On Thursday, March 5th, Philadelphia Mayor Michael Nutter announced his eighth and final annual budget proposal in front of the City Council. The proposal included a major 9.3% property tax increase for city residents in order to provide increased funding for specific city services and public school services.
“The homeowners, taxpayers, parents, [and] city officials have just one big decision to make,” Nutter explained to the Philadelphia Tribune following his budget proposal. “Do we want to better educate our children?”
Nutter’s annual budget is reportedly about $3.9 billion, with a $105 million increase in public school funding. The increase, the Tribune explains, would be covered by the proposed 9.3% property tax increase (raising the city’s property tax rate from 1.34% to 1.4651%).
Under the proposed tax increase, the median residential property owner would see an increase of about $104 in annual property taxes. The median commercial property owner would reportedly pay about $450 more.
Although Nutter has explained that he “didn’t want to raise property taxes” for city residents, he believes that the cost of education warrants such an increase. The Philadelphia School District is already expected to have a deficit of about $80 million for the 2015-2016 school year, causing many education experts to state that increased city funding is absolutely essential for providing better public school education in the future.
As the National Mortgage Professional Magazine states, this property tax increase would be the third increase in five years, under Nutter.
Unsurprisingly, there has already been significant backlash against Nutter’s proposal, and numerous lawmakers and residents alike have noted that there are plenty of other funding options that haven’t been explored yet.
Allan Domb, the president of the Greater Philadelphia Association of Realtors, was cited by National Mortgage Professional Magazine as “challenging” the city to find increased education funding through means other than property tax hikes. According to Domb, the city hasn’t been putting enough effort into collecting delinquent taxes on property, sewer, water, and other utilities.
“The increase in property taxes for Philadelphia residents may offer another compelling reason for people to rent for a while longer before entering the housing market,” says Svetlana Mosyurova, Marketing Director, Post Brothers Apartments.
Although the proposal is far from being approved or denied, individual council members have stated that Nutter’s proposal likely won’t pass — increased funding from property taxes would certainly provide an immediate solution for education funding, but it provides very little in terms of long-term results.
“A property tax increase? Please,” Councilwoman Jannie L. Blackwell stated. “I don’t think we’re going to consider going that way.”
Councilman Mark Squilla echoed Blackwell’s sentiments as well. “The easy way out is just to raise a tax,” Squilla explained after the proposal was presented. “I can only speak for myself. But I can’t see asking for a 9% tax increase on real estate a something that would fly.”