City Council finalizes budget plan

City Council just finalized a budget plan today that would delay Mayor Nutter’s property-tax overhaul for a year and raise $40 million for schools.

Council gave the final OK to provide the school district with $20 million through a small property-tax hike. Members voted 12-4 with Council members Jannie Blackwell, Bill Green, Dennis O’Brien and Brian O’Neill voting against it. Councilwoman Maria Quinones-Sanchez was absent. Another $20 million will come from a business tax increase known as the use-and-occupancy tax. The latter was approved last week despite strong opposition from the business community.

The money raised from the property-tax increase will go into an accountability grant and is contingent on the school district meeting some of the requirements of an accountability agreement crafted by Council.

Nutter wanted to shift to a property-tax system based on market values, known as the Actual Value Initiative (AVI), collecting $94 million for schools along the way. But Council was uneasy about making a decision before the assessments were complete.

The administration warned that a ruling by the State Tax Equalization Board (STEB) could cost the city and the school district more than $100 million in appeals if AVI isn't implemented. At issue is the accuracy of the property assessments currently being used to calculate the city's tax bills.

State legislation sponsored by Rep. John Taylor that would exempt Philadelphia from the STEB ruling was approved by the House and is currently before the Senate.