Actual Value Initiative

[JasonMcElroy]

Are you paying less total taxes or is it that for the same or slightly more, you are buying a school district you feel you can send your kid to?

About $3K less per year after considering local income tax and municipal/school taxes. As you noted, it was more about better schools for our son who will be of school age soon. Neither of us work in Philadelphia, so paying wage tax was particularly painful.

It pained us to make this decision. We love our house and our neighborhood and this city, for all its ills. We'll be close enough (only 5mi from our current house) to continue raising our children with our friends and neighbors and to do all the things we currently do in town.

Jason

[seand]

[Neither of us work in Philadelphia, so paying wage tax was particularly painful.

That would do it. Makes sense.

[tintin19119]

Agreed.

I think there will be a lot of people moving out of the city if AVI is instituted with a millage rate of 1.8% (if they can actually sell their house with its inflated tax bill). AVI makes sense if the millage rate is down at 1.1% or 1.2%. The city needs to go after deliquent taxes. It is a disgrace that there is over $500M in unpaid taxes and fees that the city is making little to no effort to collect.

You can add 250M in unpaid EMS 911 services.You have people calling 911 for nose bleeds to colds. They are taken to the hospital by medic and then ignore the bill from the city.

[billy ross]

Are you factoring in the suburban wage taxes? Most suburban jobs and residential centers have a 1% wage tax, and the trend lines on these have been strongly up. Havertown is thisclose to instituting a wage tax for the first time, for instance.

Also, driving 5 miles across a metro can be a daunting task. The suburban traffic 'flow' is awful.

About $3K less per year after considering local income tax and municipal/school taxes. As you noted, it was more about better schools for our son who will be of school age soon. Neither of us work in Philadelphia, so paying wage tax was particularly painful.

It pained us to make this decision. We love our house and our neighborhood and this city, for all its ills. We'll be close enough (only 5mi from our current house) to continue raising our children with our friends and neighbors and to do all the things we currently do in town.

Jason

[JasonMcElroy]

Are you factoring in the suburban wage taxes?

Of course. I believe that would be covered under "considering local income tax" from the very first sentence of my post.

Also, driving 5 miles across a metro can be a daunting task. The suburban traffic 'flow' is awful.

Sure is. Good thing I work from home.

Jason

[Cro Burnham]

i can't help but notice that seand and billy ross are perpetually grabbing at straws to rationalize why avi really isn't that bad. but now it seems billy ross is finally sensing the impending doom too. seand, you are in la la land if you think avi is not going to be a growth killer.

whether deliberately or not, the net effect of avi will be to make the city more affordable for the poor and less affordable to the middle+ classes not employed by the city. these people will a) leave or b) not come if they already don't live here. bad news.

not all chicken littles are wrong.

for crying out loud, billy, please quit with the comparisons to new york and boston. philly is just not in the same economic league with these places. the comparisons are completely irrelevant. the applicable comparisons would be with baltimore, cleveland, milwaukee, pittsburgh, st louis: smaller cities to be sure, but more similar to philly demographically and economically.

[seand]

I'm not grabbing at straws to say why AVI is not that bad. AVI is a good idea and ultimately the only fair solution to property taxes - period.

AVI (or some other similar system where assessments are based on actual sales prices of equivalent properties) is the only fair solution to do property tax assessments. Its the same basic idea you will find in most neighboring suburban municipalities that you might move to as an alternative. Taxing property relative to what its actually worth is the right way to share the burden.

AVI is not the problem. A city that doesn't live within its means, thats crippled by the burden of pension debt is the problem. An overall high tax burden, no matter whether that comes in the form of wage taxes or property taxes or sales taxes is the problem.

Complaining about AVI is like you think the speed limit is too low and you are complaining that the cops got new, more accurate speed detectors when the old ones used to randomly say a car going 75 was going 55 and a car going 25 was going 40. You may be right. The speed limit might be too low, or the tickets excessive but the radar detector that accurately states a car going 75 is actually going 75 and car going 25 is actually 25 is not the problem.

I think the future of Philadelphia has a lot to do with things in the background - business taxes and how cumbersome City Hall bureaucracy is, fixing Philadelphia's schools, the ability of City Council and the Mayor (including the next one) to face down the pension issue. But having an assessment tool that accurately states a $120k house is actually worth $120k and $300k house is actually worth $300k is not whats going to tip it either way.

You have to learn to seperate "as assessment that reflects reality" from "a city with an overall high tax burden". The former is fundamentally a good idea, the second has nothing to do whatsoever with assessments.

[seand]

Opposing AVI is sort of like opposing rulers that accurately always measure 3'5" as 3'5". Accurate measurements are not the problem. How those measurements translate to an overall tax burden is the problem.

