As budget season approaches, the City Council debate is again heating up over the switch to AVI – the Actual Value Initiative of property tax assessments under which real estate taxes will be based on properties' true market values, rather than on a predefined rate.
After several rounds of contentious negotiations last year, the Mayor Michael Nutter-backed measure didn't make it through Council. Members indicated they would pass the measure this spring after receiving more information about the kind of numbers their constituents would be seeing on their retooled property tax bills.
But today, at least two Council members said they still held reservations about the way the overhaul is moving forward.
City Councilman Mark Squilla thinks that, because the city is treating the switch to the AVI system of property tax assessments as an ongoing process requiring continued day-to-day adjustments, residents should also be eased into the overhaul.
"If AVI is a process, then the implementation of it should be a process," he said.
That's why Squilla introduced a bill at City Council today that would over a period of four years gradually phase in the changes in property taxes residents must pay, should AVI come to pass.
"When speaking to the [Office of Property Assessments], they say most appeals they're getting are for parcels that are over-assessed," Squilla said.
"Therefore, they will be concentrating on correcting properties that are over-assessed this year. They informed us that next year, they will look at all the properties that are undervalued or under-assessed to raise them to what the assessment should be."
He said that, since it will apparently take the OPA years to correct errors or inaccuracies in property assessments, residents shouldn't have to pay their full tax increases – or decreases – all at once, either.
"Since this is going to be an ongoing process for years to come, I believe the fairest way to do it – if Council takes the approach to move forward with AVI – is to implement this over a time period," he said.
Squilla wants "to make sure the people who will be most dramatically affected because of mistakes or under-assessments or over-assessments will not have to pay for one year for what the city has done – or not done – for 10 years."
Councilman Kenyatta Johnson thinks education and transparency are two key components missing from the property tax overhaul. He plans to use his own staff to assist residents of his district, but is encouraging the administration to extend that effort in a bid to help more citizens understand exactly what's going on.
"Throughout this week, my office has been receiving numerous calls from constituents about AVI," Johnson said. "An alarmingly high number of these constituents have received assessments which seem wildly inaccurate."
He said a Graduate Hospital resident recently led him on a tour to illustrate some of the inconsistencies.
According to Johnson, one 860-square-foot, two-story non-rehabbed house was assessed at $455,000 by the OPA. "This tiny, two-story house is worth more than a huge, 2,500-square-foot three-story house, currently assessed at $280,000 but listed on the market for $625,000," he said.
"Although I have a masters degree from the University of Pennsylvania in government administration and public finance, I'm not an expert property appraiser," he continued. "But something about his process seems fairly inaccurate. I have been receiving these types of calls all week, so I am calling on the administration to explain why we are seeing the disparities."
Johnson said he is forming an AVI response team to make sure his constituents in the 2nd Councilmanic District understand the process. Accounting students from Temple University and the University of Pennsylvania will ensure residents apply for all the relief measures available to them, according to Johnson.
"This is an issue we will continue to aggressively address as we go throughout the process of addressing AVI and making sure the process is fair and accurate," he said.