The River Wards are likely to see tax increases under the Actual Value Initiative: We’ve got the numbers by neighborhood and Zip Code.
Property owners can expect to get their actual value assessments in the mail this week, and the city’s fiscal watchdog predicted there will plenty of winners and losers when it comes to paying property taxes next year.
Most of the big losers, according to City Controller Alan Butkovitz’s analysis, under the city’s Actual Value Initiative live in and around Center City and South Philly.
On average, owners of single-family properties in Fishtown, Port Richmond and Northern Liberties are likely to see tax increases next year when a new tax rate will be applied to the new assessments.
Butkovitz based his analysis on a tax rate for 2014 set at $1,250 per $100,000 in assessed value, or 1.25 mills, as Mayor Nutter has asked in his discussion with City Council.
In Fishtown, if that rate holds, single-family home owners could see their taxes jump an average of $452, or 39.2 percent, according to the controller.
In Northern Liberties, the average bump up will be $30, or 0.8 percent. In Port Richmond, an average increase of $254, or 30.7 percent, will be likely next year if the 1.25 mills rate is used.
Those numbers would drop if a lower rate is adopted or rise if a higher rate is applied.
“It’s not as painful as I had anticipated,” said City Councilman Bobby Henon (D-6th dist.). When council members were looking at AVI and projecting tax rates last year, Henon said, the rate looked to be much higher and its impact more expensive to taxpayers.
“The controller’s numbers seem correct, but they are using averages and, therefore, can be a little misleading,” said City Councilman Mark Squilla (D-1st dist.)
The city mailed out individual assessments on Friday.
Bukovitz’s staff’s projections were calculated from the Office of Property Assessment records. The controller said these numbers would change if the tax rate goes higher, and, although he believes the rate should be set lower, he said higher is more likely.
The rate, he said, “is a moving target.”
“We have been pushing for the lowest possible rate, and this rate has been going down in response to pressure,” he said in a phone interview Feb. 14.
“I think 1.25 [mills] is still too high,” Squilla stated.
However, if the tax rate continues to move down, the city would have to increase its revenues with other taxes.
Council members are subject to cross-pressures from within their constituencies, he said. Residents of areas in which taxes will rise the most will seek relief, and whatever relief is put into law, Butkovitz said, will push the tax rate up.
The most commonly mentioned relief is a $30,000 homestead exemption. For residents who live in their properties, $30,000 would be cut from the new assessment before the tax rate is applied.
“At a glimpse,” Henon said, “In my district, I’m better off with the homestead exemption. If the tax rate is 1.25 [mills] to 1.35 [mills], I’m still better off with homestead.”
Another is a “means-based” gentrification relief for people on fixed incomes whose property values have skyrocketed. Also, City Councilwoman Maria Quinones Sanchez (D-7th dist.) said if state legislators allow Philadelphia to go after the out-of-the-city assets of tax-delinquent property owners, that would be a big benefit to the city.
The bigger commercial properties that already are assessed close to actual value will see tax decreases, but the owners of small business properties likely will see their taxes go up, she said in a phone interview. Council members will get commercial property figures soon, she said.
Butkovitz sees the residential owners paying 60 percent of the city’s total property taxes under AVI. They now pay 54 percent of the total.
Jeff Hornstein analyzed the AVI numbers for Butkovitz. According to his figures, 169,360 of the city’s 450,798 single-family properties, or 38 percent, will see tax decreases under AVI. He figured that 275,700 will see tax hikes. Most increases will be $400 or less, but 36,838 will see increases of $1,000 or more.
Reporter John Loftus can be reached at 215-354-3110 or firstname.lastname@example.org.
Expected impact, by ZIP Code, on property taxes in 2014 when the new assessments are used and a tax rate of $1,250 per $100,000 in valuation is applied:
19123 – $43 average increase, or 1.3 percent;
19125 – $548 average increase, or 51.5 percent;
19134 – $144 average increase, or 20.4 percent;
19137 – $280 average increase, or 22.9 percent.
Source: Alan Butkovitz.