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August 27, 2014, 7:08 pm

Green offers tool to estimate new tax rates

Councilman Bill Green has again stepped up to the microphone to blast Mayor Michael Nutter’s administration for not providing the data Council needs to make a decision on Nutter’s proposed property tax Actual Value Initiative. Green has released a spreadsheet that will help residents estimate how the proposal will affect them.

“In implementing AVI, we must proceed with full information, make data-based decisions and keep the public informed every step of the way,” Green said as he announced the launch of his spreadsheet to a small group of reporters on Monday at City Hall.

The spreadsheet provides the tools for property owners to use to estimate the value of their property and of their current assessment and plug them into the spreadsheet to get an educated guess of their property taxes under AVI.

As an example, Green walked reporters through the calculator using a house valued at $120,000 — the median property value in the city.

Under the current tax system, the property taxes would be $1,520.

Under AVI, there is a range of possibilities, dependent on whether Council enacts a homestead exemption, and how much, or whether council approves a smoothing measure proposed by the administration — but under most scenarios, taxes would go up.

For example, with no homestead exemption, the taxes on the property cited would rise to $1,755; with a $15,000 exemption they would rise to $1,600, and with a $40,000 exemption, they would jump to $1,310.

If council approves several amendments proposed by Green, the tax bill for the same property would be $1,607, $1,492 and $1,200 respectively. With the administration’s smoothing proposal, taxes would rise higher than under any of the other proposals to: $1,705, $1,744 and $1,732 respectively.

Green emphasized that the numbers generated by the spreadsheet were based on conversations and data provided by the administration and other sources, and represented a “best guess” by his office. He said he hoped it would serve as a way to provide residents with much-needed information.

“We now have a model,” said Green, adding that he was surprised the administration hadn’t provided a similar tool for Council and residents.

At the core of his opposition to the administration’s plan is a lack of information — particularly, the administration’s inability to provide Council with the total value of real estate in Philadelphia. That number is crucial, Green argues, because it is what will drive the rest of the city’s calculations as it moves to AVI, which is supposed to be revenue neutral, and generate the same dollar figure in its first year as was generated under the current system this year.

But administration officials have been unable to provide that figure, along with others, because the reassessment won’t be completed until July at the earliest.

Council must pass its budget by June 1.

“Would you sign a contract to buy a house at a price based on a formula with variables that won’t be known until a month after you move?” Green asked.

He has also expressed concern that the move to AVI will shift the majority of the tax burden to homeowners, because home values are expected to change dramatically with new assessments while commercial assessments have been kept more current and so more closely reflect the new value.

That has created an unintended shift in the administration’s plan which, Green said, will hit homeowners disproportionately hard. He estimated Monday that property taxes would not increase by 9 percent, as administration officials projected, but closer to 30 percent.

There might also be other unintended consequences, Green said, but without complete data it was impossible to tell.

“The unknown unknowns may exceed the many known unknowns,” he said.

An outspoken critic of the administration’s plan, Green said with more data he could be persuaded to support the move to AVI this year, because more complete information would allow Council to weigh in on ways to protect taxpayers.

“I could get comfortable with the shift to AVI this year,” he said.

Council has been wrestling with the mayor’s budget proposal for weeks and it is uncertain whether it can be passed before the June 1 deadline. Last week Green proposed several amendments to the mayor’s plan, and there are a couple of other pieces of legislation circulating in City Hall too.

He said he was unsure how his proposals would be greeted in Council chambers.

The administration has remained firm about the need to implement AVI this year.

Nutter’s spokesman, Mark McDonald, said he hadn’t seen the spreadsheet and couldn’t comment on specifics, adding, “We’ve been in discussions with the councilman … We’ve been working with councilmembers to try and answer their questions and we certainly have been in conversation with Councilman Green about the issues he’s raised.”

The spreadsheet is available at Green’s website, greenforphiladelphia.com.

 

Contact staff writer Eric Mayes at (215) 893-5742 or This email address is being protected from spambots. You need JavaScript enabled to view it. .