O’Neill has bad feeling about ‘temporary’ tax

Coun­cil­man Bri­an O’Neill lost one big City Hall battle last month when his fel­low Coun­cil mem­bers passed a second real-es­tate tax in­crease in as many years at the ur­ging of May­or Mi­chael Nut­ter.

Dur­ing last week’s meet­ing of the Fox Chase Homeown­ers As­so­ci­ation and Fox Chase Town Watch, O’Neill (R-10th dist.) warned that an­oth­er prop­erty-tax hike may be pro­posed next year when the Board of Re­vi­sion of Taxes im­ple­ments its long-planned Full Value Pro­ject.

Not co­in­cid­ent­ally, O’Neill noted, this year’s may­or­al and Coun­cil elec­tions will be over by then.

“It could be three straight years of real-es­tate tax in­creases,” O’Neill said. “It’s go­ing to be up to homeown­ers to really lash out about it.”

Faced with a pro­jec­ted nine-fig­ure op­er­at­ing de­fi­cit dur­ing the fisc­al 2011 budget ne­go­ti­ations in May 2010, Nut­ter and Coun­cil im­posed what they labeled a “tem­por­ary” 9.99-per­cent prop­erty-tax in­crease. The hike was in­ten­ded to pump an ad­di­tion­al $86 mil­lion in­to the budget each year for two years (fisc­al 2011 and 2012).

But dur­ing the re­cently com­pleted fisc­al 2012 budget pro­cess, Coun­cil and Nut­ter raised prop­erty taxes again, this time to fund the city’s fin­an­cially strapped pub­lic school dis­trict. The 3.85-per­cent hike also is sup­posed to be a tem­por­ary one, last­ing just one year and gen­er­at­ing a pro­jec­ted $37 mil­lion for pub­lic schools.

O’Neill was among a hand­ful of Coun­cil mem­bers to op­pose both tax in­creases. Now, he says, some in city gov­ern­ment are look­ing to keep the new rev­en­ue flow­ing by ma­nip­u­lat­ing the Full Value Pro­ject.

Now, the may­or and some Coun­cil mem­bers are say­ing the city can­not lose the $86 mil­lion and the $37 mil­lion, O’Neill told the Fox Chase groups.

The Full Value Pro­ject is an ef­fort by the Board of Re­vi­sion of Taxes to sim­pli­fy and stand­ard­ize the way prop­er­ties are as­sessed and taxed.

Un­der the cur­rent sys­tem, prop­erty own­ers pay taxes on only a frac­tion of the ac­tu­al mar­ket val­ues of their homes or busi­nesses. The stand­ard prop­erty-tax rate — as set by Coun­cil — is then ap­plied to the mod­i­fied as­sess­ments to de­term­ine the tax li­ab­il­it­ies for each prop­erty.

Un­der the new sys­tem, prop­erty as­sess­ments will be high­er across the board (equal to the full mar­ket value), so the stand­ard tax rate will be lowered. Only Coun­cil has the power to change the rate.

For years, BRT of­fi­cials and ad­voc­ates for the Full Value Pro­ject have said that the pro­ject should be de­signed as “rev­en­ue neut­ral,” mean­ing that the total rev­en­ue gen­er­ated for the city by prop­erty taxes should re­main the same un­der the new sys­tem (al­though many in­di­vidu­al prop­erty own­ers will end up pay­ing more while oth­ers will pay less).

But ac­cord­ing to O’Neill, some in city gov­ern­ment want the new tax rate to be set based on the new rev­en­ue levels, thereby mak­ing the re­cently ap­proved “tem­por­ary” tax hikes per­man­ent ones.

O’Neill did not spe­cify at the Fox Chase meet­ing which Coun­cil mem­bers have pro­posed the con­tro­ver­sial scen­ario.

“If (the Full Value Pro­ject) isn’t rev­en­ue neut­ral, then it be­comes a back-door tax in­crease, and nobody voted for a back-door tax in­crease,” O’Neill said.

Iron­ic­ally, ac­cord­ing to the coun­cil­man, the two tem­por­ary tax in­creases passed by Coun­cil and ap­proved by Nut­ter in the last two budget cycles were the first two prop­erty-tax hikes of any kind in the city since 1991. And they have come in the midst of a deep eco­nom­ic re­ces­sion, when homeown­ers and busi­ness op­er­at­ors can least af­ford to pay the ex­tra cash.

• In oth­er news, fresh­man state Rep. Kev­in Boyle told Fox Chase res­id­ents about sev­er­al is­sues he’s been work­ing on since be­ing sworn in­to of­fice in Janu­ary.

Boyle (D-172nd) met with the ad­min­is­tra­tion of the Fox Chase Can­cer Cen­ter as a fol­low-up to the hos­pit­al’s un­suc­cess­ful cam­pus-ex­pan­sion ef­fort.

The hos­pit­al failed to win ap­prov­al for con­struc­tion in neigh­bor­ing Burholme Park, Boyle said, but it re­mains a valu­able as­set to the com­munity with the 2,400 jobs it provides. Boyle was en­cour­aged by re­cent news re­ports that the hos­pit­al is dis­cuss­ing a pos­sible af­fil­i­ation with the Temple Uni­versity Health Sys­tem.

In Har­ris­burg, Boyle wants to start crack­ing down on large-scale ab­sent­ee prop­erty own­ers throughout the city. He is draft­ing a bill that, if passed in­to law, would re­quire all land­lords with mul­tiple rent­al prop­er­ties to list a man­ager on their prop­erty re­cords.

Un­der the cur­rent sys­tem, many large-scale land­lords list only a cor­por­a­tion with an out-of-state post of­fice box as the only con­tact. This makes it tough for loc­al au­thor­it­ies to en­force code vi­ol­a­tions and is­sue fines.

In an un­re­lated is­sue, Boyle re­por­ted that he voted against the state’s re­cently passed fisc­al 2012 op­er­at­ing budget for two reas­ons: He was against severe cuts to high­er-edu­ca­tion fund­ing, and he op­posed the ab­sence of a sev­er­ance tax on nat­ur­al-gas com­pan­ies that drill in Pennsylvania’s shale re­gions.

• The next meet­ing of the Fox Chase Homeown­ers As­so­ci­ation and Fox Chase Town Watch will be at 7:30 p.m. Wed­nes­day, Sept. 14, at Amer­ic­an Le­gion Post 366, 7976 Ox­ford Ave. ••

Re­port­er Wil­li­am Kenny can be reached at 215-354-3031 or bkenny@bsmphilly.com

You can reach at wkenny@bsmphilly.com.

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