Philly homeowners! Anyone else worried ... (Philadelphia, Clark: apartments, rental, mortgage)

[RightonWalnut]

Be patient guys, it will all make sense soon when the Wage Tax is reduced, the business privilege tax is reduced, and jobs start moving back to the city.

Instead, he suggested lowering the wage tax, eliminating the Business Privilege Taxes and increasing property taxes – especially for the office sector, whose real estate taxes are among the lowest in the country. "There are two big problems: We under-rely on real estate taxes in the city and, within the property tax, we over-rely on taxing residents."

Metro - CCD: Philly's over-reliance on wage tax, BPT has led to job loss

"The big change we need is not lowering taxes, but changing what we tax," he said, adding that instead of taxing the most mobile industries – like the office sector, whose workers can telecommute from nearly anywhere – industries who have no option but to operate in Philadelphia, like tourism and hospitality, should pay. "If it can move and you tax it, it will move," he said. "But you can't be next to the Liberty Bell in Bala Cynwyd."

Levy also advocated for a shift to the Actual Value Initiative of property tax assessment. "AVI will allow us to have a more stable property tax base and rely on it more," he said. "You can't implement this whole plan without those changes."

[drive carephilly]

Originally Posted by Summersm343

So your making your city better by living here and being a tax paying citizen. Your paying less than what you should, and much less than the suburbs, and now the the city wants to raise taxes to WHAT THEY SHOULD BE in order to get more money (because they are cash strapped as it is, to say the least), and you just want to pack up and leave? Like you wouldn't have been paying more in the suburbs all this time anyways?

I'm not paying less than what I should. I already pay a lot in taxes and I get **** all for it. In the absence of the wage tax I would be paying "much less" than the suburbs. But the wage tax is very real and I don't pay much less. I save about $100 a month by living in the city now. After AVI I'll be paying more to live here. Also, there's not much point in comparing property taxes on a rowhome in South Philly to a suburban house on 1/4 acre. You can fit 14 rowhomes on a typical subdivision lot.

I support reforming property taxes and as I've already said twice - I don't mind paying more. But actual value should mean just that. Actual value. The last sale price x annualized inflation. Whatever the changes are they should be fair. Having the Cira Centre and Comcast Bldg. exempt from property taxes, BPT, Net Profits, etc. is not even close to being fair.

Why don't you wait to see what your taxes will actually be, before just assuming what they will be. Because, as far as I know, the city has not released anything.

You can already go online and get an estimate of your taxes . . . I'm not jumping the gun. I'm definitely going to wait to see what happens. My taxes have gone up every year that I've been here and I'll wait to see what happens. When they go up and the wage tax doesn't come down (because it's not going to) I'll rent my house and wait to see what happens. If things don't moderate in a few years I'll sell.

Also, the city will be receiving nearly $100 billion from these tax increases. $100 Billion. That's a lot more money to do a lot more things that they couldn't do before.

Ha! No. Not even close. $96.5 billion is the value of all real estate as it's been assessed under the new scheme. The city will see an increase in revenue from it, for sure but you might want to move that decimal point three places to the left . . . and if the wage tax came down there wouldn't actually be any increased revenue. In reality, a lot of people are going to see their property taxes 300-500% and wage taxes are going to go down by 0.1%.

[drive carephilly]

Originally Posted by bryson662001

In the suburbs you pay much higher property tax but you don't have the high wage tax and you usually get free and decent public schools. As long as Philly isn't providing the schools and is charging the wage tax it isn't fair to raise the property tax.

It would be better to cut services to the poor and encourage them to move someplace else.

to the suburbs!

[jtom605]

Originally Posted by Summersm343

So your making your city better by living here and being a tax paying citizen. Your paying less than what you should, and much less than the suburbs, and now the the city wants to raise taxes to WHAT THEY SHOULD BE in order to get more money (because they are cash strapped as it is, to say the least), and you just want to pack up and leave? Like you wouldn't have been paying more in the suburbs all this time anyways?

Why don't you wait to see what your taxes will actually be, before just assuming what they will be. Because, as far as I know, the city has not released anything.

Also, the city will be receiving nearly $100 billion from these tax increases. $100 Billion. That's a lot more money to do a lot more things that they couldn't do before.

Whether the city government will use that money effectively and efficiently is an entirely different and perhaps more important question.

This article explains why AVI is needed,

After years of debate, there should be no question that, right now, real estate taxation in Philadelphia is unfair and haphazard. Examples of the consequences of this unfairness are striking. Consider two homes that sold recently for dramatically different amounts—a house in Southwest Center City sold for $480,000; a house in Northeast Philadelphia sold for $88,500. The home that sold for $88,500 actually faced a $1,494 tax bill while the home that sold for $480,000 only paid $1,311.

This situation forces some to pay more than their fair share and shifts development and growth toward neighborhoods where the assessments are lower than they should be because buyers can afford more house in areas where tax bills are relatively low. So, residents of the Northeast and Northwest Philadelphia are paying too much effectively to subsidize growth in and around Center City.

