Council members query Nutter on tax-abatement change

Five City Council members asked the Nutter administration Monday to examine the consequences of a bill that would alter the 10-year tax abatement on new construction.

This is the first time members have requested a "fiscal impact statement" from the administration since passing a law this spring giving them the authority to seek such an analysis on most bills.

Councilman W. Wilson Goode Jr. has been working for more than a year to change the 10-year tax abatement, which allows the owners of new homes to pay little in property taxes for a decade. He was not among those asking for the analysis.

Goode's latest proposal would end the abatement on the portion of property taxes that goes to the School District of Philadelphia, a move that ties his quest to the district's ongoing financial crisis.

About 55 percent of property taxes go to the schools, meaning a 10-year tax abatement under Goode's bill would apply only to 45 percent of a new home's worth.

In a study this summer, Kevin Gillen, an economist at the University of Pennsylvania, credited the abatement with sparking a surge in building in the previous decade, and developers have warned against changing the incentive.

Goode has said repeatedly that no studies had shown individual projects would have been impossible to build without the abatement.

He also said he did not believe an analysis of his bill could be done objectively, but would "reserve judgement."

Gillen said Monday that Goode's plan to alter the abatement would have little impact on the School District's $304 million deficit, but would have an "adverse effect" on construction and tax revenues related to building and selling new houses.

The fiscal impact request came from Council members Bill Green, Kenyatta Johnson, Curtis Jones Jr., David Oh, and Mark Squilla.

Johnson and Squilla represent neighborhoods that have been beneficiaries of the building boom.

On Monday, Goode blasted Green, who favors the abatement, saying he was more concerned about "the fiscal impact on campaign accounts."

Green said he merely wanted an objective view of Goode's bill.

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