Nutter budget gives little relief to University City residents
Protesters interrupted budget announcement Thursday
March 14, 2013, 11:55 pm·
Amid shouts and whistles, Philadelphia Mayor Michael Nutter attempted to present his budget proposal to City Council on Thursday.
Eventually, Council President Darrell Clarke called recess in the chamber mid-speech after union protesters drowned Nutter out. The municipal workers voiced dissatisfaction with the fact that they have been working for four years without a contract. As Nutter — a 1979 Wharton graduate — left the chamber, those still gathered chanted “Hey, hey, goodbye.”
After relocating, Nutter presented his budget, which included details on the city’s property tax overhaul, the Actual Value Initiative. It included a reassessment of the value of every property in the city, which resulted in home values in the Penn Alexander School catchment zone — which includes much of the area west of campus — jumping 268 percent on average.
Nutter’s budget includes a $15,000 homestead exemption, which would allow people who own their homes to receive a $15,000 discount in the taxable value of their house. He also proposed a 1.32 percent tax rate — which means the homestead exemption would decrease homeowners’ tax bills by $198 per year. Homeowners have until the end of July to apply for a homestead exemption.
Given the exemptions that have already been granted, homeowners in the PAS catchment zone will pay an average of about $4,440 per year in property taxes, according to a Daily Pennsylvanian analysis.
For areas where homes are rapidly rising in value — such as University City — the homestead exemption will do little to ease the burden on taxpayers.
“If you’ve got a house that’s valued at … $600,000 dollars, it’s not going to make a big difference,” Fels Institute of Government researcher Kevin Gillen said. He noted, however, that it would benefit poorer areas in the city, which have lower home values and have traditionally been overtaxed.
“For low-income homeowners, their tax bills are already in the hundreds, so knocking off $200 is real savings,” he added.
Residents gathered Wednesday night at a neighborhood meeting on AVI. Many expressed displeasure at the prospect of higher taxes changing the composition of neighborhoods.
Gillen, who was a panelist at the meeting, said many attendees displayed a “cognitive dissonance” about the situation. “If a 55-year-old, relatively affluent person can’t pay an additional $2,000 a year in taxes, what makes you think a 25-year-old graduate student renter can?” he said.
“Property values reflect the cost of living. Neighborhoods change all the time,” he added.
City Council must pass a budget — which will finalize the amount of the homestead exemption and the tax rate — by the beginning of the next fiscal year, which starts July 1.