Nutter anticipates $90M more in taxes for school district

Posted: March 08, 2012

UNDER Mayor Nutter's budget for next fiscal year, a plan he's set to unveil today, he expects to collect an additional $90 million in property taxes from residents.

Just don't call this a tax hike.

The city's switch to a property-tax system based on market values will effectively make permanent the revenue increases from two tax boosts that had been billed as temporary.

The approximately $90 million amounts to a roughly 8 percent increase in property-tax intake - all of which would go to the school district.

But Nutter's finance director, Rob Dubow, said yesterday that the revenue increase is simply a reflection of the rise in property values, and not the backdoor tax hike decried by critics.

"Values have gone up and we're capturing that value," Dubow said.

The city's current assessments are considered wildly inaccurate and outdated.

No citywide reassessment has been done since 2004. The new system means that some neighborhoods likely will experience a jump in tax bills, and others a reduction.

Until new assessments are sent to property owners in October, it won't be clear who wins and who loses.

Because the assessments won't be ready until the fall, Nutter is asking Council to pass legislation that states how much revenue the city needs.

When the property values are finished, the administration will set a millage rate that meets the revenue goal.

Dubow said the taxes collected that would go to the city would be roughly $458 million next year, the same amount as in the current year.

But the taxes that go to the school district are expected to come in at $673 million, about $90 million more.

City Councilman Mark Squilla, who represents the 1st District in South Philadelphia, said he was concerned about how residents would perceive the numbers.

"I think the people in my district are going to look at it as a tax increase," Squilla said. "It's an increase in revenues; it's an increase in taxes."

Squilla expressed concern about residents with limited means who live in neighborhoods that have gentrified.

Dubow said the city hopes to have a three-year phase-in of the changes, to ease the impact.

And the city is seeking state authorization for homestead-exemption legislation that would lower all residents' assessments by $15,000. Low-income seniors also could apply for relief.

For monhs, assessors from the city's Office of Property Assessment have been surveying the city's 577,000 properties.

Dubow said they expected to have preliminary figures completed in June and then the city will spend several months checking the numbers.

The property office was created after voters in 2010 approved a plan to abolish the Board of Revision of Taxes, which came under fire in the Inquirer for a history of political patronage and inaccurate assessments.

The BRT panel remains in place to hear appeals.


Contact Catherine Lucey at 215-854-4172 or luceyc@ phillynews.com, or follow on Twitter @PhillyClout. Read her blog, "PhillyClout" at phillyclout. com.

 

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