Philadelphia's real-estate-tax disparity has been plaguing city finances and taxpayers for decades. Neighborhoods that were once thriving economic centers are now pockets of poverty. Neighborhoods that were once among our poorest are now home to million-dollar houses and condominiums. Despite shifts in wealth, demographics and population, our property-tax system has not changed with the times.
Leaders in the city have chosen to sidestep this reality for years because of the perilous nature of dealing with tax policy. However, we asked to do this job in good times and bad. When times are good, tough realities are easy to keep on the back burner, but economic downturns always force us to "look under the hood."
Mayor Nutter is showing commendable leadership by pursuing a fairer system of assessing property taxes called the Actual Value Initiative. In City Council we all pledged to fix the system. The Actual Value Initiative does exactly what it says — it assesses your share of property taxes based on a percentage of what you could sell the property for today.
Taxing properties in Philadelphia based on their actual marketplace value will not only yield a fairer, more transparent process, it also will yield an additional $92 million for our schools.
Real-estate experts can quickly tell you that townhomes in Society Hill currently valued at $300,000 according to the City's Office of Property Assessment easily could sell for seven figures. Although the steep discount on real-estate taxes may feel like a private score for the homeowner, it is a decisive loss for students attending schools that cannot afford textbooks and basic supplies.
Some have suggested that the move to AVI has nothing to do with funding our schools, that linking the two is little more than a political distraction. We respectfully disagree. In cities, counties, boroughs and townships across the country, property taxes are the critical linchpin to funding public education. Homeowners have a vested interest in assuring that children in their community receive a quality education, have a fair shot at a good-paying job and ultimately end up reinvesting in the neighborhood. That is why people who can, when they have children, move out of the city to the Pennsylvania suburbs or New Jersey, where the taxes are much higher but schools are much better because of the larger investment.
The move to AVI is not a singular political issue that exists in a vacuum. It is a critical piece of a long-term strategy to take care of our own house, funding public education in Philadelphia from the inside out. We have for too long relied on dollars from Harrisburg. We were spoiled by one of the most forward-thinking "believers" in public education, Gov. Ed Rendell, who unapologetically put his money where his mouth is, not just for Philadelphia but for students across the commonwealth. Few could have predicted that his unabashed support of public education would be so quickly and dramatically rolled back by Gov. Corbett, whose vision of public education stands a full 180 degrees apart from his predecessor — removing nearly a billion dollars, for Philadelphia alone, over the last two years.
We stand with Mayor Nutter, prepared and willing to take a course correction that will help us move the needle in the right direction.
City Council and the mayor have asked the state for all the tools it needs to create buffers for seniors and people on fixed income. City Council will make sure we keep people in their homes.