O'Neill's prepping to fight $$$ proposals


City Coun­cil­man Bri­an O’Neill doesn’t need to rally pub­lic opin­ion in op­pos­i­tion to May­or Mi­chael Nut­ter’s pro­posed prop­erty tax in­creases.

Nor does O’Neill — a Re­pub­lic­an from the Far North­east and Coun­cil’s minor­ity-party lead­er — have to con­vince his con­stitu­ents that the Phil­adelphia Wa­ter De­part­ment’s planned rate hikes will hit them where it hurts most — in their wal­lets.

Yet, when push comes to shove over both con­tro­ver­sial pro­pos­als in the com­ing weeks dur­ing Coun­cil’s de­lib­er­ate and of­ten-te­di­ous budget­ary pro­cess, it could only be­ne­fit O’Neill and oth­er fisc­al con­ser­vat­ives to have the po­ten­tial for pub­lic out­cry in their ar­sen­al.

O’Neill laid the found­a­tion for that sup­port by re­port­ing the latest news about both top­ics at two com­munity meet­ings in the North­east last week.

He spoke to the Somer­ton Civic As­so­ci­ation on March 13, then the Fox Chase Homeown­ers As­so­ci­ation and Town Watch on March 14. Folks at both events gen­er­ally agreed that they don’t want to pay more in­to a mu­ni­cip­al gov­ern­ment that can’t seem to man­age the money it already gets.

“What the may­or is pro­pos­ing is not ‘rev­en­ue neut­ral,’” O’Neill told the Somer­ton group, quot­ing a term of­ten used by ad­voc­ates to de­scribe the long-awaited “full value” or “ac­tu­al value” prop­erty tax sys­tem.

Un­der the city’s cur­rent tax struc­ture, own­ers do not pay taxes on the full mar­ket value of their prop­er­ties. Rather, they are taxed on a frac­tion of the full or ac­tu­al value. So, the tax rate doesn’t change from par­cel to par­cel, but the stand­ard­ized rate is ap­plied in­con­sist­ently. Some prop­er­ties are as­sessed at one-quarter of their true mar­ket value, while oth­ers are as­sessed at three-quar­ters, O’Neill said.

The pur­pose of the full value ini­ti­at­ive is to level the play­ing field, ac­cord­ing to the coun­cil­man, who sup­ports the idea.

In ad­di­tion, he said, un­der the ori­gin­al in­tent of the pro­pos­al, the city is not sup­posed to reap a wind­fall of rev­en­ue from the change. Coun­cil is sup­posed to cre­ate a new, lower tax rate so that the rev­en­ue gen­er­ated un­der the new sys­tem will equal that gen­er­ated by the old sys­tem.

Yet, Nut­ter wants to set the new tax rate so that the city will col­lect close to 25 per­cent more from prop­erty own­ers as a whole, O’Neill told the Fox Chase group.

Prop­erty taxes gen­er­ate about $1 bil­lion a year, with the School Dis­trict of Phil­adelphia get­ting about $600 mil­lion and mu­ni­cip­al gov­ern­ment about $400 mil­lion, he said. Those fig­ures do not in­clude two “tem­por­ary” tax in­creases sought by the may­or and passed by Coun­cil in pre­vi­ous years.

In 2010, there was a two-year, 9.9 per­cent hike, fol­lowed last year by a one-year, 3.9 per­cent hike. Both are sched­uled to ex­pire on June 30 at the end of the 2012 fisc­al year.

But now, O’Neill said, Nut­ter wants es­sen­tially to keep both tax in­creases in place in­def­in­itely to fur­ther fund the city’s ail­ing pub­lic school sys­tem. Also, the may­or wants to col­lect an ad­di­tion­al $94 mil­lion for mu­ni­cip­al cof­fers.

O’Neill said he and oth­er Coun­cil mem­bers met privately with Nut­ter on March 14 to dis­cuss the pro­posed prop­erty tax scheme.

O’Neill ar­gues that the may­or is try­ing to ob­scure what would amount to a tax in­crease with­in the con­text of the change to the full-value sys­tem. The coun­cil­man thinks that any rate in­creases should be con­sidered in­de­pend­ently.

“I have al­ways said I will nev­er sup­port [the full-value sys­tem] un­less it’s rev­en­ue neut­ral,” O’Neill said in Somer­ton.

At both meet­ings, res­id­ents asked the coun­cil­man about the status of the 10-year prop­erty tax abate­ment on new res­id­en­tial con­struc­tion. O’Neill re­por­ted that the pro­gram is likely to con­tin­ue in­def­in­itely, des­pite his op­pos­i­tion, be­cause most Coun­cil mem­bers sup­port it.

Sim­il­arly, res­id­ents at both meet­ings com­plained that the city should do a bet­ter job col­lect­ing de­lin­quent real es­tate taxes be­fore rais­ing rates on those who stay up-to-date on their taxes.

At the Somer­ton meet­ing, Dan Lod­ise, chief of staff to state Rep. Brendan Boyle (D-170th dist.), re­por­ted that Boyle has in­tro­duced state le­gis­la­tion that could man­date that the full-value pro­gram be rev­en­ue neut­ral. If passed, the state law would su­per­sede a re­as­sess­ment or­din­ance passed by Coun­cil, Lod­ise said.

In an un­re­lated city-gov­ern­ment money move, the Wa­ter De­part­ment re­cently an­nounced plans to raise ser­vice rates by 6 per­cent each year for four con­sec­ut­ive years, O’Neill said. If com­poun­ded, that would amount to a total in­crease of more than 26 per­cent by year four.

In an eco­nomy when many are out of work and oth­ers aren’t get­ting cost-of-liv­ing raises, the pro­posed rate in­creases are out of line, O’Neill ar­gued.

“Nobody is get­ting a six-per­cent raise any­where and nobody is get­ting six per­cent on their money any­where,” he said.

The Wa­ter De­part­ment’s jus­ti­fic­a­tion is even more dis­turb­ing to the coun­cil­man. The de­part­ment claims that people in Phil­adelphia — its cus­tom­ers — have re­spon­ded so well to the de­part­ment’s wa­ter con­ser­va­tion ini­ti­at­ives that the de­part­ment is los­ing rev­en­ue. It needs to raise rates to com­pensate.

O’Neill ar­gues that the de­part­ment should have ex­pec­ted and planned for re­duced in­come, con­sid­er­ing its con­ser­va­tion pro­grams. He thinks res­id­ents should fight the rate hikes.

“There’s work to be done here. (Wa­ter of­fi­cials) have to feel the pres­sure about this,” O’Neill said. “Maybe you won’t get no in­crease, but maybe you’ll get a more man­age­able, reas­on­able in­crease.” ••


You can reach at wkenny@bsmphilly.com.

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