City Council negotiations on proposed construction tax are now down to the wire

Kenney must make a decision by the time council convenes, or it would become law.

Pat Loeb
September 12, 2018 - 12:38 pm
City Hall Chief of Staff Jim Engler

Pat Loeb/KYW Newsradio


PHILADELPHIA (KYW Newsradio) — City Council returns to work Thursday after a summer recess.

Although City Council passed a bill imposing a 1 percent tax on new construction to pay for affordable housing back in June, they are still negotiating with Mayor Jim Kenney, who opposes it. He must make a decision by the time council convenes, or it would become law.

Council passed the tax at its final session in June, and the mayor has been looking all summer for ways to generate revenue without the tax. His chief of staff Jim Engler said the administration landed on a plan to appropriate the tax money that comes in from properties that received the 10-year tax abatement, in the first year after they come off the abatement.

"This is all revenue that is recurring and reliable and that we actually have projected in our five-year plan," Engler said.

He said it would raise $52 million over five years — a sum that Councilwoman Maria Quiñones-Sanchez, who sponsored the affordable housing and construction tax bill, says is too low.

"While we believe this is a good start, anything less than, for me, $25 million a year is really not being an honest broker around the need," Quiñones-Sanchez said.

She says she's open to redoing the bill.

Councilwoman Cindy Bass said she'll introduce a bill to get rid of the 10-year tax abatement because "we desperately need the funding to help our schools."

"The abatements were a great thing. I'm not going to say that they weren't. They did a lot of good for Philadelphia. The question now is about fairness," she added. 

Bass dismisses numerous analyses that say abruptly ending the abatements could damage the city's economy. The proposal is bound to get intense scrutiny.

"No one is going to stop building in Center City because we take away those abatements," she said.

The mayor has to make a decision by the time Thursday's council session starts.