(PHILADELPHIA) – The Kenney Administration today briefed members of Philadelphia City Council on revisions to the proposed FY19-FY23 Five Year Plan in light of newly-certified property assessment values.
The new values were finalized by the Office of Property Assessment (OPA) earlier this week in advance of their March 31 annual deadline. Under the citywide reassessment, conducted by OPA in the past year, the aggregate value of all properties in Philadelphia rose by approximately 11%. As a result, the Administration has revised its original school funding proposal presented on March 1.
“Three weeks ago I presented a package that would close the District’s projected deficit and to ensure that the gains of recent years are not lost,” said the Mayor. “We focused on providing financial stability to the District through a proposal that asked everyone to pitch in. Our budget also proposed new protections for homeowners. With these new property values now in hand, we’re presenting a new package that achieves the same financial goal, while lessening the impact on property tax payers. In short, I am committed to asking for what the School District needs, and not more.”
Under the new funding package, the City’s property tax rate would rise 4.1%, rather than the original proposed hike of 6%, for a new rate of 1.4572% from the current 1.3998%. The increase in the local portion of the real estate transfer tax would be 3.413%, rather than 3.45% as previously proposed. The slowing of reductions in the wage tax would remain unchanged from the original proposal, as would the plan to commit $100 million of existing revenues to the District over five years.
The Administration also briefed Council members that it is revising its separate proposal to expand the City’s Homestead Exemption program in light of the growing property values. Based on the new assessments, the median residential property in Philadelphia is now valued at $128,100, which is $15,000 more than the previous median value. The Administration now is asking for City Council approval to increase the homestead exemption from $30,000 of assessed value to $45,000, rather than $40,000 in the original proposal. The increase in the local portion of the realty transfer tax will be used to offset the cost of the increased homestead.
If the new homestead were enacted, owners of the median valued home would see their property tax decrease by $162 even with the proposed rate increase. Owners of median valued residential properties without the homestead exemption would pay an additional $73 annually, or about $6 a month.
Owners of properties with values of up to $400,000 would see a decrease in their tax bills, assuming they have the new level of homestead exemption. If they are enrolled in the Homestead Exemption program at its current level, it works out to an additional $51 year – or less than $5 a month.
City Council opens its budget hearings with a review of the proposed Five Year Plan on Monday, March 26th.
Individual property owners whose assessments changed will be notified by mail of the change early next month.