Mayor Michael Nutter supplied a missing number for property owners to figure their taxes last week when he proposed a $3.75 billion budget for the 2014 fiscal year.
The mayor proposed a tax rate of $1,320.40 per $100,000 of assessed property value.
But homeowners should make those calculations on scrap paper and in pencil because nothing is set yet. City Council members this spring will review and debate the mayor’s suggested tax rate as well as his tax-relief and spending proposals. The final tax rate will be determined by a council vote.
Because the city has moved this year to assessing properties at their actual, or market, values, the tax rate will be lowered from the current 9.71 percent to generate the same revenue.
On March 14, the mayor tried to deliver his budget address in City Council chambers, but was drowned out by irate municipal union members who have yet to get new contracts. The protesters chanted, yelled and blew whistles while waving “Mayor Bozo” posters in the council gallery. The mayor’s administration has settled with the police union, but the firefighters and employees represented by two other unions are working under expired contracts.
Nutter later gave his budget remarks in his reception room to the applause of administration staffers.
Nutter also proposed a $15,000 homestead exemption — an amount that is deducted from an assessment before it is multiplied by the tax rate.
Before the mayor released his budget last week, the most frequently mentioned rate was 1.25 percent, or $1,250 in taxes per $100,000 of property value, and the homestead exemption figure cited most often was $30,000.
Opponents of the exemption, which will be offered only to owners who live in their homes, say it inflates the overall tax rate.
The mayor also wants to set aside $30 million in yet-to-be determined tax relief for homeowners in gentrifying neighborhoods or the owners of small businesses whose taxes will soar with the recent move to 100 percent market valuation.
State Rep. Ed Neilson (D-169th dist.) cautioned Normandy Civic Association members on March 14 that there is no guarantee the homestead exemption will be renewed year after year.
“They can say, ‘We can’t afford it this year,’ and the tax rate stays higher,” he said.
Both Councilman Brian O’Neill (R-10th dist.) and Neilson repeatedly have said that the homestead exemption could mean thousands of low-value properties would generate no taxes at all.
The main points of the mayor’s 2014 budget are:
• Property taxes will not increase, and no service cuts are planned.
• The city’s wage tax will decrease very slightly and continue to decrease over the next five years, moving from about $3.92 per $100 of wages to $3.76 per $100 by 2018.
• Spending for the 2014 fiscal year, which begins July 1, will be $99 million higher than it is in the current fiscal year. Most of the increase, $69 million, will pay for city employee pension costs and police salaries.
• Fifty-four percent of the $1.2 billion in revenues generated by taxes will go to the school district, whose budget is not part of the city’s $3.75 billion spending plan.
• The city will spend more than $2.5 billion on salaries, pensions and benefits.
• The move to assessing Philadelphia properties at their actual values increases the value of the city’s taxable property from $36 billion to $98 billion.
• Community College of Philadelphia will get $1 million to help offset tuition cost increases.
• $1 million will be spent to expand hours at the branch libraries, and $5 million will be spent over two years to modernize library branches.
• The city will spend $2.1 million to improve firehouses and $4.7 million for new self-contained breathing apparatuses, air bottles and 35 new “Jaws of Life” gear.
• In June, 160 fire cadets in two classes will begin training that will end in November. In January, 148 fire cadets and 21 paramedics graduated from the Philadelphia Fire Academy.
• More police officers will be hired to maintain the department’s strength of 6,525.
• The city will spend $624,000 for public computer centers to continue offering Internet education classes and computer tutorials.
• The city will hire 30 new Department of Public Property employees to perform building maintenance, and 40 additional Parks & Recreation workers to maintain parks, recreation centers and pools.
• The city will hire additional code enforcement and building inspectors.
• The city will continue to develop 4601 Market as a new police headquarters and public health center, freeing the city to sell the Roundhouse at 8th and Race streets and the health building at 500 S. Broad. St.
• The city also is prepared to see the new property assessments it began mailing on Feb. 15 revised. Finance Director Rob Dubow said Nutter’s budget included $32 million to cover tax revenues lost when new assessments are lowered. ••
Reporter John Loftus can be reached at 215-354-3110 or firstname.lastname@example.org