Sparks flew as Philadelphia City Council began reviewing Mayor Michael Nutter’s 2013 budget proposal Monday. The fiercest debate surrounded the mayor’s plan to reassess the city’s property values and generate $90 million in new revenue.
Several Council members questioned city finance director Rob Dubow about the plans. No Council member spoke in support of it.
It’s generally agreed city property assessments are overly complicated and out of date. The Nutter Administration is now reassessing the value of every property in the city — with plans to adjust tax rates once the assessments are finished.
The process could dramatically increase tax bills for some residents, and overall, the city will collect about 8.5 percent more in property tax revenue.
Councilman Jim Kenney worries this could drive residents of out
“There’s got to be a cap. There’s got to be some limit to what we’re gonna whack people with, because they can move,” Kenney said in Monday’s hearing. “You can’t expect people to have their real estate taxes doubled and expect them to want to still be Philadelphia residents.”
Under the Nutter plan, large changes in assessments for particular properties would be implemented over three years, so no one should get an excessively large increase or reduction in a single year. But officials acknowledge that for severely undervalued properties, the ultimate impact could be strikingly larger tax bills.
The Nutter Administration maintains the reassessment is needed this year. Not doing it, they say, would end up costing the city tens of millions of dollars.
When the state did its annual analysis of Philadelphia’s property taxes, it found city assessments have dramatically undervalued properties in the city.
Now, if the city doesn’t make changes, a state law allows property owners to lock into lower assessments and lower tax bills — thus siphoning tens of millions of dollars out of the city’s pocketbook.
Even council members who agree that reassessment is necessary are wary of the specifics of the mayor’s plan.
Councilman Bill Green repeatedly called into question the administration’s research and review process.
“Given the sheer number of questions that the administration said ‘I don’t know,’ I need a lot more, better and different information if I were to pose to move forward with this,” Green said.
Council must enact a new budget and tax plan by the end of May. Homeowners can expect new property reassessments in September.