[RightonWalnut]

The phasing out of the wage tax is supposed to continue in 2014 when AVI is initiated.

The entire point of AVI and new property taxes is to make the city more business friendly by in turn reducing the wage tax and the business privilege tax. You think the city wants to just enact AVI, raise property taxes and be done with it? ... and lose residents again, after the city is finally getting back on it's heels? I think for once, this administration is smarter than that. The city has an unfair property tax system, and something has to be done about it.

Beginning in 2014, the city plans to resume planned wage tax cuts that had been delayed when the recession hit. Last year, Council and mayor enacted bills that will give big tax breaks to small businesses beginning in 2013, as well as an across the board tax cut on the gross receipts tax that starts to phase in during 2015.

Fiscal reform in Philadelphia faces a taxing problem | PlanPhilly: Planning Philadelphia's Future

[RightonWalnut]

Originally Posted by drive carephilly

I support reforming property taxes and as I've already said twice - I don't mind paying more. But actual value should mean just that. Actual value. The last sale price x annualized inflation. Whatever the changes are they should be fair. Having the Cira Centre and Comcast Bldg. exempt from property taxes, BPT, Net Profits, etc. is not even close to being fair.

They don't pay taxes because of the city's (and the state's) terrible business tax structure. Without those tax cuts, those buildings would not be there, and those jobs would likely be in the suburbs. The city has the business privilege tax and the wage tax that AVI is supposed to help reduce. Also, talks have been going on in Harrisburg to change the state's tax system. Right now, in Pennsylvania, municipalities cannot tax businesses and residents at different rates... ... you can in every other state. There is attempts to change that.

[drive carephilly]

Originally Posted by Summersm343

They don't pay taxes because of the city's (and the state's) terrible business tax structure. Without those tax cuts, those buildings would not be there, and those jobs would likely be in the suburbs. The city has the business privilege tax and the wage tax that AVI is supposed to help reduce. Also, talks have been going on in Harrisburg to change the state's tax system. Right now, in Pennsylvania, municipalities cannot tax businesses and residents at different rates... ... you can in every other state. There is attempts to change that.

Of course! Look at what the tax abatement did for residential development. Everyone loves a tax holiday.
But I would argue that the tax structure is terrible precisely because it redistributes wealth to people and companies who already have it.

This is not revenue neutral. It's a tax grab and it's going after the people who already do what they're supposed to do. Meanwhile . . . Tax Delinquent Properties in Philadelphia | PlanPhilly: Planning Philadelphia's Future

There's $500 million in revenue right there.

I do appreciate your earnestness. If it were up to me I would first cut the back taxes owed down to $250 million before I raised taxes on anyone and I would only use that to pay down city debt. Then I would reassess my budget, cut the wage tax down to 2%, eliminate gross receipts and cut net profits to 5%. I would use the formula I put forward (in use in plenty of other jurisdictions) to raise property taxes to make up the difference.

I would continue to cut net profits down to 3.5% but leave everything else the same. Lowering is fine. It should happen . . . but eliminating the wage tax and BPT is a move that's much better for suburbanites who want to work or do business in the city. It's total elimination is not automatically good for the city or the people who live here. Just look at how a lot of suburbs have fared with the loss of revenue through the foreclosure crisis. Cities shouldn't be over-reliant on any one source of revenue. Old people are just as important to the fabric of the city as wage tax paying families and part of the benefit of living in the city past retirement is that a huge part of your tax burden disappears. It would be silly to think that there are enough 20 somethings out there eager enough to rent in the city that they're going to make up for a smaller senior population due to higher property taxes.

Anyway, hypothetically, If jobs suddenly magically started to materialize at a rate faster than they were already I would take the next 5-10 years to cut the wage tax down to 1% and net profits down to 2.5% and hope that all this supply-side nonsense actually increases revenue (but since it won't) then raise property taxes if necessary to make up the difference.

[GraysFerryB4]

I always saw this as the "trap" of the ten year tax abatement. Ten years goes pretty fast and the cost of a family to go from $100 per year to the AVI of even $1500 a year can take a huge bite out of families that also have to pay for private and Catholic schools. When I think of newer developments like those at Packer Park (Reserve, Villas) who, in addition pay an HOA fee, I feel like NJ was the right choice.

[mancat100]

If they try to raise taxes without first collecting the hundreds of millions of dollars in unpaid taxes, fines, bail and fees, the taxpayers should go into open revolt. And when I say revolt, I mean that in the most horrific possible sense.

Just the idea of letting scofflaws go and then pursuing the honest people for an even bigger bite makes my blood boil. It's patently unjust and should in no way be tolerated or submitted to.

[GraysFerryB4]

Ever had to go to City Hall for an issue? It's just done that way. The good people always pick up the slack for the ones who don't pay.