By Pete Mazzaccaro
I hate talking about taxpayers in the abstract. It’s often a term used to end arguments for those convinced that nothing is more sacred than the rights of taxpayers when it comes to any government decision.
In the case of Philadelphia’s imminent adoption of a new property tax based on actual value – known as AVI (Actual Value Initiative) – I think it’s absolutely worth talking about taxpayers. The tax hikes that are coming in Philadelphia are not abstract. They’re very real.
In the next few weeks, City Council will finalize a budget that promises major property tax increases for many in Philadelphia. In Chestnut Hill, where a median home price is approximately $450,000, taxes will go up for all homeowners in the community.
Last week, the news website Philadelphia Public Interest Information Network developed a map showing the impact of the Actual Value Initiative on homes across the city. It can be found here.
A look through Chestnut Hill properties on the map shows increases ranging from 4 percent increases on the lowest end to 102 percent on the high end. Many show increases of more than 50 percent.
I found similar results when looking at a sampling of four properties in Chestnut Hill in a story two weeks ago.
While there hasn’t been a flood of opinions on the matter coming to the Local via letter or email, there are major rumblings behind the scenes.
Business owners and property owners are upset – justifiably so – by the ramifications of a tax boost. Some have said it will likely to lead to layoffs, higher rents and, perhaps, even failed projects.
One property owner told me he is convinced that the higher taxes could result in rolling residential foreclosures as tax bill hikes in the thousands of dollars push homeowners – already stretched beyond their means – to the breaking point. I think he’s right. The city is stressed enough as it is. A hike this high will definitely tip the balance. People will be forced to leave. The city’s population renaissance of the last 10 to 15 years will be put in jeopardy.
To make matters worse, the tax hike – aimed at raising $94 million needed for city schools – appears to be unnecessary given a fact unearthed by Plan Philadelphia and The Philadelphia Inquirer last week that showed tax delinquencies have grown to $472 million. That’s more than five times the number the city hopes to raise in new property and/or use and occupancy taxes. Those figures, too, were mapped by PlanPhilly here.
The implications are clear. Tax paying Philadelphians will be pressed yet again, not only to foot the bill for a school system that’s lost funds from the state, but also to cover the tens of thousands of property owners who have not paid their taxes.
I can’t imagine that this will sit well with anyone holding a freshly hiked property tax assessment next year. As another Hiller who owns both a business and a home in Chestnut Hill told me, it breaks the “silent deal” many have with the city – they’ll tolerate lessened services and send kids to private schools because they know they’re getting a good deal on their property taxes.
If Philadelphia levels the playing field, matching surrounding townships dollar to dollar on taxes, there’s no question that those who can will leave.