a revamped property tax system that will lead to huge increases in bills for some homeowners this year.

For new construction, the abatement exempts the value of a home from taxes. Although owners still pay on the value of the land, they end up owing very little in property taxes for 10 years.

The abatement mostly has spurred development of condo towers in Center City and rowhouses and apartment complexes in bordering neighborhoods such as Northern Liberties and Graduate Hospital.

"It's generally a tax break for the few, the new, and the well-to-do, not for most of Philadelphia," Goode said.

Builders argue that the abatements offset the relatively high cost of labor and construction in Philadelphia, spurring projects that create jobs and attract residents.

"That's all going to be thrown out the window," said developer Carl Dranoff, who attended Thursday's meeting but did not address Council. "It's a total project-killer."

Dranoff, developer of buildings such as Symphony House and 777 South Broad, testified in June against capping the abatement, engaging in several testy exchanges with Goode.

If the abatements were capped, Dranoff said Thursday, he would halt about a half-dozen projects he was planning to start after 2016, when Goode's bill would go into effect if enacted.

"Lenders wouldn't give us the money," he said. "It's lunacy."

Councilman Bill Green on Thursday read off a long list of high-profile projects, like Naval Square and the Liberty Two conversion, that he said "would not be developed without the tax abatement."

"The abatement is not about helping wealthy people not pay taxes," he said. "It's about getting buildings built in the first place."

Goode said the argument that the abatement attracts wealthy residents to the city amounts to stealing from the school system to bribe people to live here.

"We should be focused on better schools for the Philadelphia," he said. "Not on importing people they think are better."