DN Editorial: Bad beh-AVI-or

WE COUNT on our leaders to know the difference between right and wrong. But sometimes we wonder.

Take, for example, Mark Squilla, who authored a bill just passed by City Council that would allow homeowners protesting their new property values to pay taxes based on the old system. He justified the bill by saying it was unfair to make people pay based on "incorrect" numbers that the Actual Value Initiative produced.

We can only assume that Squilla's contention that AVI numbers are not correct is based on complaints from some of his constituents - whose district has seen some of the biggest changes under AVI. So, he's allowing them to choose which number is more "correct" if they appeal their property tax: the old assessment based on the corrupted, outlawed system, or the new assessment, based on the city's efforts to get it right. If they lose their appeal, they don't have to pay penalties or interest on the difference between the two bills.

The Nutter administration calls this a tax-free loan. And given the sorry history of the city's tax collections, giving people tax-free loans is something we're good at.

The Office of Property Assessment should be as transparent as possible about its methods and process. But we don't believe the new values were politically motivated. That's not the case with some of the biggest voices challenging AVI.

Values are complicated. Even at best, property values are an alchemy: assigned by an entity - be it government or the market. The "value" to us as individuals, though, is mixed up in our history, our emotional life in the house and the neighborhood and the city, who we think we are and who we want to be.

The fact is, though, that at some point the city has to make the call to collect the money to keep itself going. And those Council members who are calling for the process to be done-over seem to be missing the point that even a do-over is going to leave people unhappy: a different group, and maybe even a bigger one. And then what?

That's why it's worrisome that the static over AVI could obscure a much bigger change that homeowners could be facing if tax experts hold sway in the coming years: Property taxes are going to start rising as other taxes fall. And if AVI is a controversy, it's nothing compared to that one.

Tax experts, including two tax commissions, decry the overreliance on business taxes and the under-reliance on property taxes for the city's revenues. Their shorthand: We should tax things that don't move, like houses, and not tax things that do, like jobs and businesses.

Until that shift happens, take comfort from the fact that whatever it is, your new property tax will be far lower than most cities in the state and many U.S. cities. The median property tax for Philadelphia County is $1,253, based on median home values of $142,000. Of the 18 big cities in the state, 14 pay more in property taxes than Philadelphia, many of those based on comparable home values or values that are far lower than ours. Allentown, for example, pays a median tax of $2,521 and median values of $138,000.

This shift away from business and wage taxes to higher property taxes will be a seismic one. But we better start getting used to the idea now.