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Joseph Figurski has strong ties to his house. Figurski’s grandfather purchased the residence on the 100 block of Carpenter Street in the early 1920s and the title was later transferred into the 71-year-old’s name in the 1980s.
Paying $2,300 on his most recent real-estate tax bill, Figurski knows an increase might dramatically impact his annual income of $16,000. That is why an impending reassessment of property values – which may equate to higher tax bills for some residents – has distressed Figurski. He lives in a neighborhood where property values have appreciated and has fears of being taxed out.
"I don’t know how many years I got left," Figurski said. "I would have liked to die in this house."
Through a recommendation by the city’s Tax Reform Commission, the Board of Revision of Taxes (BRT) is gearing up to reassess the city’s 568,000 properties – 440,000 of which are residential dwellings – using full-market valuation, or 100 percent of their market value, and ditching its current method of using only a percentage. Some residents worry this could wreak havoc on future real-estate tax bills, which are determined by applying a tax rate – now set at 8.2 percent – to a home’s assessed value.
City Council members set this rate and have the power to lower it once the reassessments are in place. But homeowners, noticing an upswing in property values, want more assurance they can still afford to remain in the area after the reassessments.
According to the tax-reform advocacy group Philadelphia Forward, a resident whose house has a current sale price of $265,000 and is paying $2,340 in real-estate taxes could see a 116-percent increase, or a new bill of more than a $5,000 yearly, after the reassessment.
The average city home is assessed at 70 percent of its potential sale value, while others may be lower or higher than this figure, according to the group.
Brett Mandel, executive director of Phila-delphia Forward, viewed the reassessment as a need for the city, but would like measures implemented to ease residents’ burden.
Figurski attended the Council hearings on the matter held at the request of First District Councilman Frank DiCicco.
"I spoke up for the older people," Figurski said. "They’re going to take a big hit. What do they want to do? Put them out on the street? They worked hard … and now they are going to hit them. Why can’t they give them a little mercy so they can afford to stay in their houses?"
FULL-MARKET VALUATION provides a fairer and more equitable way to assess properties when compared to the current formula, said Eugene Davey, the BRT’s assessments director, who noted assessments are an ongoing process for the board.
Though not in the business of raising taxes, the BRT does plan to make the reassessment procedure "revenue neutral," but only with help from Council members.
"We really have nothing to do with taxes, even though our values are the basis for taxes," Davey said. "We are asking City Council to reduce the millage [tax rate] so property owners in the city may see that their taxes stay the same, go down a little bit or go up a little bit."
Using computer-assisted mass-appraisal technology, the BRT will conduct statistical analysis on each home within an area, taking into account a structure’s characteristics that might retain, increase or lower values, Davey said. Properties then are compared "side by side" and evaluators review values for equity and fairness between each dwelling.
After the reassessment, Davey said 25 to 30 percent of property owners could experience a "small or large" increase in their property tax bills. The markets that are now lower than their actual value might experience the heftier upsurges, he added.
Housing prices in Queen Village, for example, have increased 65 percent between 1999 and 2004 due to the neighborhood’s appeal, according to the Queen Village Neighbors Association Web site.
Carla Puppin, the association’s director, has received several calls from concerned residents dreading a potential tax hike. She plans to hold a meeting early next year to discuss the issue in further detail.
"We’re trying to understand as much as we can so we can help residents and give input as a community association," she said. DiCicco, whose district includes many neighborhoods with appreciating property values, called the current property tax assessment structure "unbalanced," also noting the reassessments are "something that should have been done a long time ago." However, he soon plans to discuss methods that would soften the blow for residents with Mayor John Street.
"Everyone has to be involved," DiCicco said. "It can’t be administration versus Council and vice versa. We all need to sit at the table and make this work."
Renters also might feel the effect of the reassessments, as property owners will pass on their added costs, DiCicco said.
Councilman-at-Large James Kenney, who noted the city already collects exorbitant amounts of real-estate taxes, does not understand the urgency. He would like to further discuss safeguards to protect long-term residents in neighborhoods now experiencing a rebirth.
With Council elections under way next year, John Furey, president of the Broad Street West Civic Association, hopes its members can settle the tax-rate issue sooner rather than later.
"I hope they don’t stall until after they get elected and [in the meantime] not worry about it," he said. "They’re going to have to study that and keep it minimal so the increases are not clobbering people."
Ideas to mitigate the effects of higher real-estate taxes have been tossed around Council, including tax-hike caps and the phasing out of the city’s 10-year property-tax abatement on new construction.
DiCicco, who initiated these laws, credited the abatement for repopulating blighted neighborhoods with new residents contributing to the city’s sales and wage tax.
While he would consider engaging in conversations about adjusting the abatements, he said Council should remain united in its efforts to find a solution to the bigger issue.
"I think it’s the role of Council to work with the administration, with the BRT, to find those mechanisms and tools to make this as painless as possible without any significant or severe" tax increases to residents, he said.
Calling the reassessment a "very complicated issue," Council President Anna Verna would like the BRT to delay their task. She said Council is currently waiting on data from the BRT before members can determine the new millage.
"I think we would really be deluding ourselves to think that we’re not going to have some sort of tax increase, but it certainly should not be four times what you’re presently paying," she said.
Resident Fab Fusaro has more of a gripe with the city’s tax burden than he does with the BRT’s plan.
"I don’t have an issue with the reassessment," he said. "My real issue is that between wage tax and real-estate tax, we’re going to be the highest-taxed people on the East Coast."
