Homeowners Discussed Impact of Property Tax Reassessment

As the City of Philadelphia undergoes a property assessment overhaul, residents across some older sections of Northeast Philadelphia could see a spike in their property taxes.

Concerns over Mayor Michael Nutter’s Actual Value Initiative (AVI) have prompted two state lawmakers to more closely scrutinize the plan. State Sen. Mike Stack and Rep. Mike McGeehan are also offering alternative solutions that would put pressure on the city to collect property taxes on delinquent homeowners and would ease the impending financial burden on taxpayers.

Stack and McGeehan t met with several longtime homeowners on the 7000 block of Tulip Street in the Tacony section of the city to discuss how the AVI will negatively impact them.

The mayor’s reassessment proposal would bring in an additional $90 million in property taxes, but at the expense of many longtime homeowners.

“Let’s call this plan what it is — a tax hike,” said Stack (D-5th dist.). “Philadelphians have already endured two years of so-called temporary tax increases. Rather than placing the burden on the homeowners who pay their taxes, the city should first go after the many property owners who have failed to pay their taxes.”

“Philadelphians are taxed enough, and they are going to be punished after this reassessment,” said McGeehan (D-173rd dist.). “Our wallets are being tapped again because the city let the property assessment system spiral out of control. We need to offer some protection from the financial pain that many residents will endure soon.”

Tacony resident and business owner Georgeanne Labovitz agreed. “How much more can we afford?” she asked. “The city can’t keep taking and expecting us to keep giving.”

Stack said that the owners of the Thomas W. Buck Hosiery building in Kensington, which caught fire and killed two Philadelphia firefighters, owe nearly $400,000 in back property taxes.

“A tragedy could have been prevented if these property owners, who also have a stack of Department of Licenses and Inspections violations against them, were taken to task by the city,” Stack said. “Instead, the city is targeting longtime homeowners, many of whom have spent most of their lives in their large old houses or inherited homes from family members.”

Philadelphia has a tax delinquency rate of 19%. Delinquent taxpayers owe the city over $470 million as of 2011. Both lawmakers are urging the Nutter administration to prioritize property tax collections by going after the delinquent taxpayers first.

Stack and McGeehan have also introduced legislation that would ease the burden on Philadelphia homeowners upon reassessment.

Their identical legislation (Senate Bill 1504 and House Bill 1600) would impose a homestead property tax exemption for owner-occupied properties, from both city and school district taxes.

Stack’s Senate Bill 1505 would prohibit the City of Philadelphia from increasing property taxes if the city’s property tax collection rate is less than 95 percent.

The bill would also give home-owning senior citizens in Philadelphia with household incomes of $60,000 or less, the option to defer the payment of property tax increases until they sell their house.  Homeowners who have lived at their primary residence for 20 or more years would receive the same tax deferment opportunity. Recently unemployed homeowners would receive a one-year deferment, which would be collected upon the sale of the home.

McGeehan’s legislation would put Philadelphia homeowners on par with the rest of the state under the General County Assessment Law. Currently, all Pennsylvania jurisdictions except Philadelphia may reduce their tax rates for one year to equal the preceding year upon reassessment. House Bill 937 would offer Philadelphians the same anti-windfall protection, as well as an annual 5 percent cap on each preceding assessment.

“The city’s former Board of Revision of Taxes created absolute chaos out of the property assessment system, which is why we’re faced with this current plan to overhaul the system,” McGeehan said. “Many Philadelphia homeowners will be hit hard by this reassessment through no fault of their own. They deserve some cushion to ease the financial blow.”

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