It is becoming increasingly clear that Philadelphia will see another property-tax increase in the near future.
The tax increase, obviously, won’t be Mayor Kenney’s original proposal for a 6 percent bump. He’s already taken care of that with the newly released (and peculiarly timed) citywide reassessment showing Philly property values soaring by 11 percent. So, now, in a bid designed to mute growing criticism of a rate increase, hizzoner revises his 5-year plan to include a 4.1 percent increase instead.
So, make no mistake, the Mayor will get his tax bump.
Let’s put this into perspective.
Median household income in Philadelphia, according to the Census Bureau, is just below $40,000 and average income per person is hovering around $24,000.
Yet, when you look at the Economic Policy Institute’s interactive Family Budget Calculator, the cost of living in the city presents a grim picture for those least able to afford it.
For one adult, the average monthly cost of living is near $2,800, or more than $33,000 annually (cruel pocketbook calisthenics when per capita income is just $24,000). Add a child, and the cost of living soars to more than $4,700 a month — or $57,000 a year. Watch the average monthly taxes go from $460 to nearly $700. Add another child and it’s nearly $75,000 a year in average living costs; two adults and two children, it’s about $85,000, including nearly $1,000 a month in taxes alone.
That’s stressful. Imagine putting more taxes on top of that, particularly the burden on low-income families barely making ends meet as it is.
Already throughout Pennsylvania, those making less than $20,000 are paying a much greater share in taxes (at 12 percent) than those making more than $426,000 (at just 4.2 percent), according to the Institute on Taxation and Economic Policy.
City officials’ proposing to drive up property taxes as a way to finance new city largesse — such as the reconstituted public school system — seems calculated to drive out less desirable low-income populations. There’s a hint of classism in this move: “Who wants to deal with them?” Meanwhile, with the property-tax abatement, they leave out lower-income residents in favor of newer (whiter) residents and businesses.
Chicago’s Cook County was recently outed for a similar move, where it was found by a University of Chicago study that $2.2 billion in property assessments were shifted from wealthy homeowners to lower-income homes.
Philadelphia, like its Midwest cousin, continues robbing its poor residents blind because it fears no existential political threat from them. As long as voter turnout remains low in the poorest sections of the city, both the mayor and City Council can raise taxes all they want for as long as they want.
Continuing to raise taxes is the exact opposite of helping anyone, least of all Philadelphia’s children. As the Pew Charitable Trust shows, 32 percent of households below the poverty line include children, with youths under 18 accounting for 32 percent of the impoverished population.
The big, unanswered question remains: How does a property-tax increase help that situation?
Is the objective of the mayor and the city schools to just find a way to fund the schools? Or is it really about making sure the students who attend those schools achieve the highest quality of education possible? It must be the former, because further taxation completely defeats the latter.
Instead, reversing the tax increase, at least in Philadelphia’s poorest neighborhoods, would be the more logical step.
In the wake of Baltimore’s 2015 unrest, Slate.com’s Reihan Salam argued that Baltimore’s poorest communities could use a property-tax decrease, suggesting rising taxes were one factor keeping residents poor. He cites Loyola economist Stephen J.K. Waters’ look at Boston in the early 20th century, in which Mayor James Michael Curley imposed higher taxes on city residents as a way to “finance” loyal city government employees who bolstered his political base, all while driving resentful political competition into the suburbs.
Decreasing taxes would not only place less stress on households, but you mitigate poverty variables that impose unnecessary stressors on students. Even Organization for Economic Cooperation and Development economists agree that heavy taxation only promotes poverty as opposed to breaking it: “The effects of taxation on income distribution need to be seen in the context of the trade-offs between growth and equity.”
The mayor’s proposed property-tax increase, and any Council support for even a modest compromise, is counterintuitive and actually destroys their famous public reasoning. Until city policymakers figure out a way to aggressively or totally break Philadelphia’s entrenched poverty, we shouldn’t be reading the words increased property taxes on any City Hall lips. And if that’s how it’s being played, then the best solution for all impacted folks is to mark November 2019 on their calendars and exact a proportional amount of electoral revenge.
Charles D. Ellison is executive producer and host of the daily public affairs program “Reality Check” onWURD radio. He is also the Washington correspondent for the Philadelphia Tribune and contributing politics editor to TheRoot.com. This piece originally appeared at The Philadelphia Citizen. @ellisonreport