Philly Council Delaying AVI Reassessment for a Year

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I probably wouldn’t have voted to delay AVI because, you know, the schools are in huge trouble, but there were a few good reasons for council members to do so.

Let’s start off with what was not a good reason to delay it.

Richard Snowden and James Foster’s arguments against AVI are mostly bullshit. They’re talking about this like everybody’s taxes are going up. It’s not true. Some people’s prop taxes are going down, and others are going up.

It’s important to understand that the reason this is happening is because of market forces, not the government’s decision to tax certain neighborhoods more than others. The taxes are going up in certain neighborhoods, because the market values are going up in those neighborhoods, aka more people want to live there. What the higher market values tell us is that if some people decide to leave those neighborhoods because of the higher taxes, it’s no biggie because other people will be happy to buy those properties. Value is just how much cash other people are willing to pay you for your property.

The fact is that some neighborhoods are undertaxed right now because other neighborhoods are being overtaxed. The people in the undertaxed neighborhoods obviously like it that way, but there’s no good reason for city council to like it that way. What’s more, city council should never be in a position to decide what market values to use in the first place. That’s the whole virtue of AVI – the values the government uses are just selling prices. There’s no room for political discretion, other than setting the millage rate.

The good reason to delay AVI is that a reassessment is currently being conducted, so nobody actually knows what the values are yet. Without knowing the values, how do you set the millage rate with any accuracy? Mess that up, and public services could end up seriously underfunded.

And as I’ve been saying here on the blog, reassessment really should be revenue neutral. It’s pretty clear the Nutter administration was starting with the revenue number they wanted, and then they were going to set the millage rate to hit that number.

I don’t know that I really have a substantive problem with that, since what’s most important to me is adequate funding for core public services,  but it’s just horrible politics. With reassessment, it’s really important that people believe the valuation process is fair, and coupling it with a tax increase just makes it seem like the city’s trying to pull one over on people. You need to give people some time to digest the new values and understand how much their prop tax bills are going to change in absolute terms.

This is important because AVI is actually a really good policy idea on the merits, and I think you don’t want to create any political space for people to demagogue the entire concept.

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