Philadelphia should finish the job it started with the Actual Value Initiative by taking a comprehensive look at its overall tax structure. But it should avoid damaging its property-tax abatement program under a proposal by Councilman W. Wilson Goode Jr.
Goode is right to tie the public schools' perennial request for alms to the revenue the city collects. But targeting the abatement program outside the context of comprehensive tax reform is shortsighted - albeit understandable, given how reluctant politicians are to even say the word taxes.
In light of such aversion to tax reform, Mayor Nutter deserves credit for pushing AVI despite criticism. Finally, properties will be assessed based on their actual value. Property owners who paid more than they should will get relief. And those who benefited from inaccurate assessments will pay their fair share.
The abatement program makes winners and losers. It has spurred development in attractive areas of town with the amenities to lure homeowners and businesses. Meanwhile, residents of more modest neighborhoods have complained that they haven't benefited from the tax break.
Goode tapped into that sentiment with his earlier attempts to end or alter the abatement program, which exempts newly constructed or renovated properties from taxes for 10 years. Now, with city schools facing another deficit, he has amended his idea.
Since about 55 percent of city property-tax revenue is earmarked for schools, Goode wants to limit abatements to 45 percent of property value. That bad idea would not only reduce the incentive to develop in affluent areas; it wouldn't help lower-end neighborhoods that crave development.
The Greater Philadelphia Association of Realtors has a better idea: Keep the existing 10-year program, but reduce the abatement by 20 percent annually, beginning in the sixth year. Also, start a separate, 25-year abatement program for new construction and renovation in neighborhoods where the average price of a home is no more than $125,000.
Again, it would be better to consider the Realtors' and others' ideas as part of comprehensive tax reform, with the goal of fairness and adequate funding for schools, city services, and debt repayment. Extreme care must be taken in any alteration of the abatement program, which offsets the fourth-highest construction costs among U.S. cities
Source: Philly.com
No comments:
Post a Comment