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Philadelphia Property Tax Hike Proposed

by Tom Branham, Washington D.C., May 2020

 

Higher taxes, salary cuts, and reductions for city programs are under consideration as Philadelphia tries to fill a $649 million budget gap created by the economic uncertainties associated with the COVID-19 pandemic.

 

The news comes as new property assessment notices will be mailed to taxpayers in early-to-mid June.

 

Mayor’s Budget

 

Mayor Jim Kenney trimmed his budget proposal for fiscal year 2021 from $5.18 billion to $4.695 billion to try and accommodate the impact COVID-19 is having on the city’s bottom line.

 

The budget includes:

 

  • Property tax rate increase of 3.95%

  • Parking tax increase of 4.50%

  • Wage tax for nonresident workers increase .05%. The wage tax will not increase for Philadelphia residents who work in the city.

  • Freeze on the current Business Income and Receipts Tax rate

  • Citywide hiring freeze and salary reductions for city employees making more than $35,000 annually

  • $43 million in cuts for programs like the Philadelphia Zoo and the East Market project in Center City

The revised budget requires approval by the City Council.

 

Assessment Notices Issued

 

Assessment notices for Tax Year 2021 were originally scheduled to be mailed in late March but have been delayed by Philadelphia’s citywide shutdown, which is still in effect. The appeal deadline of October 5, 2020 has not been extended.

 

The valuation date for Tax Year 2021 is January 1, 2020 so the economic disruptions caused by COVID-19 should technically not be considered. All cases are usually heard by the Board of Tax Review by the end of the Tax Year under appeal. However, in the current situation, Board hearings will likely be held in early-to-mid 2021 and the impact of the virus will be impossible to ignore.

 

Appeals going to court previously typically took 12-18 months to get resolved. It will now get pushed out to 18-24 months, given the backlog from the state shutdown.