On AVI, it's yuppies vs. low-income Philly residents

Democratic state Representatives and city officials met at the Constitution Center to rally support for a package of laws intended to smooth the introduction of the Actual Value Initiative, trading a few barbs in the process.

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On AVI, it's yuppies vs. low-income Philly residents

POSTED: Tuesday, January 29, 2013, 2:45 PM

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As residents in Philadelphia brace for the impact of a drastic restructuring of the city's property tax assessment process, known as the Actual Value Initiative (AVI), Democratic state legislators held a conference yesterday at the Constitution Center to collect testimony in support of a package of state laws crucial to AVI's implementation.

Much of the meeting was dedicated to figuring out how much, precisely, to try and squeeze Philadelphia's yuppifying neighborhoods in favor of low-income, longtime homeowners.

"I have some people in my district who have seen their home value go up six or seven times," said state Sen. Anthony Williams. "What do you do for the person who bought a house for $30,000 that's now worth $400,000?"

Williams said that a $30,000 homestead exemption, a sort of tax credit for long time residents, wouldn't cut it.

Meanwhile, Councilman Mark Squilla also testified before the panel of legislators, warning that softening the blow for too many people would result in higher taxes for everyone else.

"Every protection we put in place will raise our millage rate," said Squilla, whose district encompasses rapidly gentrifying areas like Fishtown, the Northern Liberties and Queen Village.

But the biggest question remains how difficult it might be for the House Democrats' bills to win bipartisan support — and the votes of residents statewide.

One of these changes, a state constitutional amendment that would scrub what's known as the Uniformity Clause and allow residential and commercial properties to be taxed at different rates, is “the most significant,” according to Council President Darrell Clarke. Because Philadelphia must tax the Comcast Center and a rowhome at the same rate, updated assessments will yield a disproportionate impact.

“It’s estimated that commercial, industrial, hotel and apartment sectors will see a reduction in property taxes of approximately $111 million, while $100 million would be shifted to residential properties and $11 million to stores with dwelling units,” said Clarke. 

AVI has long been sold to taxpayers as a “revenue neutral” reform, and a major increase in the city’s residential tax burden could scuttle the plan. 

However, political support for the amendment is far from a sure thing, hence the House Democratic Policy Committee’s sudden appearance downtown. Any amendment would require two majority votes by the state's Republican-controlled legislature and approval by voters across Pennsylvania.

Decades of deferred assessments and political favoritism have left Philadelphia with one of the lowest, but also most unequal, property tax burdens in the commonwealth. The revised assessment process is meant to correct that. Yet conflicting accounts from City Council and the Nutter administration have left many residents in the dark as to what, exactly, the reassessments will mean for their particular tax bill.

The meeting made it clear that that $1.15 billion question would continue to be unanswered for now.

Clarke also revealed that City Council had still not been briefed on the, er, actual values the Office of Property Assessment had come up with for each of Philadelphia’s 579,000 parcels.

Rob Dubow, the city's Finance Director, testified that the specific values existed and would be released before Council began its budget discussion in two months time.

Meanwhile, Rep. Mark B Cohen, who gets a lot of his living expenses covered by taxpayers and so doesn't have to worry so much about AVI, took a 25-minute cell phone call onstage as Dubow testified.

Posted by Ryan Briggs @ 2:45 PM  Permalink | 1 comment
Comments  (1)
  • 0 like this / 0 don't   •   Posted 7:11 AM, 01/30/2013
    This article should have also drawn a connection between property taxes and the School District budget crisis. Schools are funded by property taxes. It is a cause of much of the social tension in about schools. Alternatives for funding schools should be pursued.
    tom-104


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