[robot]

Opposing AVI is sort of like opposing rulers that accurately always measure 3'5" as 3'5". Accurate measurements are not the problem. How those measurements translate to an overall tax burden is the problem.

Of course you are right that AVI is the only fair way to tax property, it is just that most people object to the amount that there property tax will increase. They say that some people's taxes will come down, but I don't know anyone in that situation.

For me, one of the good things you could say about Philly was that our property taxes were low. Sure the schools suck and we have a wage tax, but at least we don't pay 10k a year in taxes.
After AVI we will still have the schools that suck, the wage tax, but now our property taxes won't be low anymore.

[billy ross]

Our family was paying almost $13K a year in wage and property taxes. And getting nothing (except a beautiful park system, Billy Ross) for it but trash collection.

We bought a house and are moving just outside the city in two weeks.

People can say it's not happening until they're blue in the face, but there are undeniably people who are leaving based on the taxes/school issue. I see and hear about it frequently in our neighborhood. And these are people who love the city, are involved in local civic groups and schools and would otherwise love to stay where they are. The problem is real whether some people think "we get a pretty good deal" or not.

Jason

You must make a tremendous amount of money if you're paying almost $13k per year in combined wage and property taxes but less than $2k per year in property taxes. That translates into an income of a little less than $300k. Congrats. Not many people are at that level.

[Debbie1125]

Aggressive attempts should be made to collect that $515 million owed by delinquent property owners....THEN proceed with AVI.

I still think it's a tax increase and will cause a further exodus of the middle class tax base out of Philly. But if everyone agreed with everyone else this would be a dull world.

[seand]

No doubt about it. Under AVI, solid blocks in marginal areas will look like a much better deal than overpaying in an area thats already trendy. It may spread out gentrification more evenly. That by itself is only going to slightly alter the pattern of gentrification, but not stop it in its tracks. Whether Philly attracts businesses and grow jobs is what matters over the long haul.

And I agree 150% we need to get much better at collecting from delinquent property owners. Its inexcusable not to. But thats a long, slow fix in all likelihood. I'm all for demanding progress on collection but sometimes the BEFORE sounds like a distraction. Its horrible that we are so dramatically worse than comparable size cities at collection. Unexcusable. But also, no rust belt city thats lost as much population as us bats 100% on this. There are some properties for which there is no current market - period. But thats no excuse for not auctioning the ones there is any market at all for, much, much sooner. The truth is that we have to do dramatically better but some portion of that $515 million is a mirage. In the real world some unknown portion of that is uncollectable.

[MariusPontmercy]

No doubt about it. Under AVI, solid blocks in marginal areas will look like a much better deal than overpaying in an area thats already trendy. It may spread out gentrification more evenly. That by itself is only going to slightly alter the pattern of gentrification, but not stop it in its tracks. Whether Philly attracts businesses and grow jobs is what matters over the long haul.

And I agree 150% we need to get much better at collecting from delinquent property owners. Its inexcusable not to. But thats a long, slow fix in all likelihood. I'm all for demanding progress on collection but sometimes the BEFORE sounds like a distraction. Its horrible that we are so dramatically worse than comparable size cities at collection. Unexcusable. But also, no rust belt city thats lost as much population as us bats 100% on this. There are some properties for which there is no current market - period. But thats no excuse for not auctioning the ones there is any market at all for, much, much sooner. The truth is that we have to do dramatically better but some portion of that $515 million is a mirage. In the real world some unknown portion of that is uncollectable.

Fine, collect half. Collect a quarter. Collect SOMETHING. The city isn't even interested. It knows the easy money comes from the taxpayers who already pay in full. The joke's on the city though: those people are going to leave and the city is going to be stuck with a rump population of people that only consume services, they contribute nothing and don't plan to ever contribute anything.

[billy ross]

Fine, collect half. Collect a quarter. Collect SOMETHING. The city isn't even interested. It knows the easy money comes from the taxpayers who already pay in full. The joke's on the city though: those people are going to leave and the city is going to be stuck with a rump population of people that only consume services, they contribute nothing and don't plan to ever contribute anything.

Philadelphia has a huge abandoned property problem, and it doesn't have an efficient mechanism to fix this, because the sheriff's office was mismanaged by John Green for many, many years. Think of it this way. Philly used to have a huge abandoned car problem, but then the cruelly efficient PPA was put in charge of it and now we have zero abandoned car problem. We need to put a similar program in place with the derelict properties. If properties are abandoned or are in the process of becoming abandoned, they go tax delinquent. People don't pay taxes on abandoned properties. We as a city need to come up with a program to 'tow away' properties belonging to irresponsible parties and to auction them off. We already have the model in place; we just need to implement it. That would put an enmormous dent in that $500m number, but much of the dent would be writeoffs. How much would be writoffs we won't know until we implement this plan. Meanwhile the number of foreclosures in Philadelphia has soared recently. Many think this is a sign of poor health in this city, but in reality it is a sign that the sheriff's office is finally starting to do its job by taking properties off of the hands of irresponsible owners. Just be prepared for the number of sheriff's sales in Philly to go through the roof and to stay high for a long time, so much so that it would affect median and average sales prices in this city. I sometimes wonder whether that's why the city has softpedalled this solution. The recent jump in sheriff's sales in Philly would be child's play if we implemented a PPA-style solution to this problem to flush it out in six months to a year.

