Philadelphia Mayor Proposes 9.3% Property Tax Hike
By Claudia Vargas and Tricia L. Nadolny
Mayor Nutter will ask City Council on Thursday to approve a 9.3 percent increase in property taxes to fund the beleaguered School District.
In his final budget address as mayor, Nutter will ask Council -- in an election year -- to approve a $3.95 billion spending plan that would raise property owners' taxes by hundreds or even thousands of dollars a year.
Currently, the tax bill for a home assessed at the median of $113,000 is $1,112. If Nutter's proposal was approved, it would go up to $1,216.
Details of the budget were disclosed to Council members Wednesday morning in a three-page brief that was subsequently obtained by The Inquirer. The administration declined to comment on the record about the budget, saying it would wait until the mayor's address.
Technically, the tax rate would go up from 1.340 percent of assessed value to 1.465 percent. The last time the property tax rate took a similarly big jump was in 2010, when it went up 9.9 percent. That was followed by a 3.85 percent increase the following year when a proposed tax on sugary drinks fell through during last-minute negotiations.
Wednesday's news fired up some Council members, the GOP, and the city's fiscal overseer, the Pennsylvania Intergovernmental Cooperation Authority.
PICA Chairman Lawrence Tabas called Nutter's decision to tax for school funding "a short-term solution" to the larger problem of a woefully underfunded pension fund.
"Every time you defer pension payments, that's what's really crippling the ability to do revenue enhancement to provide more money for the schools," Tabas said.
"The easy way out is just to raise a tax," said Councilman Mark Squilla, who represents the First District. "I can only speak for myself. But I can't see asking for a 9 percent tax increase on real estate as something that would fly."
Councilwoman Jannie L. Blackwell was equally outspoken.
"A property tax increase? Please. I don't think we're going to consider going that way," Blackwell said, making it clear that she would vote against such a hike.
Council President Darrell L. Clarke declined to comment, and most of his colleagues were cautious with their responses.
"I think Council will figure out a responsible way to give funding to the schools before it asks ratepayers to pay more," said Councilwoman Maria Quiñones Sánchez, who represents one of the poorest districts in the city.
Joe DeFelice, executive director of the Philadelphia Republican Party, called it a "crushing blow" to taxpayers.
"This game of bait and switch between Gov. Wolf, City Council, and Mayor Nutter lowers the wage tax by 0.5 percent but increases the state income tax by 20 percent and Philadelphia property tax by almost 10 percent, thereby guaranteeing that more money will flow out of the pocketbooks and wallets of taxpayers in exchange for larger government, both at the state and local level," DeFelice said in a statement.
The Chamber of Commerce declined to comment, saying it had not had a chance to review the full budget.
Nutter's proposal came one day after Wolf proposed increasing state taxes to help the commonwealth's school districts.
The city now provides about $1.2 billion to the district through tax revenues and nontax sources.
Superintendent William R. Hite Jr. had requested an additional $103 million in new recurring revenues for the 2015-16 school year. That money -- along with the $160 million in new money proposed in Wolf's budget -- would wipe away the district's $80 million deficit.
The city's $3.95 billion spending plan is nearly $90 million more than last year, in large part because of rising pension and health-care costs. The bite that the pension fund takes out of the city's operating budget is only expected to grow each year.
Nutter's budget will also give extra money to the following departments: The Department of Licenses and Inspections would receive an additional $5.5 million to bolster its workforce and buy new equipment.
The Department of Parks and Recreation would receive $3.9 million to expand its summer jobs program for city youth.
Community College of Philadelphia would receive $3.4 million to help offset tuition increases.
(c)2015 The Philadelphia Inquirer