City budget lacks traction in Council

The ongoing tax reform saga trudged on in City Council on Thursday. Members argued about Mayor Michael Nutter administration’s proposed shift to the Actual Value Initiative that would generate an estimated $94 million in additional revenue, currently earmarked for the School District, by basing real estate taxes on properties’ true market rate rather than on a pre-determined ratio.

Council President Darrell Clarke introduced a package of bills that would net funds through alternative means in the case that AVI is unable to gain the nine votes necessary to pass. The move came amid divisions among Council members over whether or not to delay the tax proposal until they gain more information about its technicalities.

Further complicating the matter is uncertainty surrounding two measures in Harrisburg that must pass for the city to implement AVI. The legislation would provide relief to those whose properties are assessed above a certain dollar amount and to change the tax rate.

“The bills may possibly raise revenue by increasing the Use and Occupancy Tax within the School District,” Clarke said of his propositions, noting each had two versions: one to be employed in the case that AVI becomes a reality and one if it does not. “The other allows that increased real estate taxes would go to the School District.”

Clarke said his legislation would generate closer to $85 million. “It’s rare individuals get what they ask for,” he said when asked about the difference between that number and the amount the School District was hoping to see.

Clarke said no date for a vote is set yet. Historically, Council approved budgets by May 31, but the strict deadline is June 30, the end of the fiscal year.

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