In April of 2012, the examiner.com reported on Mayor Nutter’s AVI bill and the opposition that it was getting from members of the Philadelphia City Council. At that time, Nutter believed that overhauling the city’s real estate tax structure would provide much needed money to the Philadelphia School District, $94 million to be exact. Instead of passing the bill, council chose to postpone it for a year and opted to raise taxes, all people’s taxes, for one year.
However, the AVI bill has now come to fruition mostly due to the fact that Pennsylvania lawmakers gave their approval, in a vote of 138-53, for Philly to move forward with the bill.
The AVI (Actual Value Initiative) bill would overhaul the decrepit and antiquated system of assessing real estate properties in three ways: 1. Changing the market value of every piece of property in Philly, 2. The way assessments are used to calculate tax bills, and 3. How owners deal with any large increases that could result as part of the new system.
There are a couple of really good reasons why passing the bill is so important and none of them has anything to do with what members of council believe. The first is that, under the old law, people paid less in real estate taxes and more in city wage taxes. Renters paid for it twice: being taxed a high rate through their place of employment and through their monthly rental fee while property owners paid less. It’s a new spin on the haves versus the have nots because City Council believe that the renters of this city are pretty much a nonentity.
The old bill prevented much needed tax revenue from being given to both the city government and the school district because not every real estate owner was paying their fair share; some paid less while others paid more. With the unemployment rate in Philadelphia at a whopping 10%, it means that less money was being collected through the city wage tax.
Last week letters went out and some people saw a decrease in their tax bill while others saw an increase. Certain areas such as the Queen Village, Fairmount, and University City were hit pretty hard. Affluent, downtown areas like Rittenhouse Square also got served. Areas such as Chestnut Hill, Wynnefield, and many areas of the Northeast will see a decrease. As usual, commercial land owners, many of whom already get huge tax breaks from the state, won’t be paying their fare share. Their taxes will go down.
It didn't take long for the piranhas of the media to go after Mayor Nutter and report that taxes for his Wynnefield home will go down implying that he may have pushed the bill to lower his taxes even when he said any money he would save on his home would be forwarded to the Philadelphia School District. No such offer was made by other political leaders or the residents who are made up of independent means.
What the media failed to heavily report is the fact that Nutter contacted the assessors to alert them that they had made a mistake and his bill will actually increase to $60,000 per year.
All is not lost, however. The city has several programs available to help out homeowners and there is also an appeal process. Packets that provide property owners with this information will be mailed next week.