(Clarification: Property tax increases billed as temporary were first made permanent in June 2012 when City Council delayed Mayor Nutter's planned shift to a new property-tax system based on market values also known as the Actual Value Initiative.)

REMEMBER THOSE temporary property-tax hikes?

Under Mayor Nutter's planned shift to a new property-tax system based on market values - known as the Actual Value Initiative (AVI) - those tax increases would be permanent. The city announced Wednesday that it wants to collect $1.2 billion in fiscal year 2014 - the same amount of revenue generated this fiscal year.

In a huge step toward fixing the city's broken property-tax system, Nutter said the approximate total value of the city's 579,000 properties is $96.5 billion - more than twice the total value of taxable properties, which is $38 billion. A remaining 16,065 properties still need to be assessed.

"For decades, our system for assessing properties in Philadelphia has been completely broken. It's unfair, inaccurate and totally confusing," said Nutter. "Fixing the system is what the citizens of this city have called for."

Nutter is eyeing a 1.3-percent tax rate, or a 1.4-percent tax rate with a homestead exemption that would lower assessments by $30,000 for all property owners who live in homes they own. That rate could change if Council tacks on additional protections. In June, Council decided to delay AVI for a year because members were concerned about approving it before assessments were done. At that time, the city put the tax rate as high as 1.8 percent.

"It's encouraging," said Councilman Wilson Goode Jr. "We're not looking at the tax rates we were looking at in the spring."

Under AVI, some property owners will see their tax bills drop, while others, especially in gentrifying neighborhoods, will see huge increases.

For some Council members, the proposed tax rate is still too high. "Ideally, I'd like 1 percent," said Councilman Mark Squilla, whose district includes South Philly, Center City and Old City. "I'm looking for alternative ideas."

More information is expected in the coming weeks on how AVI will impact neighborhoods, what the tax-burden shift between residential and commercial properties will be and more. Finance Director Rob Dubow said the administration expects property-tax appeals to go up by 50 percent after AVI, which could mean about $30 million in lawsuits.

AVI will remain a hot topic through the budget season. Council will have to set a new tax rate next year. Reassessments will be mailed to property owners in February and homestead applications are due by July 31.