Does Michael Nutter’s Property Tax Stand a Chance?

Philadelphia City Council | Photo Credit: City Council’s Flickr page

It’s never easy for a mayor to sell a tax hike.

So the fact that Mayor Michael Nutter is asking City Council to raise property taxes by 9 percent to help fund Philadelphia’s cash-strapped schools as 15 of 16 Council members are running for re-election is fairly gutsy. Oh, and he’s also proposing this after property taxes have gone up three times during his tenure. And a year after the first round of property tax bills went out under his Actual Value Initiative, a citywide reassessment that boosted taxes for some residents.

Is this remotely doable?

It’s going to be a slog at best.

Consider what City Council President Darrell Clarke said after Nutter delivered his budget address in Council’s chambers Thursday:

“This budget was a good budget in terms of some of the targeted investments, but we have to talk about our ability to grow revenue beyond taxation. … I hate to keep saying it, but the first response to a challenge … shouldn’t be sticking your hands in the taxpayers’ pockets.”

Or consider what Councilman Curtis Jones, Jr. said before Nutter even gave his budget address:

“It is a heavy lift in an election year, but not impossible. … What we want to do is figure out how to get $100 million to the school district. This is not the only way to skin that cat, and we are going to look at other ways to do it because, quite honestly, after AVI, after several other tax increases, some of my members would find it hard to sell to their respective districts.”

Oooor consider what City Council At-Large candidate Paul Steinke, who raised more money than any other Democratic at-large contender last year, including the four incumbents, said:

“I am glad to see Mayor Nutter make a strong statement on public school funding. However, I am concerned about the impact a 9.34 percent property tax rate increase will have on many Philadelphians. When [AVI] was implemented in 2013, the city said it would need a few years to fully complete a reassessment of properties. Assuming reassessment is ongoing, are some homeowners in for a double tax hike? This needs to be fully explored by City Council.”

A property tax hike would be particularly difficult to support for incumbents who are facing viable challengers. That includes Council members Kenyatta Johnson, Maria Quiñones-Sánchez, Blondell Reynolds Brown, Ed Neilson, Bill Greenlee, W. Wilson Goode, Jr., David Oh and Dennis O’Brien.

One thing in particular would make it easier for them to swallow: if key elements of Gov. Tom Wolf‘s proposed budget passed at the state level. Using money from statewide increases on sales and personal income taxes, Wolf wants to provide hundreds of millions of dollars worth of tax relief to Philly, part of which he would like to use to nearly double Philly’s homestead exemption in 2017.

In a Republican-controlled legislature, the passage of Wolf’s budget is anything but guaranteed. But if it did squeeze through, Nutter said the average Philly homeowner’s property tax bill would actually be lower in 2017 than in 2015, even with Nutter’s proposed tax hike. That wouldn’t make voting for a tax increase in an election year easy, but it would make it easier.