Butkovitz on taxes:
Where’s the emergency?

By Tom Waring
Times Staff Writer

As city controller, Alan Butkovitz knows Philadelphia has problems.
Since taking office in 2006, he has addressed issues such as the slow response time of fire rescue squads, uncollected city water bills and taxes and the dangerous practice of locking emergency school exits.
Crime, high car insurance rates and an onerous city wage tax, he said, are factors that some people cite when moving out of Philadelphia.
All is not wrong in the big city, according to the controller. Far from it.
The 10-year tax abatements on new construction have spurred development, especially in Center City and adjacent neighborhoods.
And despite a big spike in property values in the last few years, real estate taxes in Philadelphia remain relatively low.
Citing those low property taxes, Butkovitz says he doesn’t understand why some folks want to scrap the system that the Board of Revision of Taxes uses to calculate the rates on the city’s 550,000 residences, businesses and other properties.
There are individuals who think it would be fairer to use the actual value of a property as the base for setting tax rates. Right now, the average city home is assessed at 32 percent of its potential sale value, and a mathematical formula determines annual property taxes.
The result? According to Butkovitz, most Philadelphians are happy with the system. He cites the low percentage of property owners who appealed their assessments last year. He wants to leave well enough alone, but others disagree.
"In typical Philadelphia fashion, people are saying, ‘Why don’t we kill the goose that laid the golden egg,’ " he said in a visit to the Times office on Friday.
Butkovitz, a former state representative from Castor Gardens, was joined at last week’s discussion by Harvey Rice, first deputy city controller.
The controller faults Brett Mandel for leading the charge for a revamped system. Mandel worked for the controller’s office under Butkovitz’s predecessor, Jonathan Saidel, and now heads Philadelphia Forward, which tackles issues such as taxation, budgeting, ethics and governmental integrity.
Mandel, a Northeast native, plans to sue the Board of Revision of Taxes in Common Pleas Court, arguing that the city’s real estate tax policy is unfair and illegal because there is no uniformity in taxation.
Butkovitz rejects the uniformity in taxation argument, referencing the aforementioned tax abatement and pointing out that businesses get sweet deals to move to the city. He thinks a change in policy would result in a "hidden tax" for many property owners and a potential windfall for the city. He labels it a form of "governmental malpractice."
"The changes in taxes would be ridiculous," he said. "It will create tremendous panic."
Higher property taxes would result in lower resale values, Butkovitz said, and lead to "panic selling."
The controller, who expects to seek re-election next year but does not rule out a run for district attorney, sees no need for an overhaul and no groundswell of support for the changes offered by Mandel, who outlined his position in a visit with the Times last month.
"Where’s the emergency?" Butkovitz asked. "Only one person in the whole city says there’s an emergency. He’s a one-man band." ••
Reporter Tom Waring can be reached at 215-354-3034 or twaring@phillynews.com