As City Council mulls Mayor Nutter's proposal to shift to a property-tax system based on market values, Council President Darrell Clarke revealed a plan Thursday that would lessen the blow to longtime homeowners, seniors and low-income residents.

Clarke's proposal includes a plan to give property-tax exemptions to homeowners of 10 years or more in neighborhoods where property values have spiked due to development. The bill doesn't yet specify the amount of the exemption, and the city would need enabling legislation from the state.

"Regardless of what happens, we need to be in a position to provide some level of support for individuals who are simply not in a position to pay the increase in taxes," Clarke said.

Nutter's plan to move to a new property-tax system, known as the Actual Value Initiative, would make permanent two tax hikes that were deemed temporary and collect an extra $94 million for the school district. Critics call it a tax hike, but Nutter has said the city is simply capturing the increase in property values. Some Council members argue that providing extra cash for the schools should be debated separately from AVI.

The administration has been eyeing protections for homeowners, including a three-year phase-in and a homestead exemption that would need state approval and would take $15,000 off assessed values.

But for some Council members, that wasn't enough to protect the city's most vulnerable residents, who can't afford a tax increase.

Clarke said his proposals would give a wider range of tax relief than Nutter's plans. He also proposed a bill to give a tax credit to low-income homeowners based on annual income. The amount of the tax credit would vary depending on income. A third bill would amend a law that lets the city grant deferrals, while considering household income, expenses and liquid assets, but under Clarke's proposal would reduce interest rates. A fourth bill would let residents pay property taxes in four equal installments over the next three years without interest.

Mayoral spokesman Mark McDonald said the administration will work with Clarke "to protect low-income Philadelphians that may be impacted by the move to Actual Value." n

Contact Jan Ransom at 215-854-5218 or, or follow on Twitter @Jan_Ransom.