Saturday, March 28, 2015

City still needs state's help to fix property-tax system

Mayor Nutter is in the midst of trying to fix the city's broken, unfair property-tax system. But as noble as that goal may be, it might not be reached if the state doesn't soon pass "enabling" laws that allow the city to provide certain types of property-tax relief to residents.

City still needs state's help to fix property-tax system

Mayor Nutter is trying to fix the city’s troubled property-tax system, which has inaccurately assessed people´s homes for years.
Mayor Nutter is trying to fix the city’s troubled property-tax system, which has inaccurately assessed people's homes for years. DAVID MAIALETTI / Staff Photographer

Mayor Nutter is in the midst of trying to fix the city’s broken, unfair property-tax system. But as noble as that goal may be, it might not be reached if the state doesn’t soon pass “enabling” laws that allow the city to provide certain types of property-tax relief to residents.

For instance, State Rep. Michael McGeehan has introduced enabling legislation that would allow the city to give a “homestead exemption” to certain owners, which would excuse them from paying a portion of their property taxes. 

These types of relief laws are often used to ensure that people on fixed incomes, like senior citizens, don’t get hit with huge tax hikes.

Mayoral spokesman Mark McDonald said the administration was pleased that McGeehan’s bill was introduced. 

“We’re hoping for timely consideration,” he said.

Last year, the Nutter administration told “It’s Our Money” that it wanted the state to pass enabling legislation by the end of 2011. So far, the state hasn’t done it.

If enabling legislation isn’t passed by June 30 — which is when Council members must set a property-tax rate — it will be more difficult to encourage Council to fix the system this year. 

State Rep. Dwight Evans isn’t certain that Pennsylvania lawmakers will pass enabling legislation by June.

“With this group, you never know,” he said. “This is a crazy group of people.”

In order for residents to get property-tax relief, the drop-dead deadline for the state to pass these types of laws isn't until months after this spring.

There are other forms of property-tax relief laws that haven’t been introduced in the state legislature. For example, “smoothing legislation” would base tax bills on an average of assessments over time, so they wouldn’t go up right away. 

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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