Property assessments headed home
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, won’t be in Northeast Philly. Those who will see their property taxes jump the highest under the city’s Actual Value Initiative live in and around Center City, South Philly, parts of North Philly and the river wards.
City Councilwoman Maria Quinones Sanchez (D-7th dist.) said she isn’t surprised that the Northeast would escape largely unscathed because it has been overassessed for years.
“The Northeast’s properties already are assessed at close to their actual values,” she said. “They’ve been subsidizing the rest of the city.”
Butkovitz based his analysis on a tax rate for 2014 set at $1,250 per $100,000 in assessed value, as Mayor Nutter has asked in his discussion with Council.
In the Northeast’s 19116 and 19115 ZIP Codes — Somerton and Bustleton — the controller predicts tax decreases. Decreases are expected, too, for residents in 19111, 19114, 19152 and 19136 — the neighborhoods of Fox Chase, Lawncrest, Rhawnhurst, Lexington Park and Holmesburg
Decreases in the Northeast average from 0.5 percent to 11.6 percent.
But the Northeast’s losers —those whose taxes will rise in 2014 — aren’t going to be big losers, if the controller’s predictions are correct. People who live in the Far Northeast, 19154, are likely to see tax hikes averaging $33, Butkovitz’s office forecast.
That ZIP code is east of the Boulevard and above the Pennypack. It includes, among others, Parkwood, Normandy, Walton Park and Millbrook.
Pull Parkwood out and average it separately, however, and Parkwood residents will see $77 hikes.
Single-family property owners in Lower Northeast ZIPs of 19149, 19135 and 19124 also are expected to see their taxes increase. Those ZIPS include Tacony, Frankford and Northwood. Butkovitz predicted average taxes would rise in those neighborhoods, with increases averaging between $11 and $33.
“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.
Butkovitz’s staff’s projections were calculated from the Office of Property Assessment records. The numbers would change, based on the tax millage rate.
Butkovitz has argued that the rate should be set lower, but, he predicted, 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 on Feb. 14.
City Councilman Brian O’Neill (R-10th dist.) on Friday said a 1.21 millage rate might still be possible.
However, if the tax rate continues to move down, the city would have to increase its revenues with other taxes.
“If I was in the Northeast, I wouldn’t be resting easy just by reading the controller’s report. No one knows what the final tax rate will be,” said City Councilman Bill Green (D-at large).
And basing an analysis on an average change can “present a very skewed picture because a few properties can have an unbalancing effect” on an entire area, Green added.
Council members are subject to cross-pressures from within their constituencies, Butkovitz 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 overall 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.
Another is a “means-based” gentrification relief for people on fixed incomes whose property values have skyrocketed. Also, Quinones Sanchez 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, Quinones Sanchez said in a phone interview.
“Commercial/Industrial property have typically been better and more frequently assessed under the old system,” Green stated in an e-mail to the Northeast Times on Friday.
“As a result,” Green continued, under the reassessment, there will be a shift of roughly $200 million from the commercial/industrial base to the residential base. State Rep. Cherelle Parker and [the Philadelphia] delegation in Harrisburg are working to change the Constitution and allow us to tax different types of property at different rates.”
That kind of constitutional change, Green said, would take at least a few years.
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.
O’Neill said the reassessments mailed to residents on Friday also became available the same day at the Office of Property Assessment’s Web site. The site’s address is avicalculator.phila.gov.
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
Here is the expected impact on property taxes in the Northeast in 2014 when the new assessments are used and a tax rate of $1,250 per $100,000 in valuation is applied:
By ZIP Codes
19111 – decrease $127
19114 – decrease $193
19115 – decrease $323
19116 – decrease $248
19136 – decrease $9
19152 – decrease $108
19124 – increase $27
19135 – increase $33
19149 – increase $11
19154 – increase $33
By selected Northeast neighborhoods:
Bustleton – decrease $332, or 11.6 percent
Fox Chase – decrease $155, or 6 percent
Holmesburg – decrease $120, or 6.7 percent
Lawncrest – decrease $43, or 3 percent
Mayfair – decrease $23, or 1.3 percent
Oxford Circle – decrease $19, or 1.2 percent
Parkwood – increase $77, or 3.6 percent
Rhawnhurst – decrease $171, or 7.3 percent
Somerton – decrease $184, or 6.9 percent
Source: Alan Butkovitz.