Philadelphia City Council is considering a package of proposals designed to lessen the financial burden of recently released property assessments on homeowners, many of whom saw their property values rise by nearly a third compared to the last round of calculations in 2019.
On Thursday, Councilmember Kenyatta Johnson unveiled his “Save our Home 2022 Property Tax Relief Plan,” a seven-point initiative that relies on revenue generated by the new assessments. The plan, expected to cost more than $90 million a year, calls for changes to existing property tax relief programs, as well as amendments to the $5.6 billion budget Mayor Jim Kenney has proposed for the fiscal year that begins July 1.
“Tax policy can be dry. It can be technical. But people’s homes are at stake. Their dignity is at stake. It is our job to step up and step in,” said Johnson.
Johnson introduced the plan as the Kenney administration and City Council began budget negotiations. It’s backed by a super-majority of Council, meaning the legislative pieces of the package can become law without the mayor’s approval.
The list of co-sponsors includes: Councilmembers Mark Squilla, Jamie Gauthier, Curtis Jones, Maria Quiñones-Sánchez, Cindy Bass, Cherelle Parker, Katherine Gilmore Richardson, Derek Green, Helen Gym, Kendra Brooks, Isaiah Thomas and David Oh.
“Working with my Council colleagues, I will do everything in my power to ensure that these increased assessments do not translate to increased taxes for working and middle class Philadelphians,” said Parker, the legislative body’s majority leader, in a statement.
Johnson’s plan focuses on making changes to three existing property tax relief programs.
Under the proposal, the city’s homestead exemption would be doubled to $90,000, the maximum amount allowed under state law. If passed, most homeowners would be able to subtract that amount from their property value before paying their property taxes, saving residents more than $1,200 on their annual bill.
Councilmember Brian O’Neill introduced an identical bill last week. Both measures go beyond the bump recently proposed by Kenney, which seeks to raise the value of the exemption from $45,000 to $65,000.
Johnson’s plan also seeks to overhaul the Longtime Owner Occupants Program, or LOOP, an initiative designed to help low-income homeowners in rapidly gentrifying neighborhoods. If approved, a homeowner’s property value is capped at 150% of the previous year’s value. For example, if a home was assessed at $100,000 in 2022, the property value in 2023 could not exceed $150,000.
Under a bill introduced on Thursday, more residents would be eligible for that benefit, meant to help homeowners remain in their homes, even as neighborhood property values increase around them.
As it stands, a homeowner’s property assessment must have increased by at least 50% after the homestead exemption was deducted from the new value. If passed, the value of the homestead exemption would no longer be part of the calculation, making it easier for residents with lower-value homes to qualify for the program.
Homeowners would also be eligible if their property value increased by at least 75% over the course of five tax years.
Existing program participants would remain in the program. Additionally, residents could participate in LOOP and the homestead exemption program, something that was not previously possible.
The same would hold true for the Low income Senior Citizen Real Estate Tax Freeze. Johnson also wants to make it possible for income eligible residents to apply for the program retroactively so participants could indefinitely freeze their property taxes at the amount they paid the first year they became eligible for the program. Generally, participants must be 65 years or older.
“We are so grateful to Councilmember Johnson and the City Council members who are supporting this legislation to prevent homelessness and preserve intergenerational wealth. Expanding access to these programs is a huge step forward in ensuring Philadelphia homeowners get the help they need,” said Jonathan Sgro, a supervising attorney with Community Legal Services, which consulted with the lawmakers on the bills.
Johnson’s plan also seeks to earmark more than $16 million in fiscal year 2023 for outreach and services tied to the new property assessments.
While the new values are available online, the city does not expect to mail out the official reassessments until late summer, largely due to a supply chain snafu that’s made it difficult for a city vendor to secure enough envelopes. That means some people may not know their new property value until weeks before they must apply for a formal appeal.
To combat that, Johnson wants the city to spend $2.5 million to raise awareness about the property assessments so residents can learn about them sooner, and be directed to resources that could help them pay less in property taxes.
In anticipation of rent increases, Johnson is also proposing that the city set aside $12 million for rental assistance. Another $2 million would be used to help residents with legal issues tied to the reassessments.
A mayoral spokesperson said the administration looks “forward to continued conversations with City Council as we move forward through the FY23 budget process.”
The drop-dead deadline for passing a new budget is June 30, the final day of the current fiscal year.
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