As the crusade for reform in Philadelphia's politics and government policies continues, the legions of reformers and those defending the status quo are about to face a monster of a problem: the wholesale increase in property taxes. The Board of Revision of Taxes is going to reassess all property throughout 2006 and tax it at 100 percent of its value.

Currently, City Council is working to lower the rate by which they tax real estate. But the fact of the matter is, even with the reduced tax rate, property taxes are going to skyrocket.

But rather than approach the property tax crisis with bold and visionary ideas that will advance Philadelphia's reform movement, members of City Council are treating Philadelphia's gunshot wounds with Acme-brand Band-Aids.

Council needs to address the short-term reassessments and "full valuation" approach of the BRT with a lower mil rate. But they must also shift the burden of taxation from homeowners to speculators and blight owners.

Currently, homeowners carry the property tax burden while speculators pay pennies on the dollar. By reducing the rate by which we tax all structures in Philadelphia and increasing the rate by which we tax the land upon which these structures sit, Philadelphia's middle-class homeowners will see a cut in property taxes without any revenue shortfalls for the city's budget. That's called middle-class tax reform.

This brings me to the second tier of real property tax reform—mending the Tax Abatement Program.

By now, everyone knows what it is. If you build a home from scratch, or convert an office or industrial building into residential units, no real estate taxes are paid (save the small land tax) for 10 years. That's a pretty good deal for someone like me. For a nominal fee, I purchased a small parcel of land from my parents back in 1999 and my wife and I built and designed our own home on it. Modest in price and size, it was well within our budget. It also had no impact on our neighbors' property taxes because many of the neighboring homes were already selling near the $200,000 mark.

But today, most people who apply for the abatements are developers, not middle-class homeowners. These developers use the tax abatement to inflate the price of the homes they build. Homeowners, in turn, pay more for a home than they should. Once the homeowners pay the inflated price and move in, the property tax bills of all their neighbors increase. Everyone pays more except for the developers. And that's how the 10-year tax abatement program became a tax cut for the rich.

Proponents of the tax abatement point to all the other taxes new homeowners pay toward the city's economy. And they are right to do so. Those who own the tax-abated homes are not to blame. Instead, a City Council that lacks the cognitive complexity to properly manage economic growth is at fault. Here's what they should do:

First, offer no abatements to developers who build massive high-rise apartment buildings. If they want the abatement, tell them to help Philadelphia build the only thing that will save it—a permanent middle class of homeowners.

Second, limit the number of times a homeowner can enjoy the tax abatement. It should surprise no one that the author of the 10-year tax abatement bill, City Councilman Frank DiCicco, is planning to move from one tax-abated home to another. This just isn't fair to all those struggling with higher property tax bills. People should be prohibited from dodging property taxes for 30 years by jumping from one tax-abated home to another.

Finally, offer "longevity abatements" to those who have lived in their home for more than 20 years. This will result in permanent tax caps for senior citizens and protect them from rising property taxes brought on by new development.

If City Council fails to act quickly, the very people this city needs the most will be forced to leave. And if enough of their houses are placed on the market, Philadelphia's real estate bubble will finally burst.

Attorney Vern Anastasio is a reform advocate living in Bella Vista. Anastasio ran against Councilman DiCicco in 2003. If you would like to respond to this Slant or submit one of your own (750 words), e-mail duane@citypaper.net.