City Council passes $3.8 billion budget

Coun­cil passes a 2014 budget that mem­bers say sta­bil­izes taxes and adds more cops and fire­fight­ers.

  • Bobby Henon

  • Brian O’Neill

City Coun­cil mem­bers gave their fi­nal OK to a $3.8 bil­lion 2014 op­er­at­ing budget last Thursday be­fore re­cess­ing for the sum­mer.

The 2014 fisc­al year budget is an in­crease of $190 mil­lion over 2013 ex­pendit­ures, May­or Mi­chael Nut­ter said in a news re­lease.

The in­crease rep­res­ents more than $60 mil­lion for pen­sions, debt ser­vice and em­ploy­ee costs, and more than $100 mil­lion for labor ob­lig­a­tions.

The budget has the money to in­crease Po­lice De­part­ment strength to 6,525 of­ficers. With a class of 160 ca­dets this sum­mer, Fire De­part­ment strength will move up to 2,216 fire­fight­ers, the may­or stated.

Coun­cil also ad­op­ted a $2-a-pack ci­gar­ette tax, which along with more ag­gress­ive col­lec­tion of prop­erty tax as­sess­ments, is ex­pec­ted to bring in $74.5 mil­lion in new rev­en­ue for the fin­an­cially strapped city school dis­trict. The dis­trict is fa­cing a $304 mil­lion short­fall.

The dis­trict asked city coun­cil for $60 mil­lion in ex­tra fund­ing for the next school year. Al­though the coun­cil passed the ci­gar­ette tax, it must be ap­proved by state law­makers be­fore it can be en­acted.

Ad­op­tion of the city budget came one week after the coun­cil ad­op­ted a prop­erty tax rate of 1.34 per­cent as the city took the fi­nal step to­ward a his­tor­ic re­vi­sion of its prop­erty tax sys­tem. Un­der the Ac­tu­al Value Ini­ti­at­ive, prop­er­ties were re­as­sessed at full mar­ket value. Pre­vi­ously, they had been as­sessed at a par­tial value.

As a res­ult of AVI, City Coun­cil mem­bers pre­dicted many North­east Phil­adelphia homeown­ers will see their 2014 taxes dip a bit. But res­id­ents of some oth­er parts of the city, in­clud­ing Cen­ter City and part of South Phil­adelphia, will see large tax in­creases. 

Reach­ing the 1.34 per­cent tax rate in­volved months of ne­go­ti­ations among coun­cil mem­bers. May­or Nut­ter had asked for a rate that was slightly lower, 1.3204 per­cent.

Coun­cil­man Bobby Hen­on (D-6th dist.) said the fig­ure con­sidered last year was 1.8 per­cent, and Coun­cil mem­bers fought to set a lower rate.

But AVI, by law, had to be ac­com­pan­ied with a tax rate change so that the city would not bring in more in 2014 than it did in 2013. 

Some res­id­ents feared the full value as­sess­ments would mean high­er taxes.

“Once you ex­plained it to people,” Hen­on said, “they were re­lieved.”

When set­ting the tax rate, the coun­cil also ad­op­ted a $30,000 homestead ex­emp­tion for people who live in their own homes.  Hen­on pre­dicted the homestead ex­emp­tion will be a boon for homeown­ers in the North­east.

The trouble is not every­body has ap­plied for the tax break, Hen­on said. To rem­edy that, he said, he and staff went door-to-door to sign up res­id­ents.

Coun­cil­man Bri­an O’Neill (R-10th dist.) didn’t vote for the ex­emp­tion be­cause he said it pushed up the tax rate. But even be­fore the vote, he had been en­cour­aging his con­stitu­ents to sign up for it.

Hen­on said the budget in­cludes more spend­ing for po­lice and fire pro­tec­tion. The Com­munity Life Im­prove­ment Pro­gram will get two new in­spect­ors, he ad­ded.

Coun­cil­wo­man Maria Quinones Sanc­hez (D-7th dist.) said the budget has money for façade im­prove­ments in com­mer­cial cor­ridors.

The coun­cil­wo­man said the tax rate coupled with the homestead ex­emp­tion will en­sure about 98 per­cent of the people in her dis­trict, which in­cludes parts of the Lower North­east, will see their taxes de­cline or stay about the same.

She sponsored a $2,000 Use and Oc­cu­pancy ex­emp­tion for re­tail­ers, many of whom are likely to see their prop­erty taxes rise. Pre­vi­ously, she said, com­mer­cial cor­ridors were un­der­assessed. The ex­emp­tion would res­ult in a wash in taxes for some busi­nesses, she said.

Coun­cil Pres­id­ent Dar­rell L. Clarke de­scribed the budget as a col­lab­or­a­tion among of­fi­cials of Nut­ter’s ad­min­is­tra­tion, Coun­cil mem­bers and staff.

Some City Coun­cil mem­bers, in­clud­ing Clarke, are sat­is­fied with the new mar­ket value as­sess­ment, but say there are still ques­tions about the ac­cur­acy of some as­sess­ments.

“I am pleased the ad­min­is­tra­tion and Coun­cil ar­rived at agree­ment over the Ac­tu­al Value Ini­ti­at­ive, which brings over­due fair­ness to thou­sands of Phil­adelphia homeown­ers whose prop­erty val­ues were over­assessed,” Clarke said in a news re­lease. 

“However, many of us on Coun­cil re­main con­cerned about the ac­cur­acy of the as­sess­ment pro­cess. We hope our le­gis­la­tion that would re­fine stand­ards and in­crease trans­par­ency at the Of­fice of Prop­erty As­sess­ment will be signed by the may­or and fully im­ple­men­ted by the ad­min­is­tra­tion.”

On Thursday, Coun­cil also OK’d bills that will al­low in­come-eli­gible res­id­ents whose tax pay­ments rise be­cause of AVI to de­fer their tax pay­ments, and of­fer some tax re­lief to long­time own­er-oc­cu­pants.

The new budget provides more than $1 bil­lion to the School Dis­trict of Phil­adelphia. Bey­ond the $60 mil­lion in new rev­en­ue from the city, the dis­trict is seek­ing $120 mil­lion in ex­tra fund­ing from Har­ris­burg and more than $100 mil­lion in give­backs from the Phil­adelphia Fed­er­a­tion of Teach­ers. 

Also in the new budget:

• $1 mil­lion to ex­pand Free Lib­rary of Phil­adelphia branch hours.

• $1 mil­lion to off­set a Com­munity Col­lege of Phil­adelphia tu­ition in­crease.

• $781,000 for the De­part­ment of Li­censes and In­spec­tions to hire more code en­force­ment in­spect­ors.

• $1.7 mil­lion for the Of­fice of Prop­erty As­sess­ment.

• $1.3 mil­lion to partly re­place fed­er­al fund­ing cuts to the De­part­ment of Pub­lic Health and the Of­fice of Sup­port­ive Hous­ing.

• $1.2 mil­lion to im­prove de­lin­quent tax col­lec­tion.

What’s my tax bill?

Homeown­ers eas­ily can fig­ure out how much they will be chip­ping in­to the big city’s 2014 fisc­al year kitty. It’s just some arith­met­ic — a sub­trac­tion fol­lowed by a mul­ti­plic­a­tion.

Res­id­ents re­ceived new prop­erty as­sess­ments earli­er this year. An own­er-oc­cu­pant who has ap­plied for and re­ceived a homestead ex­emp­tion, can de­duct $30,000 from that as­sess­ment. Then that num­ber is mul­ti­plied by the tax rate of 1.34 per­cent. That rate equals $1,340 for every $100,000 of as­sessed value.

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