As debates concerning the tax rate in the wake of the reassessment of the city’s roughly 590,000 properties continue, one of the largest factors continues to be what relief measures will be offered and value that will carry.
Mayor Nutter’s most recent proposal, a 1.32 percent tax rate, included a combined $30 million for longtime residents and small business owners who would see dramatic increases as well as a $15,000 homestead exemption. Only the latter, however, is available to any homeowner in the city for a primary residence.
The result is that some properties where owners are seeing more minimal changes, even those receiving decreases in annual real estate taxes, can apply just the same as those seeing the greatest jumps. As Isaiah Thomas of AxisPhilly reported, this included properties benefiting from the 10-year abatement program.
Homeowners have until July 31 to apply for the homestead exemption. They can do so on the phone, online or by submitting a printed copy through the Office of Property Assessment. But the final value of the exemption could range from the $30,000 maximum to nothing at all, depending on the votes of City Council members. Despite the flexible nature of the exemption, OPA’s website says: “Effective for Tax Year 2014, the City will offer a Homestead Exemption to all Philadelphia homeowners.”
Regardless, some University City homeowners said they see the homestead exemption as more of a minor piece to the tax puzzle.
“The exemption is really going to be a small piece, overall,” said David Axler, who has owned his property on the 4400 block of Chestnut Street since 1995.
Axler cited the comparatively small returns the homestead exemption provides to homeowners seeing large increases. Under the Mayor’s proposal, taxpayers would see $198 in savings with the exemption compared to a property of equal value without it. For Axler – whose house was assessed at $375,100 and has already been approved for the homestead exemption – this would mean a tax bill of $4,753.32, a 135 percent increase from the $2,019.86 he paid last year, but only 4 percent in savings.
“The homestead exemption is going to benefit those in a lower tier more than others,” Axler said. “I don’t qualify for any of the need-based programs. But the amount of change I’m seeing is probably substantially more than people who qualify for it. The assumption that because I have a higher income I don’t need the help is very questionable.”
Still, Axler said he doesn’t begrudge the change in system or his assessment.
“I have no objection to the new assessment, which I think is very accurate,” he said. “My wallet doesn’t like the news. I think [the Actual Value Initiative] is a good idea…But implementing it is going to be painful for some folks.”
This pain will be felt particularly hard in University City, which saw median market values increase by more than 300 percent from last year, the third-highest increase in the city.
Some University City residents let their frustrations be heard during town hall meetings, resulting in the Nutter administration pulling its plans to send officials to further talks in the 3rd District.
It remains to be seen if there will be any political ramifications for Councilwoman Jannie Blackwell, who has served the 3rd District since 1992.
Robert Fisher, who has resided on the 4600 block of Walnut Street for 41 years, said he would not vote for Blackwell in the next election if he saw the types of increases he is currently projected to see. Fisher’s property has been assessed at $370,400, which translates to a projected tax increase from $706.64 in 2013 to $4,691.28 in 2014, after including a $15,000 homestead exemption, which he has already been approved for. This would be an increase of about 564 percent.
Fisher, who is both retired and on disability, also said he questioned whether the assessments reflected an honest request and were not a political ploy.
“If you want $10, you ask for $25,” Fisher said. “So when they say taxes will go up [more than 500] percent, well, I just can’t see it.”
Fisher also said he understands that some changes are necessary to fix problems in the city’s tax infrastructure but called on representatives to do so in a way that wouldn’t create such a drastic change.
“I think City Council has the power to step in and do something. I could understand revising the tax code or the system, but to a way that’s more manageable.”
Axler, who said he has not voted for Blackwell in the past and does not anticipate doing so in the future, echoed a similar sentiment concerning the necessary changes to the tax code. But he also questioned the priorities of the representatives charged with protecting their constituents’ interests.
“They’ve been talking about AVI for 20 to 30 years…Had they done it 20 years ago, I think we would have been better off,” he said. “There’s a lot of talk and not much action. And all the City Council folk – both the district reps and the at-large – are scurrying around trying to figure out a: what will get them reelected and b: what will help their constituents in – pardon my cynicism – that order.”
While Axler said he supports AVI, he said he also believes there are other issues with the city’s tax system that representatives should consider addressing.
“I think that one of the biggest flaws in the system, long-term, is that they do not make a monthly payment plan available unless you’re over 65 and impoverished,” Axler said. “That’s idiotic. If they can set it up for one person, they can set it up for all.”