With the city’s first property tax assessments in two years prepared to be shipped out to residents, officials in the Office of Property Assessment came before Philadelphia City Council Monday to explain their methodology. They also told council members about the methods used to determine the city’s soaring real estate values.
Chief Assessment Officer James Aros, Jr. said the review shows most of the city’s properties are increasing in value by an average of 31 %. The result could mean higher taxes unless the mayor and city council come up with ways to abate the increases.
Even factoring in projected appeal and collection losses, city officials predict this will result in additional property tax revenues to the General Fund of $92 million in Fiscal Year 2023 and $460 million for the city over the course of the FY23-27 Five Year Plan.
After problems in the past with the assessments, Councilmember Catherine Gilmore Richardson is concerned about how the valuations are done.
“So many individuals in our city live below the poverty level and are not able to afford such a large increase so I think it’s important that we use an equity lens in this process,” she said.
Aros told councilmembers that they had to look at the properties individually and not take any racial or ethnic factors into account. The OPA is working on posting its methodology as required now that the values have been finalized.
Council has requested the information in order to do its own analysis to see if the data is within acceptable guidelines. Aros said the findings have been certified by an outside review to be within acceptable guidelines of his industry.
Councilmember Curtis Jones refuted that statement. In his district, “the values are all over the place, and I know the neighborhood enough to know, a lot of them are single, ranch-style homes,” Jones said. “I can’t understand the variance in some of those properties.”
There was concern about how the higher tax assessments would impact the ability of people to pay their bills. Councilmember Cindy Bass told the hearing it could force people out of town.
“Negatively affected are going to be Black and brown folks living in neighborhoods that are gentrifying,” Bass said. “You are also going to have a significant effect on people who are not minorities who are middle income who are just barely holding on.”
The official assessments will be mailed to homeowners in September, with a paper appeal form located with the assessment. At least the aim is to have them mailed in September. The vendor the city has contracted to do the mailing is having supply chain issues procuring enough envelopes.
Officials are estimating up to 20% of those who receive the new assessment will appeal. There are also programs available to help people ease their tax burden such as the homestead exemption, Longtime Owner Occupants Program (LOOP), which can help those who see a sudden jump in their tax bill. There’s also help for low-income residents and the help for senior citizens, who want to freeze their taxes at current rates.
City residents can find information about their new assessment on the Office of Property Assessment’s website. The hikes are for the tax year 2023, because citywide reassessments for tax years 2021 and 2022 were postponed due to issues posed by the COVID-19 pandemic.
Appeals to the tax increase must be filed by October 3. That date is set by the state and not by the city.
The Board of Revision of Taxes is expected to begin hearing appeals in January 2023 and is asking people to file their appeals as soon as possible in order to expedite the process. That could move the start date for appeals up to October.