Philadelphia Wrestling With Expected Impact Of State Ruling On City Tax Formula
By Mike Dunn
PHILADELPHIA (CBS) -- The Nutter administration says it is too soon to gauge the full impact of a ruling by the state that changes how Philadelphia property taxes are calculated.
The ruling could cost the city and the school district millions of dollars.
At issue is what's called the "common level ratio" -- basically, the percentage of market value on which the tax is based.
Property tax bills in Philadelphia have long used a 32-percent ratio. But two thousand property owners this year appealed their bills, arguing that a lower percentage should be used.
Now, the State Tax Equalization Board ("STEB") has ruled in their favor, and set the ratio at about 25 percent.
This means an $18-million hit to the city's coffers, and an additional hit of about $23 million to the school district.
Rob Dubow, the mayor's finance director (far right in photo), says the Nutter administration may fight those individual appeals.
"We want to be able to cross-appeal and say that the market values should actually be higher, which could help reduce that impact," he told City Council during a budget hearing this morning.
Dubow says the mayor's desire to move to a new assessment system in the coming year is made even more urgent by the state's ruling on the common level ratio. The new assessment system uses full market values and makes the common level ratio moot.
City Council must approve the assessment system change, and some of the lawmakers have voiced concern about approving the switch before the actual assessments are complete.
In the short term, Dubow says the $18-million hit in the current fiscal year -- if it holds -- will be rolled over into the coming budget.
There was no immediate comment from school district officials.