[Cro Burnham]

Fine, collect half. Collect a quarter. Collect SOMETHING. The city isn't even interested. It knows the easy money comes from the taxpayers who already pay in full. The joke's on the city though: those people are going to leave and the city is going to be stuck with a rump population of people that only consume services, they contribute nothing and don't plan to ever contribute anything.

pretty much sums it up.

fair schmair. i don't care if the cop makes accurate speed determinations
if the cop is already corrupt, overpaid and incompetent. first priority is to fire the ****ty cop and replace with a good one. then worry about the radar accuracy.

priority is addressing the real problem, not the fairness of one small part of the problem.

[NickleDimer]

Havertown is thisclose to instituting a wage tax for the first time, for instance.

...thisclose for 25+ years. Also, every proposal recommended requires that any wage taxes would be used dollar for dollar to reduce property taxes. So it would most benefit low earners with lots of property (elderly and landlords) and hurt renters and young homeowners.

[JasonMcElroy]

You must make a tremendous amount of money if you're paying almost $13k per year in combined wage and property taxes but less than $2k per year in property taxes. That translates into an income of a little less than $300k. Congrats. Not many people are at that level.

I don't know where you got the "less than $2K in property taxes" unless you looked me up, which is a little stalker-ish, but you're right: we make a comfortable living and make no apologies for it. I overstated our total bill, it's more like $11K.

Jason

[Kukla65th]

I'm going to restate something I said earlier that I think warrants reconsideration, not as a cure-all, but as something that should be an important discussion this year and likely won't be: the wage tax goes down, property taxes go up - people don't get as upset, and some may not move out. For years you heard "Philly needs to be more like other cities and shift the onus of its revenue off of wage taxes and onto property taxes". No one ever suggested gutting people's earnings and then kicking them in the a$% with much higher property taxes and then leaving it that way.

If the AVI discussion doesn't push middle/upper income citizens of the city into high gear confronting elected officials and having protests, then nothing will.

There were protests against the stoppage of wage tax decreases proposed over a decade ago - those protests worked, allowing wage tax cuts to continue until 2008. It's time to turn out in big numbers again - that's the only thing that wakes up council.

These times highlight further the lack of senior senator, etc. in Harrisburg working for us - I hate to say I miss Fumo, I don't, but he did get things done out there from time-to-time. There needs to be a substantial push from state legislators in some way to a) demand the city collect more of its delinquent property taxes, and b) demand AVI not be reckless.

[MariusPontmercy]

I'm going to restate something I said earlier that I think warrants reconsideration, not as a cure-all, but as something that should be an important discussion this year and likely won't be: the wage tax goes down, property taxes go up - people don't get as upset, and some may not move out. For years you heard "Philly needs to be more like other cities and shift the onus of its revenue off of wage taxes and onto property taxes". No one ever suggested gutting people's earnings and then kicking them in the a$% with much higher property taxes and then leaving it that way.

If the AVI discussion doesn't push middle/upper income citizens of the city into high gear confronting elected officials and having protests, then nothing will.

There were protests against the stoppage of wage tax decreases proposed over a decade ago - those protests worked, allowing wage tax cuts to continue until 2008. It's time to turn out in big numbers again - that's the only thing that wakes up council.

These times highlight further the lack of senior senator, etc. in Harrisburg working for us - I hate to say I miss Fumo, I don't, but he did get things done out there from time-to-time. There needs to be a substantial push from state legislators in some way to a) demand the city collect more of its delinquent property taxes, and b) demand AVI not be reckless.

For what its worth, the reduction of the wage tax is supposed to resume soon. I think next year?

[ArcticSplash]

For what its worth, the reduction of the wage tax is supposed to resume soon. I think next year?

I think it's still frozen but I didn't read the whole flurry of measures passed last week that completed the budget. Revenue will post the rate here before too long: City of Philadelphia | Revenue Department

The reductions were microscopic in amount when they were going on, hardly anything that people could really feel no matter your income level.

I was wondering why Council retitled the BPT back in May (it's now the Business Income and Receipts Tax or BIRT, the City of Philadelphia | Revenue Department). I'm wondering if all the speechifying touching on the "privilege" in BPT was wearing thin.