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August 30, 2014, 2:18 am

Property tax reform in limbo

Paralyzed — and still unable to reach a consensus on a budget deal — City Council continued to wrestle with the details of a spending plan, as the clock continues to tick toward June 30 — the end of the fiscal year.

There are 14 different budget related proposals now before Council. Council members continued to meet late Thursday June 7 but at the publishing of thise article no deal had been announced.

“This is the most challenging budget process that I have been through,” Council President Darrell Clarke told reporters on Thursday, noting that he has served on Council for 12 years.

A deal will be reached by July 1, Clarke said, but would not commit to anything sooner.

“We want to make sure we have spending ability on July 1,” he said.

Two budget related issues have splintered members — an administration proposal to change the way property taxes are assessed, moving from a traditional assessment based on a fraction of a property’s value to one based on the full value of property — called the Actual Value Initiative — and the fact that a cash strapped school district is pressing members for more money.

Members are worried that they need to pass a budget before the administration can provide all the new assessment data, which won’t be available until July at the earliest, needed to reach an informed decision on AVI. Similarly, they are concerned that they have little oversight over how the district, which has repeated asked for more money, spends its allocation from the city.

On Monday, Clarke announced Council will consider both AVI and funding for schools in separate votes.

But by Thursday, severing the two issues seemed to have translated into little forward momentum for budget talks. Members met in the morning for their routine meeting, but most of the day was occupied with budget talks.

For the most part, discussions continued privately, with members meeting in small groups throughout the day. Members rotate in and out of meetings in small groups to avoid violating the state’s Sunshine Law. In a hint of possible discord, members remained sequestered longer than expected, delaying a meeting of the committee of the whole, which is required to move any legislation before Council.

“We need to make some decisions and we’ll vote those out of committee,” Clarke said.

He would not say what was going on behind the scenes nor comment on how close members were to reaching a deal.

“There is never a deal until it’s done,” he said. “I learned that a long time ago.”

If members fail to reach an accord — with at least nine votes — they could vote all 14 proposals out of committee and vote on each one in Council.

Late Thursday afternoon, Councilman W. Wilson Goode said he expected to see some action on bills related to revenue, but didn’t expect any action on the expenditure side.

Procedurally, any legislation would be required to have two readings — over a period of two weeks — and be open to public scrutiny before members vote.

Anticipating some sort of movement Thursday, several members of the public loitered in chambers hoping to give Council members their opinion on AVI.

One man, who declined to give his name, waved a slip of paper with several rows of numbers on it. Cornering a reporter, he said that by estimates he’d heard in hearings previously, property taxes for about 270,000 homes would go down and that they would go up for about 60,000 residents.

“Do you think that’s fair?” he asked, pointing to the paper. “They’re the ones that have to do the heavy lifting.”

He could later be seen forcefully showing his lines of numbers to Councilman Bill Greenlee.

It’s constituent passion like that that has members hesitant to take a stand.

“I’m not afraid to take a tough vote, but I like to know what I’m voting for,” Clarke said.

A budget has to be passed by the end of June because the city’s fiscal year begins July 1 and without the legislation to authorize new spending, the city would be unable to pay its bills.

At the moment, the final meeting of the session is scheduled for June 21.

Council has been inching toward a consensus for several weeks. Earlier this week, acting as a committee of the whole, Council members approved an added exemption for gentrifying neighborhoods.

The bill, which was fast tracked to Council, would provide tax forgiveness — for ten years — for residents living in neighborhoods with skyrocketing property values. The bill would forgive any taxes above a 300 percent — or three times — the current value of their property, for homeowners that have lived in their homes for a decade or more.

So, for example, a home that is now assessed at $100,000, but would rise to $400,000 under the new assessments, would only be taxed on a $300,000 value.

Members hope the tax break will shield longtime property owners in a manner similar to the tax abatement for new homes.

 

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. .