May 15, 2008 Issue                                       

©2007 The Chestnut Hill Local

Philly Forward to sue city over unfair property tax
by Kristin Pazulski

In an attempt to force the city to properly reassess its real estate taxes, the nonprofit watchdog, Philadelphia Forward, is planning to sue the city within the next few weeks.

For years Philadelphia Forward has been advocating for the reassessment of the city’s real estate taxes, which the organization claims — and research has proven — are very unfair.

Many city properties have not been reassessed by the Board of Revision of Taxes in years, so their taxed values are much higher or much lower, depending on the location, than they should be — meaning that some homeowners pay too much in taxes while others pay not nearly enough.

For example, Philadelphia Forward lists four homes on its Web site. Each house was sold in 2007 for $250,000, yet because of the lack of proper assessment in the city, the homes’ billed taxes for this year range from $169 to $3,305 — a difference of more than $3,000 for homes that have the same market value.

Last May, when the Local did a story on the reassessment before the election, which had a ballot question about the reassessment, Barry Mescolotto, BRT’s assistant administrator, said a contributing factor to the lack of assessment is the department’s preparation for Full Valuation. This new system of taxing will steer away from determining taxable value for a property with a percent of a percent of its market value, and will use a more easily understandable system based on the full market value of a property.

For this week’s story, Mescolotto declined comment and directed the Local to speak with Kevin Feeley of Bellevue Communications, the BRT’s spokesperson.

But in May, Mescolotto said with the high levels of development, community improvement and the preparation for the new system, that there has not been enough staff to keep up with the rising values. At that point, about a year ago, the new software had been installed and was able to more accurately assess properties by using aerial photos, and Mescolotto was hoping to have full valuation systemin place for tax bills sent out this August.

But as of this month, Feeley said a date has not been set for full valuation to be used and the reassessment complete.

Brett Mandel, Philadelphia Forward’s director, said that regarding real estate tax reassessment, the city is in a stalemate.

The BRT has the software, but is waiting for the city administration — city council and the mayor’s office — to instate “buffers,” or policies that will help residents whose real estate tax bills skyrocket — pay those higher bills. Some proposed buffers are to allow deferment, or tax exemptions for long-time homeowners.

But while the BRT is waiting for the mayor and council to make a move, says Mandel, the city is waiting for the BRT to present reassessed numbers so it can properly set a millage rate and policies to offset the losses that the city could incur. When the properties are reassessed and policies are put in place to help those who cannot pay their full tax bill, the city will need to adjust the rate so that it still gets enough revenue to fit its budget line.

While some homes have been reassessed, real estate taxes need to be fair all over the city. Mandel hopes the suit will inspire further conversation between these two groups.

But Feeley, BRT’s spokesperson, said Mandel’s assessment of the situation as a stalemate is inaccurate. He said the BRT has been testing the system and talk has passed between the BRT and city administration about the policies and reassessment and that the two were “working cooperatively.” But Feeley did not have specifics as to how far along the work was and when policies could be introduced.

As for the suit, Feeley said, “It’s hard to react to a lawsuit that has not been filed yet.”

Mandel said he understands that this process would not be an “overnight whack” and that the buffer policies are as important as the reassessment, but the two parties — the BRT and the city administration — need to start talking now, he said, because the taxes are not only unfair, but the unbalance of the system is actually illegal under the state constitution.

Mandel said, as he put in his public e-newsletter, that the organization expects to sue within the next few weeks. Whether it makes the BRT and city administration move faster in the reassessment remains to be seen.

Contact staff writer Kristin Pazulski at 215-248-8819 or Kristin@chestnuthilllocal.com.