How Nutter’s “Actual Value Initiative” Will Probably Screw You Over

You may have heard talk of Mayor Nutter’s new Actual Value Initiative (AVI), since it pretty much has every Philadelphia homeowner either anxious, or really annoyed. It’s an admittedly complex issue, but here’s what you need to know about it.

Nutter’s proposed policy would reappraise all real estate in Philadelphia to the current-market value, generating an additional $94 million in tax revenue to bolster funding for our FUBAR school district. This would mean higher property taxes for residential homeowners- an increase that would likely trickle down to renters.

As The Inquirer points out, the greater the discrepancy between your home’s current-market value and its assessed market value (the current value used for tax purposes only), the higher your tax increase will be. Although Philadelphia properties are generally undervalued, commercial and industrial properties are appraised closer to their actual worth. So, the AVI could actually drive down taxes on industrial properties, and the vast majority of that $94 million windfall would come from residential home owners.

Alarmingly, current estimates project that approximately $200-300 million in total tax revenue would be transferred from commercial to residential property owners. Council Bill Green is not happy with that figure. So he’s proposed to transfer the tax burden from residential property owners to commercial property owners by increasing the Use and Occupancy Tax (which only affects commercial property owners) by $94 million.

Adding to this mess is City Council’s looming deadline to submit a budget and tax rate by July 1st, even though the new property reassessments AVI demands will not be completed by then.

During a recent City Council meeting, Councilman Mark Squilla proposed a one-year delay in the implementation of AVI. Although he considers the initiative essential, he does not approve of the way in which the Nutter Administration handled the matter. The Tax Fairness Coalition also supports a one-year delay, as it would allow new property reassessments to inform the city’s future policies.

For a glimpse into how Nutter’s AVI could screw affect you, download this Excel sheet and plug in your estimated current-market value and the value listed on the Officer of Property Assessment.

Photos by PWBaker via Flickr

AroundPhilly Staff

When we're not browsing Reddit or preparing TPS reports, the Aroundphilly.com staff likes to bring you freshly-sliced internets for your viewing pleasure. If you have an idea for an article or really awesome photos of Nabi, send us an email at editorial@aycmedia.com.

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  • Guest

    1) Why is it bad that industry pays less in property taxes?  It means more jobs for Philly
    2) The School District isn’t FUBAR, Philadelphia’s poor children if poorly educated parents are FUBAR and the District isn’t good enough to fix them.
    3) Most of us middle class folk have been paying far less than our fair share.  Lots of working class and poor neighborhoods will see a decrease in property taxes and will be quite happy about this.

  • Love1philly

    Interesting perspective.  I think you obfuscate the fact that those residential owners who will see the greatest increase will be those who have not been paying their fair share of taxes (becuase of the low assesed value on their home relative to other homes).  It may be a tough pill to swollow, but the unequal assesment of homes in Philadelphia has meant that many people are underpaying for services they recieve (like police and fire)

  • http://www.facebook.com/people/Chris-Flip/8217830 Chris Flip

    Thanks for the input! 

  • http://www.baywesthomes.com/ Karen

    This is bad for the homeowners and renters, but if the taxes will go to the right projects, I think that’d be okay. The delay might be a nice decision for the council to be able to prepare for a better implementation strategy.

  • Anonymous

    You’re crazy.  I WANT MY TAXES RAISED.  THE CITY CAN’T CONTINUE TO GREAT THINGS AND MAKE IMPROVEMENTS WITHOUT EVERYONE CONTRIBUTING. ALSO, IF YOU RAISE THE PROPERTY TAXES, IT WILL ATTRACT HARD WORKING MIDDLE-CLASS CITIZENS, AND FORCE OUT THE LOWLIVES WHO SHOOT EACHOTHER, GET IN FIGHTS, LITTER, AND MAKE OUR WONDERFUL CITY LOOK TERRIBLE AND AN EMBARASSMENT.   THIS IS GOOD FOR ANYONE WITH A JOB AND FOR ANYONE WHO WORKS AND CARES ABOUT THEIR NEIGHBORHOOD AND THEIR CITY AND NEIGHBORS.  BAD NEWS FOR THE LOWLIVES WHO LIVE OFF THE GOVERNMENT AND SECTION 8 HOUSING, WHICH SHOULD BE BULLDOZED.

  • Anonymous

    You’re crazy.  I WANT MY TAXES RAISED.  THE CITY CAN’T CONTINUE TO GREAT THINGS AND MAKE IMPROVEMENTS WITHOUT EVERYONE CONTRIBUTING. ALSO, IF YOU RAISE THE PROPERTY TAXES, IT WILL ATTRACT HARD WORKING MIDDLE-CLASS CITIZENS, AND FORCE OUT THE LOWLIVES WHO SHOOT EACHOTHER, GET IN FIGHTS, LITTER, AND MAKE OUR WONDERFUL CITY LOOK TERRIBLE AND AN EMBARASSMENT.   THIS IS GOOD FOR ANYONE WITH A JOB AND FOR ANYONE WHO WORKS AND CARES ABOUT THEIR NEIGHBORHOOD AND THEIR CITY AND NEIGHBORS.  BAD NEWS FOR THE LOWLIVES WHO LIVE OFF THE GOVERNMENT AND SECTION 8 HOUSING, WHICH SHOULD BE BULLDOZED.

  • Jessica Dubin

    Homeowners, make sure you apply for the Homestead Exemption to be insulated from DRASTIC increases!! Email me for more information.
    Jessica L. Dubin, ABR
    Prudential Fox & Roach REALTORS
    jessica.dubin@prufoxroach.com

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