Taxes, schools confront Philly City Council

Philadelphia City Council meets Thursday for the first time this year with intertwined issues of towering importance - schools and property taxes - figuring to dominate the legislative session.

Not only will Council be preoccupied with the School District's continuing financial distress, but some members plan to wade deeply into the district's plan to save $28 million by closing 37 schools.

As for property taxes, Council again must grapple with Mayor Nutter's plan to switch to a system based on the market value of property, which produced so many uncertainties in 2012 that the members punted for a year.

Council now has an idea of the total value of all taxable property in the city - from $96 billion to $99 billion. Members also know that the tax rate would have to be about 1.3 percent to 1.4 percent of a property's value - from $1,300 to $1,400 per $100,000 in value - to collect the same $1.2 billion in property taxes as the previous year.

Neither piece of information was available last year, when the members decided to delay implementing Nutter's Actual Value Initiative (AVI).

What still isn't clear is how AVI will affect neighborhoods and individual homeowners. While many areas of the city will see slight decreases, some neighborhoods where homes prices have exploded - such as Graduate Hospital and Northern Liberties - are likely to face enormous hikes.

The administration has promised Council fuller neighborhood data, but has yet to deliver.

"I don't expect anything, that way I'm not disappointed," said Councilman James F. Kenney.

The administration also has promised to mail out the results of a citywide reassessment by mid-February, letting every owner know what the city believes the properties are worth.

Once all that information is known, Council and the administration must agree on the tax rate and possible relief measures.

The most common breaks are the homestead exemption, which would allow every homeowner to deduct as much as $30,000 from assessments before the tax rate is applied, and a gentrification bill that would give relief to residents who lived in neighborhoods before they became trendy and real estate prices shot up.

Any tax break, however, would raise the overall rate. Some Council members are saying that it might be better to not have relief measures and keep the rate as low as possible.

Kenney said he might prefer to start with a rate of about 1.0 and then thoroughly examine the needs of every city department for cuts.

"Maybe what you're spending money on aren't the right priorities," he said.

Councilman W. Wilson Goode Jr. said the members "must be responsible" and set a tax rate that fully funds city operations.

"I'm not prepared to say what that rate should be," he said. "But anyone who's calling for service cuts should identify those cuts."

What's clear is that Council and the mayor have little appetite for tax increases. Council has raised property taxes in each of the past three years, the last two times to directly benefit the School District.

Despite those hikes, the district still faces a $1 billion, five-year deficit, and Council President Darrell L. Clarke expects another request for more money.

He noted that Gov. Corbett, who has cut education funding in recent years, appoints three of the five members of the School Reform Commission.

"I think that City Council has stepped to the plate in consecutive years, with the state going in the opposite direction," he said. "I genuinely believe the state needs to make a stronger financial commitment to the School District."

Clarke said Council members, who have been dealing with angry reactions from constituents about proposed school closings, are likely to be heavily involved in the issue.

Ten of the 37 proposed closings are in Clarke's Fifth District, which includes a large section of North Philadelphia. He has joined the call for a moratorium on closings.

"I would like this process to be extended to allow real participation of parents and residents," he said. "The reality is there probably will be some quote-unquote rightsizing of schools . . . but it should be done in a reasonable way."

Councilwoman Maria Quiñones Sánchez, who has two proposed closings in her district, said that if Council is not going to find more money for schools, "then we have to talk about how to support the rightsizing."

She added, "Asking for a moratorium is almost irresponsible. We asked the School District to come up with a five-year plan and come up with a plan to rightsize."