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September 1, 2014, 3:01 pm

Clarke: Tax reform not final

Two tax bills — one that would change the way city properties are assessed and another that would raise the city’s use and occupancy tax — were given preliminary approval Thursday night by City Council after a long day of negotiating.

But, in a move that leaves the issue of tax reform cloudy, council also left itself an out, moving a third bill out of committee that would give it the option of delaying the overhaul for the property tax system another year.

Council leaders, even after voting was done, cautioned that nothing was final.

“There is never a deal until it’s done,” Council President Darrell Clarke told reporters Thursday afternoon and again repeatedly throughout the day. “I learned that a long time ago.”

All three bills were voted out of committee Thursday shortly after 8 p.m. Council members were still deadlocked at Tribune press time Thursday but emerged in the early evening to vote. In addition to moving the bills out of committee, Council is giving them a first reading, which means final passage could come as early as June 14.

Of the three bills, the Actual Value Initiative, the property tax reform bill, was the most controversial. It passed with an 11-6 vote, with members Mark Squilla, Jannie Blackwell, Bobby Henon, Kenyatta Johnson, Dennis O’Brien, and Brian O’Neill voting against it.

That solid majority indicated to Councilman W. Wilson Goode Jr. that it will ultimately pass, probably in vote next week.

“The votes for AVI were there for several weeks,” Goode said. “But, we were deciding how to amend the bill and how to present it in its best form. It may be amended further.”

As approved this week, it includes a $30,000 homestead exemption, up from the administration’s proposed $15,000 and a number of technical amendments, including one that would set a minimum property tax of $100.

It would raise about $40 million for the school district, less than half of the $94 million raised under the administration’s proposal.

According to Goode, the passage of the bill to delay implementing AVI, sponsored by Squilla, was done merely as a way to gain votes for the use and occupancy tax bill.

“The Squilla bill does not have the support of a majority of Council,” Goode said. “There was a decision to report the bill out of committee in an effort to gain more votes for the use and occupancy tax.”

Goode had no doubt AVI would pass.

“AVI will move forward,” he said. “The question is whether the votes for the u-and-o tax will remain.”

But, Squilla noted that his bill passed by a larger margin 13-4 – with only Goode, Blondell Reynolds Brown, Marian B. Tasco and Maria Quiñones Sánchez voting against – than the AVI bill did.

He admitted that he only has four or five solid votes for his bill, but added, “There are still people that voted for (AVI) that are on the fence.”

Squilla said he didn’t expect a final vote until June 21, and hoped to have marshaled the votes needed to delay AVI.

“I’m just opposed to doing this without the proper values,” he said.

The administration has asked council to approve AVI without knowing several key values, including the total value of all of Philadelphia’s real estate, which is needed to set the city’s millage — and without having new assessments completed.

“Until we actually have all the information, I’m not sure we can put the proper safeguards in place to protect the residents that are going to get hurt the most,” said Squilla.

The use and occupancy tax bill also passed 11-6. Less controversial and linked to AVI, it would increase the city’s use and occupancy tax, and equalize the tax burden on residential and business property owners.

If ultimately passed, it would raise about $45 million on top of the $40 million raised by AVI.

The approvals came after weeks of behind-the-scenes talks that culminated Thursday in a marathon session for Council members, as they worked to end the impasse before June 30, the end of the fiscal year.

What Council didn’t do Thursday was actually approve a budget. All measures passed this week were potential revenue measures. Council has yet to deal with spending. So, budget hearings continue at 11 a.m. Monday. Council meets again at its regularly scheduled meeting on June 14. Goode said he expected a full budget to pass then.


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