A City Council committee last week unanimously approved a measure that would absolve property owners who lose assessment appeals of interest payments on their 2014 taxes.
Council’s Committee of the Whole also unanimously approved changes in an ordinance that freezes eligible senior citizens’ property taxes. The change makes it easy for them to stay in the program if their taxes go down in 2014 and also automatically signs them up for homestead exemptions in their tax bills.
The administration of Mayor Michael Nutter has no problem with the “senior freeze” bill sponsored by City Councilman Brian O’Neill (R-10th dist.), Finance Director Rob Dubow told the 14 council members who met in committee May 22.
But Dubow unsuccessfully tried to persuade council members to scratch a bill that would not require those who lose appeals of their assessments to pay interest on taxes while seeing those appeals through.
Such a break, Dubow said, would spur “frivolous appeals” by owners who know they will not win those actions.
“It could serve to dramatically increase appeals,” Dubow said, and that would cut into the city’s tax flow.
Not requiring losing appellants to cough up interest on what they didn’t pay while awaiting a decision by the Board of Revision of Taxes amounts to the city giving them interest-free loans, said Budget Director Rebecca Rhynhart. She said giving losing appellants a slide on interest provides an incentive to appeal.
Appealing an assessment, therefore, becomes “the smart thing to do,” she said.
Councilman Mark Squilla (D-1st dist.), the measure’s sponsor, countered that 2014 will be a different year because it will be the first time taxes will be calculated by using new citywide reassessment values. And for that reason, for 2014 and that year alone, taxpayers deserve some slack, Squilla said.
Many property owners will appeal their new assessments because they don’t think they’re accurate, Squilla said.
“We want to make sure we protect our residents,” Squilla said.
Councilmen Bill Greenlee (D-at large) and Curtis Jones Jr. (D-4th dist.) both said 2014 will not be a normal year.
“It’s an outlier as opposed to the norm,” Jones said. Squilla’s bill “lets us err on the side of the taxpayers,” he said.
So far, almost 50,000 property owners have filed for first-level reviews with the Office of Property Assessment, Dubow said. He said there might be thousands of property owners who are not satisfied with OPA review and take their dissatisfaction to the next level by appealing the assessments to the BRT. Some might skip the first-level review process. Last month, Carla Pagan, the BRT’s executive director, told Council that she’s expecting appeals to come within a large range —10,000 to as much as 50,000.
Given that the BRT has a small staff and usually handles no more than a couple thousand appeals per year, all those appeals could take time, which means interest could mount up.
Council members pointed out the Nutter administration has set aside $30 million in the 2014 budget to cover the costs of appeals won by property owners and that some of that money could be used to make up lost cash flow while appeals are pending.
Despite Dobow’s objections, the members present recommended the bill for a council vote. Both measures will go before the full Council for a vote June 6. ••
Reporter John Loftus can be reached at 215-354-3110 or firstname.lastname@example.org