What's happening today in Philadelphia City Council: Wednesday, May 30
The Philadelphia Home Rule Charter requires City Council to approve the annual operating budget for the upcoming fiscal year – which starts on July 1 – by tomorrow, May 31.
But don’t bet the ranch on it.
Council is still deeply enmeshed in the most controversial issue of this budget season: Whether or not to sign onto Mayor Nutter’s plan to implement a new property assessment system that will yield $94 million in revenues for the city’s public schools.
Since the outcome of the debate impacts everyone who owns property in Philadelphia, the Committee of Seventy urges you to pay careful attention to the ongoing discussions in City Council.
Council hearings are aired live on Channel 64, which is the city’s government access channel. If you have a computer or can get to one, you can hear them here
Or you can go to Room 400 in City Hall and listen in person. You can even speak out (for three minutes) on any of the bills being considered that day. Read about how to participate here
Seventy’s usual “Weekly Update on City Council” is being replaced this week by a “Daily Update” so that we can give you even more detail about what’s happening. Look for another “Daily Update” on tomorrow’s Council hearings!
Public Hearing on Property Taxes and the Philly Schools
Wednesday, May 30 at 1:00 PM, Room 400, City Hall
Here is a brief summary of the proposed bills that will be discussed during Council’s public hearing today. You can read the actual bills by clicking onto the link following the summaries. 1. Mayor Nutter’s Proposal:
The mayor’s proposal actually has two distinct parts: First is the implementation of a complete overhaul of the city’s system for assessing the value of all residential and commercial and industrial properties. No one disputes that the city’s current assessment system is a complete mess, plagued by inconsistencies (wildly different values for similar houses on the same block) and special treatment for city bigwigs. But, after approving two consecutive years of property tax hikes, City Council is reluctant to approve a budget that counts on revenues from property tax increases that are expected to be imposed on some property owners after the reassessments are completed – especially when their approval must happen before those reassessments are completed in the fall.
Part two of the mayor’s proposal is whether to give $94 million of the anticipated revenues from property taxes following the reassessments to the Philadelphia School District. Some Council are balking at the idea of giving funds to the schools at all – at least not without guarantees of more accountability, transparency and better academic results. Bill No. 120175
At-Large Councilman Bill Green has introduced several amendments to Bill No. 120175. You can read about them here
.2. Delay Implementation of Property Reassessments for One Year:
Newly elected First District Councilman Mark Squilla says Council shouldn’t be forced to approve the mayor’s proposal before the outcome of the reassessments is released in the fall. Squilla’s proposal seeks to delay implementation of the new reassessment system for one year. Bill No. 120230
.3. Ease the Burdens on Property Owners with Post-Reassessment Tax Increases
A. Reduce Interest Rates on Property Tax Payment Deferrals
The city’s Revenue Department is now permitted to grant payment deferrals when property taxes increase by 15% or when the owner’s personal circumstances make paying an increase difficult. However, there is a 6% interest on the deferred payments. The proposed bill would reduce the interest rate to the rate of the yield on one-year U.S. Treasury bonds or to 4%, whichever is lower. Bill No. 120338
B. Tax Credit for Low Income Taxpayers
This bill proposes a tax credit for unmarried property owners with income not exceeding $8,750 and for married property owners with joint incomes not exceeding $15,250. (“Income” does not include retirement benefits or Social Security income.) The proposed bill does not specify the value of the tax credit, which would vary based on income, and requires state legislation in order to take effect. Bill No. 120339
C. Tax Exemptions for Longtime Property Owners
This proposed bill would authorize tax exemptions for longtime owner-occupants of homes in areas whose property values are likely to soar (after the reassessments are completed). To qualify, the owner-occupants must have lived in their homes for at least 10 years (or 5 years if they acquired the property with assistance from the government or a non-profit). The bill does not specify the value of the exemption. Although state law already allows the city to authorize exemptions, state action is required to provide a means-based test for eligibility for the exemption. Bill No. 120340
D. Installment Payments for Taxes
The city’s Revenue Department is now permitted to accept payment of property taxes in four equal installments, but with substantial interest if the payments run past the end of March. This proposed bill would remove any interest charges if the taxes are paid in full by the end of the year in which they are due. Bill No. 1203414. Funding the Schools through the Use and Occupancy Tax:
This proposed bill addresses how to calculate the Use and Occupancy Tax – which is paid only by commercial and industrial property owners/tenants on property in use. Bill No. 120172
An amendment to Bill No. 120173 introduced by Councilman Bill Green would give $94 million to the public schools by raising the Use and Occupancy Tax (instead of through property taxes). Green says the overhauled property reassessment system will decrease the property taxes on commercial and industrial properties (so their owners won’t be stung by his proposal). You can read about the amendment here
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