Group condemns Actual Value Initiative brinkmanship, seeks separate solutions to property reassessment and school funding

PHILADELPHIA, May 18, 2012 – State Senator Larry Farnese was joined by Pennsylvania Senators and Representatives from Philadelphia, members of Philadelphia’s City Council and community activists to jointly call upon Mayor Nutter to implement a fair property assessment program and to explore better funding alternatives for the School District of Philadelphia.

“The Nutter Administration’s implementation of the Actual Value Initiative, or AVI, is a back-door tax increase.  It’s also not the only way to help the financially struggling School District of Philadelphia,” said Senator Farnese.  “Today, we’ve come together to call for joint action in the State Capital and in City Hall.  We need to keep AVI truly revenue-neutral, or delay its implementation for one year until the reassessment is actually completed.  We also want to explore other taxing alternatives to fund our schools.  Enough is enough.  The taxpayers of Philadelphia deserve to be treated with fairness and honesty.”

The Actual Value Initiative (AVI), which will affect more than 577,000 Philadelphia property owners, was originally intended to level the playing field by creating fairness for all property owners in addition to ensuring that people in similar houses and neighborhoods pay similar property taxes. Unfortunately, it has become the Nutter Administration’s financial solution for the School District of Philadelphia’s $94 million budget deficit, affecting thousands of homeowners.

AVI and Legislative Action

The Pennsylvania Senate has already unanimously approved legislation that would authorize a homestead exemption in Philadelphia (Senate Bill 1301), and would give the mayor all nine board appointments to a newly-reconstituted Board of Revision of Taxes (Senate Bill 1302).


Senator Farnese also plans to introduce legislation that would allow City Council – if it chooses – to delay AVI for one year, or to fund schools through other taxing alternatives.  In the near future, the Senate will also consider additional legislation proposed by Sen. Farnese to bring Philadelphia’s assessor certification standards in line with the rest of the state.

Why the Philadelphia System is Different

The City collected approximately $1.047 billion in property taxes in the last tax year ($458 million for the City’s general fund and $589 million for the School District).  If the reassessment was truly revenue neutral, then the City’s total property tax collections after reassessment would be approximately $1.047 billion.  In an honest, revenue-neutral process, a city would determine the total property values and then adjust the millage rate to ensure that the total revenue did not result in a windfall.

Sadly, that is not happening in Philadelphia.  Instead, the Nutter Administration has the final number they want and they are driving the process towards it. The need for revenue-neutrality is even more important now, since the City intends to forge ahead with AVI in this year’s budget, before property reassessment values are even know.

The idea that property reassessments should not be used as a stealth tax increase is not a new one.  For many years, school boards and local governments in every other Pennsylvania county have been subject to “anti-windfall” legislation when a city conducts a property reassessment.  These laws require taxing authorities to lower tax rates to make sure tax bills do not rise above a small percentage.  If additional revenue is needed, the school boards or county governments can debate the need for, and then vote on, a tax increase.

Sen. Larry Farnese was elected to the Senate in 2008 to represent Pennsylvania’s First Senatorial District which contains some of Philadelphia’s most unique and vibrant neighborhoods from Port Richmond on the Delaware River to Fairmount Park on the Schuylkill River and South Philadelphia, Center City, the Navy Yard, Philadelphia International Airport.  Senator Farnese serves as the Democratic Chair of the Communications and Technology Committee.  He is also a member of the Appropriations Committee, Banking and Insurance Committee, the Law and Justice Committee and the Judiciary Committee.  His District Office is located at 1802 S. Broad Street in Philadelphia, PA (ph: 215-952-3121) and his Harrisburg Office is located at 543 Main Capitol in Harrisburg, PA (ph: 717-787-5662).  More information about the Senator and his initiatives is available at