Philadelphia is replacing old inaccurate property tax assessments this year by recalculating the value of every home and business. The plan isn’t getting a good response in City Council because it would bring in more money.
The current proposal the Actual Value Initiative (AVI) would produce about $90 million more than collected now and designate it to support Philadelphia’s schools. Critics call it a backdoor tax increase. Mayor Michael Nutter says it’s just charging taxes based on rising real estate values.
City Finance Director Rob Dubow was asked by Councilman Jim Kenney to justify a plan that brings in more money. Dubow passed the question to the School Reform Commission.
“The SRC and the district administration understand they have to justify it and they will justify it,” said Dubow.
“What mechanism do we have to make them justify it?” asked Kenney. “They haven’t justified any of the tax increases we’ve given them so far and one of them was in an election year.”
Kenney says Philadelphia property owners have endured tax hikes over the past two years, so AVI will be the most difficult and angry issue council has seen in decades.
“I can’t yet find a justification to the people I represent citywide why the additional $94 million makes sense,” said Kenney.
Other members of council are concerned about potential civil suits on the issue.