Sunday, August 30, 2015

People's Board: We're worried about property tax reform

WE the people began talking about property taxes by taking an anonymous survey of our board. Each member who owns property wrote down the market values of our homes, and what we pay in property taxes.

People's Board: We're worried about property tax reform


WE the people began talking about property taxes by taking an anonymous survey of our board. Each member who owns property wrote down the market values of our homes, and what we pay in property taxes.

One owner of a $100,000 home pays $5,000 in taxes, while the owner of a $300,000 home pays $3,000; an owner of a $350,000 home pays $6,700.

Our experiment confirmed that Philly's property-tax system is a joke. How much you pay in taxes is based on the city's estimated "value" of your property, but those values are have been set over the years by a dysfunctional, often politically motivated system out of touch with reality. Which is why the Nutter administration is reassessing all the properties in the city, in order to tax the full correct value. This will make all of our property taxes fairer.

We support this effort. Better to have a system built on actual value than arbitrary value. We do have a few serious concerns.

INFORMATION. Since some people will pay less in property taxes and some will pay more, there is high anxiety about this change. The city can reduce this anxiety by creating more ways for people to get answers - like how to appeal assessments.

TIMING. To ease the transition for those whose taxes go up, the city wants tools that would lessen the impact for certain taxpayers. But it needs the state's permission to do this.

Until that happens, we believe it would be irresponsible for the city to start using the new values. It will not be enough for city officials to simply blame the state for the problem.

TAX HIKE. This year, the city will collect about $1 billion total from us residents. After the re-assessment, the Nutter administration projects, it will collect about $1.1 billion. Ninety million of the additional dollars will go to the school district.

Critics have called this a back-door tax hike. The Nutter administration says it's just capturing an increase in value in the city's property.

The majority of our board thinks the mayor should have the guts to call this a tax hike.

And all of our board thinks the city should answer a few questions before taking more from taxpayers. Why does the city need more money? What would be lost without it? Is property-tax reassessment the best way to get it? And how does an increase in property-tax collection fit into the city's long-term tax policy?

The administration seems to be hiding behind the argument that property taxes ought to be fair. But we could make taxes fair while making them lower - or much higher.

How fair a tax is and how much we pay are separate issues, and we as a city should have conversations about both.

This People's Board editorial also appeared in the Daily News.

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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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