In a historic 15-2 vote, City Council yesterday approved legislation that paves the way for a complete overhaul of Philadelphia's notoriously inaccurate property-assessment system, starting with the abolition next year of the Board of Revision of Taxes.
Only one hurdle remains: approval of the changes by voters in the May primary election, a step required to alter the City Charter.
If voters give their assent, the BRT will cease to exist at the end of business on Sept. 30. The next day it would be replaced with an Office of Property Assessment under the indirect authority of Mayor Nutter and with a board that would hear appeals from property owners.
The appeals board would have seven mayoral appointees, but Nutter must choose from nominees compiled by an independent panel. Council would then have the right to approve or reject Nutter's picks. The elaborate appointing mechanism is intended to shield board members from political pressure.
"It's the most significant piece of reform legislation that's been passed in City Council since the 1950s," said Councilman Bill Green, who introduced the bill. "It fundamentally reforms the structure of appeals and assessments in the city of Philadelphia. And it will provide the basis of a fair, transparent, and uniform tax process, which we haven't had in probably 100 years."
For decades, the BRT operated in relative obscurity, its members appointed by city judges behind closed doors. Used by party leaders and elected officials as a patronage jobs bank, the agency habitually flouted state Sunshine Act laws and cut deals on property values for influential property owners and businesses.
A series of Inquirer articles detailed those failings and showed that the BRT presided over an assessment system that is among the least accurate and most inequitable in the nation. Because of faulty assessments, hundreds of thousands of property owners in Philadelphia pay more than their fair share of taxes while many others pay too little.
"This is hugely significant, partly because real estate taxes affect just about everybody who lives in the city," said Zack Stalberg, president and chief executive officer of the government watchdog Committee of Seventy.
Stalberg likened the landmark legislation to campaign-finance rules that Nutter sponsored as a councilman to cap contributions, crippling the city's pay-to-play culture.
BRT member Robert N.C. Nix III, who has been speaking for the agency in recent weeks, did not return a request for comment yesterday.
Former BRT chairman David B. Glancey said Council had done "the right thing."
"The way they are looking to split the assessing and appeals function I think makes sense," said Glancey, a former chief of the city Democratic Party who ran the BRT for 17 years. "I don't think there's any doubt that there has to be a change in order for the public to buy in to whatever the property-tax system will be in the future."
Before he left in 2007, Glancey tried to shift the BRT to a method of assessing properties known as Actual Value Initiative, with the intent of setting property values that are more accurate, fairer, and easier to understand. Although the BRT has continued its work on that project, the Nutter administration has expressed serious doubts about the agency's preliminary assessments, meaning that a citywide revaluation could still be years away.
Yesterday's vote was "just the first step," Council President Anna C. Verna said. "When we get to revaluation, that's the biggie."
Still, she said, the vote was a major achievement.
"Today we did something that should have been done years ago," Verna said. "It's a day that the citizens of Philadelphia should be thankful for."
Nutter concurred and suggested that passage of the legislation was proof his administration and Council could work well together.
"This is a significant moment for the city. It demonstrates that the administration and City Council can get great things done. We've worked in concert to bring about the sort of change that people have talked about for decades but that had never happened," said Nutter, who had proposed overhauling the BRT while he was a councilman.
Patronage is at least partly to blame for Council's failure to change the BRT until now.
Political leaders including Verna have long had friends and allies in patronage positions at the agency. About 80 of its employees are paid by the school district instead of the city. That permitted them to evade civil-service restrictions on political activity.
Yesterday, Council members Jannie L. Blackwell and Curtis Jones Jr. cited the workers in those patronage positions when they cast the two votes against Green's bill.
"This bill does not ensure job protections for those least able to protect themselves," Blackwell said from the floor of Council. "I think it is unfair, unconscionable, dishonest, and immoral to victimize people who are doing a good job because we feel the agency is not being run correctly."
Although many on Council shared Blackwell's views on the patronage positions, the workers in question are already under Nutter's direct control by dint of a memorandum of understanding signed between his administration and the BRT in October.
This week, Nutter announced that the patronage employees would have to give up political activities and pass a civil-service test to have a chance at keeping their jobs.
The memorandum of understanding is set to expire in April, but it can be extended month to month. If voters approve Council's charter change, the memorandum will be moot.
Richard Negrin, whom Nutter appointed Monday as interim executive director of the BRT, said he was delighted by the Council vote.
"It's like all branches of government are in agreement with the reforms that need to take place," Negrin said. "I hope the citizens of Philadelphia will overwhelmingly support the effort."
In the May primary, Philadelphia voters will be asked:
Shall the Board of Revision of Taxes be abolished, and its powers, functions, and duties be reassigned to a new Office of Property Assessment (with respect to the making of assessments) and to a Board of Property Assessment Appeals (with respect to appeals from such assessments), with the members of the board appointed from nominations made by a Board of Property Assessment Appeals nominating panel?