City: About $90M more in property-tax revenue expected

UNDER MAYOR Nutter's budget for the coming fiscal year, which he is set to unveil Thursday, he expects to collect about an additional $90 million in property taxes from residents.

Just don't call this a tax hike.

The city's switch to a property-tax system based on market values will effectively make permanent the revenue increases from two tax hikes that had been billed as temporary.

In addition, the Nutter administration revealed Wednesday that it expects to bring in about $90 million more in property taxes next year compared with this year, all of which would go to the school district - which amounts to a roughly 8 percent increase in property-tax intake.

But Nutter's finance director, Rob Dubow, said Wednesday that the tax-revenue increase is simply a reflection of the rise in property values in the city - and not the back-door tax hike decried by critics.

"Values have gone up and we're capturing that value," Dubow said.

The city's current assessments are considered wildly inaccurate and outdated. No citywide reassessment has been done since 2004. The new system means that some neighborhoods likely will experience a jump in tax bills, and others a reduction. Until new assessments are sent to property owners in October, it won't be clear who wins and who loses.

Because the assessments won't be ready until the fall, Nutter is asking Council to pass legislation that states how much revenue the city needs. When the property values are finished, the administration will set a millage rate that meets the revenue goal.

Dubow said the taxes collected that would go to the city would be roughly $458 million next year, the same amount as in the current year. But the taxes that go to the school district are expected to come in at $673 million, about $90 million more than this year.

Councilman Mark Squilla, who represents the 1st District in South Philadelphia, said he was concerned about how residents would perceive the numbers.

"I think the people in my district are going to look at it as a tax increase," Squilla said. "It's an increase in revenues, it's an increase in taxes." Squilla expressed concern about residents with limited means who live in neighborhoods that have gentrified. Dubow said the city hopes to have a three-year phase-in of the changes, to ease the impact. And the city is seeking state authorization for homestead-exemption legislation that would lower all residents' assessments by $15,000. Low-income seniors also could apply for relief.

Assessors from the city's Office of Property Assessment have been out in the field for months surveying the city's 577,000 properties. Dubow said they expected to have preliminary assessments completed in June and then the city will spend several months checking the numbers.

The property office was created after voters in 2010 approved a plan to abolish the Board of Revision of Taxes, which came under fire in the Inquirer for a history of political patronage and inaccurate assessments. The BRT board remains in place to hear appeals.

Contact Catherine Lucey at 215-854-4172 or luceyc@phillynews.com, or follow on Twitter @PhillyClout. Read her blog, "PhillyClout" at www.phillyclout.com.