City council votes to increase business and property taxes
6/26/2012 | Real Estate Blog
Costs will soon rise for businesses in Philadelphia, after the city council opted to raise business and property taxes last week. The decision was make last Thursday to implement a budget which collects almost $40 million more for the School District, which is all but insolvent. Each proposal is projected to raise $20 million for the district.
Businesses will face, as part of the new budget, a 3.6 percent increase in property taxes, and a 19 percent increase in the Use and Occupancy tax, totally to an average increase of $49 for the annual tax bill of $1,358. Local businesses had vehemently opposed the increase in the Use and Occupancy tax, but support came through in the final hours of negotiation over the tax controversy.
The decision means that Mayor Nutter’s effort known as the Actual Value Initiative will be coming to an end. That initiative would have implemented a system where properties are taxed based on their actual market value, and would have reduced taxes for many commercial and industrial properties which have historically been over-assessed. The initiative, according to Nutter, would have brought in $94 million for Philadelphia schools.
The new measure, plus two years of temporary tax hikes, requires taxpayers to pay 18 percent more on their property than they did in 2011.
The decision to not implement the Actual Value Initiative, in the mind of many, leaves the city with an inequitable and broken system. It remains to be seen how the situation will be resolved.
Source: Philadelphia Inquirer, “Philadelphia Council opts to raise business and property taxes,” Troy Graham and Bob Warner, June 23, 2012