By Michael D’Onofrio
PHILADLEPHIA — Mayor Jim Kenney pulled out his veto pen for the first time to nix a handful of City Council bills in the waning hours of 2019, including Council President Darrell Clarke’s companion legislation tied to revisions of the 10-year tax abatement.
Kenney’s refusal to act on six bills last week snookered council members by denying them an opportunity to override him, even though many of the bills passed with more than the 12 votes needed to overcome a veto.
The mayor’s inaction, known as a pocket veto, came at the end of City Council’s four-year term, leaving legislators with no scheduled sessions before a new 17-member council takes over on Monday.
Kenney laid out his case for rejecting each of the bills in a two-page letter to Clarke on Tuesday, saying, “While the below Bills all attempt to address issues of mutual concern, I cannot sign them at this time.”
He said he looked forward to working with the council president and new council members in the new year on those issues.
The killed bills included those that would have required community agreements between neighborhood groups and developers on certain projects; increased tax breaks for homeowners; and changed zoning provisions in parts of the city.
On Tuesday, Clarke said he was “perplexed” and “disappointed” over Kenney’s vetoes, considering “the level of support that was given in this legislative body” for some of the legislation. The Democrat from the 5th District said the vetoes would not negatively affect his relationship with the mayor.
“This is business; it’s not personal,” he said.
Clarke, who won reelection and is widely expected to maintain his leadership position, did not commit to reintroducing any of the legislation during the next council’s term. The first full session is Jan. 23.
“We look forward to the resumption of City Council in January,” Clarke said.
No increase to the homestead exemption
Homeowners were shortchanged a bigger tax break thanks to Kenney.
The mayor vetoed legislation that would have increased the city’s homestead exemption to $50,000 from $45,000 for 220,000 people in the program. The bill would have cut into city and school district revenues by $15.4 million next year.
In his letter, Kenney said increasing the tax break would have a “significant negative impact” on property tax revenues because the administration will not be conducting new property reassessments in the upcoming tax year, creating no budgetary offsets. The Kenney administration decided to forgo new reassessments due to inaccuracies discovered in the data.
“Any future adjustments to the homestead exclusion should be considered as part of the budget process and with the understanding of how the assessment process is changing and improving,” Kenney said.
The bill, which Clarke introduced, received unanimous support from City Council and was tied to reforms of the 10-year property tax abatement council passed in December, which the mayor signed.
Clarke said the legislation was intended to provide tax relief for residents in neighborhoods that have seen their property values and taxes skyrocket due to real estate developers leveraging the 10-year tax abatement to construct new, expensive housing.
“This 10-year tax abatement,” Clarke said, “has created property value increases for residents, through no fault of their own, [who] live in a neighborhood where all of this new construction has driven values up to the point where people are having challenges maintaining ownership of their properties because of taxes.”
New push for community agreements with developers gets the boot
Another of Clarke’s bills that Kenney blocked would have required real estate developers to hatch community benefit agreements (CBA) with neighborhood groups on “high-impact projects” or those that receive “city support” or “financial assistance,” although the agreements would not have been mandatory.
Kenney said the city should neither be involved in CBAs, which are private agreements, nor impose more burdens on developers until the city improved training and standards for Registered Community Organizations (RCO), some of which already secure CBAs from developers on certain projects.
“While they [RCOs] serve an important purpose, we as a government have not done enough to ensure that standards of process and conduct are followed by these organizations,” the mayor said.
Clarke dismissed Kenney’s arguments, saying the city was already involved in the CBA process. Legislators crafted the bill after a series of meetings with stakeholders and members of the Kenney administration last year.
The legislation would have helped protect those neighborhoods that lack sophisticated, professional community organizations, the council president said.
“I think it’s appropriate for the city to be engaged in that process to ensure and require through law that that community has the appropriate opportunity to weigh in in a very meaningful and transparent way,” Clarke said.
No additional wage tax refund
The mayor said he killed a bill to expand an existing tax credit for the city’s wage tax for low-income workers because the program was ineffective, saying “this legislation doubles down on a tax credit that is difficult to administer and accessed by very few taxpayers.”
The bill also would have a “serious budgetary impact,” Kenney said. His administration was reviewing options for grant programs to help low-income residents.
The legislation would have allowed 60,000 households to apply for a wage tax refund. A family of four earning an income of $34,250 would receive about $810 annually.
Additionally, two vetoed bills would have revised certain provisions of the Center City Overlay District and amended certain portions of the Philadelphia Zoning Maps in the First Councilmanic District.
And a final bill would have prohibited vending on Market Street between 33rd and 34th streets near Drexel University, which the university pushed for.
Michael D’Onofrio is a reporter for the Philadelphia Tribune, where this story first appeared.