If you live in
Part of the reason is that the Nutter administration is going to be working hard this year to institute the Actual Value Initiative (
The other reason emerged this week during City Council hearings on the budget. City Finance Director Rob Dubow admitted, under questioning by Councilman Bill Green, that on top of reassessment, the city is going to try to extract an additional $200 million, in real estate taxes, presumably by fiddling with tax rate itself. Click to read Jeff Shield's piece on it.
This huge
So, it won't be revenue neutral at all. It will include a backdoor tax increase.
The Nutter administration already has a 10-percent increase on the real estate tax rate this year (2011.) It was supposed to be temporary and, in a way, it will be. The 10-percent increase will expire, to be replaced by a 20-percent increase.
My experience has been that if you talk about real estate assessment methodology for more than 20 minutes your teeth will ache. To use an old journalism phrase, it's a
So, let's step through it quickly by using an example of a nice, hard-working couple who own a rowhouse in
Right now, we pay $2,918 in real estate taxes -- a figure that includes Nutter's 10 percent 'temporary' increase.
The city arrives at this rate thusly: It determines the market value of my home and multiplies that by 32% to come up with the assessed value. It then levies a 9.8 percent tax on that assessed value. For you math freaks, the formula is: Market Value x .32 = Assessed Value x .0982 percent = $2,918.
The city uses the same formula for all taxpayers.
Under this system, it means that the city has determined that my home has a market value of about $93,000. Which is ridiculous. It was worth that once -- but that was 25 years ago, when I bought it.
Recently, as part of a loan application, I had a professional appraisal done and its market value was put at $415,000.
The goal of
If they did that -- and kept the same tax rate (of 9.8%) -- my tax bill would rise to from $2,918 a year to $40,700 a year. Of course, I would not have to pay it because I would drop dead of a heart attack when I opened the bill.
It was always envisioned, as part of
That doesn't mean I would still be paying $2,918. My taxes will go up to reflect the increase in market value over the years. One figure bandied about is to tax property at one percent of its new full
Not everyone's value has risen as much as mine. One expert I talked to estimated that one-third of the properties in the city will go up significantly under
If you want to imagine which areas will get hit the hardest, just look at the zip codes where the price of homes have risen the most in the last 10 years. You know who you are.
What the Nutter administration is saying is that on top of this
And it will happen all in one year. Gulp.
By trying to extract more money from the real estate tax by this method, the mayor has managed to screw the pooch when it comes to
It was going to be a tough sell to begin with -- people don't like nor do they trust this finagling with their property values -- now they are inserting a guaranteed 20 percent tax increase on top whatever damage
By the way, some of these numbers -- such as the tax rate, the market value of my home as determined under
But, I'm still screwed. And so are you and you and you....
-- Tom Ferrick