Fumo affecting property tax reform

As Philadelphia City Council members consider how to provide relief to homeowners in gentrifying neighborhoods as the city moves to a market-value property tax system, they’re vexed by a problem.

The 25-year-old state law that enables the city to provide gentrification tax relief specifically prohibits Philadelphia from using income or age as criteria for getting help, even though the same law granted that flexibility to Allegheny County, home to Pittsburgh.

When I heard this, I wondered, Why would the law have such a restriction for Philadelphia alone?

Turns out there’s a two-word answer: Vince Fumo.

The once-powerful state senator who’s now serving a prison term for corruption got the restriction into the law.

Why?

City Councilman Jim Kenney was Fumo’s chief of staff at the time, and he told me the bill was born of a desire to help longtime residents in the Queen Village neighborhood, which was gentrifying. Kenney said Fumo believed permitting a means test might have limited relief to only the poorest homeowners.

“There were working-class families that lived in that neighborhood making maybe $50,000 between two working families and three kids, and they would have been eliminated with any traditional means test,” Kenney said.

When I noted that Council could have set an income standard that protected working-class families, Kenney said Fumo envisioned Council enacting a cutoff of something like 150 percent of the poverty level, and he didn’t want that to happen.

“We certainly weren’t looking to protect millionaires,” Kenney said. “But we certainly weren’t looking to exclude working families from the protection and force them to move out of the neighborhood.”

Council never enacted a gentrification relief bill in the ensuing 25 years, but members are interested now. Council President Darrell Clarke says he’s hopeful the Legislature will change the state law to permit Philadelphia to limit relief by age or income.For more on why, see Holly Otterbein’s piece.

Despite its special status, Allegheny County enacted a gentrification relief bill without an income test, and far more affluent families benefited than poor ones — resulting in years of controversy and litigation.