Council nearing compromise on tax plan and more money for schools?

With time running out to pass a spending plan for the pending fiscal year, City Council seems to be inching closer to a budget compromise that could include passage of the mayor's controversial property-tax proposal, City Hall sources said Thursday.

Council is set to gather on Tuesday to hash out its options at a committee hearing. A consensus is not yet clear, but sources said that some members are interested in approving Mayor Nutter's plan to move the city to a property-tax system based on market values, known as the Actual Value Initiative (AVI). Whether they also will agree to raise an additional $94 million in revenue for schools through AVI — as Nutter has proposed — is less certain.

Sources said that support may be growing for a proposal from Council President Darrell Clarke to raise some money through a smaller property-tax hike, combined with an increase in a business tax known as the use and occupancy tax.

"That's certainly one of the options," said Councilman Bill Greenlee. "I don't think there has been any consensus yet."

Other possible parts of the final package are a homestead exemption that would knock $30,000 to $40,000 off all homeowners' assessed values. Council is also reviewing an amendment to provide protection for longtime homeowners in gentrified areas.

Councilman Mark Squilla said he was concerned about whether state lawmakers would pass enabling legislation for AVI.

"If we know what direction the state is going, it's going to be easier," Squilla said.

At a joint news conference Thursday, Nutter and state Sen. Tony Williams called for support of AVI. Williams accused fellow state lawmakers of slowing the process.

"Those bills were moving through the Legislature quite effectively, quite quietly. The governor was prepared to sign them until Philadelphia decided to have its own food fight," Williams said.

One state lawmaker who has raised questions on AVI is state Sen. Larry Farnese, who has introduced legislation that would require Council to deal with AVI and schools revenue as separate issues. That would mean two separate votes, making passage harder.

"I support AVI," Farnese said. "I don't understand why Tony Williams isn't supporting my amendment. It doesn't preclude them from doing anything."