(June 2012)
Former Mayor William Green once called Philadelphia City Council "the worst legislative body in the free world." But, by insisting that we only move forward with the necessary effort to make real estate taxation fair and accurate after we collectively have a chance to review the proposed new values, Council acted appropriately and praiseworthy. Once Council reviews the values, it can set a new tax rate and craft the necessary tax policies to protect vulnerable homeowners and ensure a reasonable transition from our current unfair and inaccurate system to an equitable and legitimate system.
Mayor Nutter and his finance flaks urged Councilmembers to set a new tax rate by formula before understanding how their constituents would be affected by the changes. But, as it became clear that they were being asked to fly blind without seeing the ACTUAL proposed values that put the "actual" in the Actual Value Initiative, Council balked. They listened to the advice offered by community activists, tax experts (and me) and insisted that they would only move forward after seeing and vetting the values.
Council also refused the Mayor's request to use the Actual Value Initiative to increase Real Estate Taxes by $94 million.
To be sure, Council's actions are not without issues. Council's revised plan would make permanent the "temporary" tax hikes of 2011 and 2012, which would have expired this coming year. You certainly heard it here first that those "temporary" tax hikes were here to stay. Council also plans to generate more money for the School District by burdening Philadelphia's already overburdened taxpayers with another $40 million tax hike split between the Real Estate tax and the Use and Occupancy tax. (The U & O Tax is essentially an additional tax on commercial real estate.) That's now five straight years with a tax increase, if you are scoring at home.
I am the father of public-school students so I have a direct interest (three direct interests) in our schools. But, I remain unconvinced that the additional school funding will create a positive difference in terms of increased educational attainment and safety for Philadelphia students. I also don't understand why this extra money helps as, even with this infusion of extra cash, the District is still counting on union concessions and an unwise borrowing of more than $200 M to make ends meet. Most important, I don't understand why we are not looking to Governor Corbett for more school funding (the governor appoints the majority of the members of the School Reform Commission that runs the District), or why we are not first collecting some of the more than $500 M in delinquent Real Estate Tax before asking more of overtaxed City property owners.
Still, considering that this Council moved wisely to head off what could have been a tax-policy disaster, this is an opportunity to dole out praise. Freshman Councilman Mark Squilla deserves our thanks for pushing relentlessly to slow this process down and insisting on looking before leaping. Councilman Bill Green is worthy of our thanks for doggedly mining the data and creating the information products that demonstrated how the "unknown unknowns" created too much uncertainty to move forward. Councilman Kenney deserves credit for his candor in assessing that Council was being asked to carry too heavy of a load in setting tax policy without understanding the ramifications of their actions. Finally, Council President Darrell Clarke must be lauded for building a majority consensus guided by what makes sense instead of what could have been politically expedient. Together, these council members -- and all those who made this action possible -- demonstrated sound judgment and responsiveness to their constituents.
With its action this week, Philadelphia's City Council earns kudos as the best legislative body in the free world. What? Too effusive? C'mon, they are competing with the Pennsylvania General Assembly and Congress. We at least know conclusively that City Council is no longer the worst.
