Thursday, September 3, 2015

Nutter administration releases budget proposal details

As previously reported, Nutter is proposing a 1.32 percent property-tax rate to go along with the first year of his Actual Value Initiative. He's asking for a decrease in the homestead exemption (which deducts money from property assessments for owner-occupied residences) from $30,000 to $15,000.

Nutter administration releases budget proposal details

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Mayor Nutter with Rob Dubow, city finance director, behind him. (Jessica Griffin / Staff Photographer)
Mayor Nutter with Rob Dubow, city finance director, behind him. (Jessica Griffin / Staff Photographer)

The Nutter administration shared its proposed budget with reporters Thursday morning.

The mayor is proposing no tax increases or major spending cuts. Revenue was up this year, allowing him to propose small investments in various departments and incremental wage-tax cuts while focusing on the elephant in the room: the Actual Value Initiative.

He's asking for a $3.75 billion budget, which is $99 million more than last year's. Of that, $69 million will go to pension costs and increased police wages resulting from a labor-arbitration award. 

City Finance Director Rob Dubow said only about $18 million of the new money would be for discretionary spending. Those items include $4.7 million for new Fire Department equipment, $1 million to expand library hours, $1 million to offset tuition increases at the Community College, $1 million for the Revenue Department to step up tax collections and others.

As previously reported, Nutter is proposing a 1.32 percent property-tax rate to go along with the first year of his Actual Value Initiative. He's asking for a decrease in the homestead exemption (which deducts money from property assessments for owner-occupied residences) from $30,000 to $15,000.

He also wants to set aside $30 million to provide relief for small commercial properties and for low-income people who could see huge jumps in their tax bills. That type of relief will have to be done through grants, rather than direct tax breaks, to comply with state law. 

With many residents questioning their new property assessments under AVI, the city wants to increase by 50 percent the amount of money it sets aside to handle assessment appeals. Nutter wants $32 million in the budget for lost appeals.

With both the property tax and the use-and-occupancy tax, Nutter hopes to capture the same revenue next year as this year. Consequently, he's proposing cutting the U&O to .92 percent.

Under Nutter's plan, the wage tax will begin five years of slight reductions, from 3.93 percent to 3.76 percent for city residents and from 3.5 percent to 3.3 percent for non-residents. Wage-tax reductions were suspended during the recession, but Nutter promised to bring them back. 

He's also setting aside money for unresolved labor contracts with the unions that are protesting his budget address right now. Three of the city's four big unions have been working without contracts since 2009, and Nutter wants to carve out $84 million over five years in case those disputes are resolved. 

Additionally, the mayor is hoping to invest $3 million from the capital budget in a previously announced bike-share program, like the ones in Washington, D.C., and Denver. 

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William Bender, a Drexel graduate who landed at the Daily News in 2007, has covered everything from South Philly mobsters to doomsday hucksters. He occasionally writes about local food trucks and always eats everything on his plate, whether it be a bloody rib eye or a corrupt politician. E-mail tips to benderw@phillynews.com
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David Gambacorta, has been a reporter with the Daily News since 2005, covering crime, police corruption and all of the other bizarre things that happen in Philadelphia. Now he’s covering the 2015 mayor’s race, because he enjoys a good circus just as much as the next guy. He’s always looking to get a cup of coffee. Send news tips and other musings on life to gambacd@phillynews.com
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