Glenn, While the fact that the city needs additional revenue is obvious, any changes to the property tax structure have to be made with careful deliberation as to the consequences of dramatic increases. A property tax has the potential to be very oppressive, because it taxes an asset whose value exists only on paper until it's sold (called unrealized gain). Even the dreaded Internal Revenue Service does not tax an asset until it's sold; whether it's a home or a stock, the IRS bases its tax calculation on realized gain-- what the seller actually received at sale. The value of a stock isn't taxed every year that it's owned; it's taxed only when it's sold and when the seller has the money to pay the tax. But as long as an owner is living in a house, there is no relationship between the current value of the house and the owner's ability to pay an annual tax based on that current value. The result would be a lot of people losing their homes because the value went up on paper, creating a tax bill that they can't afford to pay. In the case of landlords, they'd pass the increase on to tenants, making rents exhorbitantly high. If the City wanted to have a property tax based on initial purchase price, with a small percentage increase each year thereafter, I would have no problem with that. Or based on square footage, lot size, whatever. Or if they wanted to raise the wage tax, I'd have no problem with that because that would be based on what I earn; I would have the money to pay it and it would be withheld so I would never even see the money. If the City wants to levy a tax on the gain when a house is sold, I have no problem with that. Same with a sales tax. There are many ways to tax based on money the taxpayer actually has.No one wants to be forced to sell their house because they can't afford to live in it anymore.
Date: Sat, 3 Jan 2009 18:09:01 -0500From: glen...@earthlink.netto: mlam...@aol.com; univc...@list.purple.comsubject: Re: [UC] Taxation and the libraries It's how the City will operate in the future. For that, we need fair and appropriate taxation. Those of us who can afford to pay more, will probably not be happy living in a city where we have spare cash, but some folks living nearby don't have libraries or other city services. We need to think long term here. Unfortunately, but realistically, taxes are a really important part of the equation.Bravo Melani!I haven't studied the merits of the local taxation plans and details as you have, but you're points are right on the money. And what you say about fairness in your closing is applicable to the regressive tax structure, which has been hurting our fellow Americans and our city at an alarming rate over the past 30 years.Thanks for taking the time to organize these examples for us.I am not so sympathetic to the mayor as you. The process he engaged suggests that he is not working for the fair , more egalitarian society, that you and I believe in. (You know I react strongly to unfair undemocratic processes) This vision for society is very different than the vision of separating the UC district from the rest of our city. Great post.Glenn -----Original Message----- From: mlam...@aol.com Sent: Jan 3, 2009 1:57 PM To: UnivCity@list.purple.com, pf...@ccat.sas.upenn.edu Subject: [UC] Taxation and the libraries The fate of the 11 libraries is now before City Council. Mayor Nutter had to make some tough decisions to balance the City's budget, and the library closing choice seems to have been a particularly poor one. But, Mayor Nutter is not the villain here. Our city's tax structure is a more likely candidate for that role. It is totally out of whack and unreasonable in many ways. And City Council has a large role in our tax problems.My 2009 Philadelphia property tax bills came a few weeks ago, and when I look at them, the City's financial problems become somewhat more understandable. For my large stone house on 46th St. (counting the apartment in the rear, it has 14 rooms), my tax bill for 2009 is just $3306. Further, looking at the Board of Revision of Taxes (BRT) web site, I see that I've been paying that same amount since 2003 - if not earlier; the web site only goes back to 2003. Though of course, the City's costs have gone up every year.My sister in law who lives near Princeton (in Plainsboro, NJ) told me last week that the taxes on her much smaller 7 room house are about $12,000 a year. The City certainly needs to become more efficient and accountable in its spending. I have stories, and I'm sure many others on the listservs do also, about employees not doing their jobs and/or not being given a very rigorous workload. But in addition to demanding cost-cutting and streamlining from City departments, it may be time to face the likely reality that it's simply impossible for the City to function professionally and take care of its citizens' needs in 2009, on the amount of tax money it is currently billing.I've heard quiet rumblings about property and wage taxes throughout the library battle. Folks are beginning to feel that the City should be asking those of us who can afford it, to pay a little more. This sounds reasonable to me. But City Council would have to raise the tax rate, and expecting them to handle that quickly and conscientiously is perhaps unrealistic.Taking a step backward here, City Council and the BRT have joint responsibilities for taxation, and they have been grappling with - well actually, trying to avoid grappling with - another property tax situation for several years now: currently, our taxes aren't equal or fair, based on our property values, though the law requires them to be. Right now, neighborhoods with lower property values pay disproportionately high taxes, compared to neighborhoods with higher values - including University City. For example, in November, 2005, a buyer of mine bought a 3-story row house in Mantua, in the 700 block of NORTH 43rd St. (north of Lancaster) for $40,000. The block was shaky, and the house needed just about everything. The taxes for that house were $550. Checking up on it now, I see that the City has INCREASED that homeowner's taxes in 2007. Now he pays $592.Meanwhile, on the 400 block of SOUTH 43rd St., the BRT's records show a 3-story row house which sold 4 months later, in March, 2006, for $450,000. Its taxes also went up after the sale - from $1745 to $1878. Property taxes are supposed to be based on property values! Rounding off the numbers a bit, shouldn't a house selling for $450,000 be taxed at ten times the amount of a house selling for $40,000? If North 43rd St. is paying $592, shouldn't South 43rd St. be paying $5920? Or if South 43rd is paying $1878, shouldn't North 43rd be paying $188? That's the BRT's part of the equation - to get the assessments accurate, actually based on the current sales prices for the locations.But then, City Council needs to change the rate. Under the "Actual Value Initiative" (the plan to set the assessments accurately), the idea was that the rate would go down, because the City wasn't trying to collect a huge new amount of taxes - it was only trying to get the taxes to be fair, so that the folks in Mantua would be paying at the same percentage of property value as the folks in University City. The end result was supposed to be revenue neutral - not a huge tax increase city wide. Some folks would pay less, and some folks would pay more, but all would be taxed fairly and the City's receivables would be the same. The South 43rd St. tax bill wouldn't go up to $5920 - though it would go up some, as would taxes in Society Hill, Chestnut Hill, Rittenhouse Square, etc. After a long, long lead-up, the BRT has been working on the valuation, but City Council has not been very brave about preparing to set a new rate. After all, the owners of the higher-priced properties squawk louder than the row house owners in Mantua, and Council members need to be concerned with their voters' reaction, worried about the next election. An organization called Philadelphia Forward (http://www.philadelphiaforward.org) has been working on this issue for years already. They have the facts & figures for City Council to look at. They & the BRT have given City Council all sorts of information on how other cities handled the transition as they updated taxes that had gotten way out of whack. It's important that the elderly, folks on fixed incomes, and others in special situations aren't forced out of their houses if the plan for fair taxation is implemented. But there are ways to avoid this.If we property owners in University City want to help save the 11 libraries - if we want to live in a city which meets its citizens' needs, which isn't devolving into something like a third world slum - I think we might want to consider urging Councilwoman Blackwell and her colleagues to act on the Actual Value Initiative, and from there, consider using a new tax rate that will give Council and Mayor Nutter the ability to keep the libraries open. It's not just balancing the budget for the rest of the current fiscal year that we need to worry about. It's how the City will operate in the future. For that, we need fair and appropriate taxation. Those of us who can afford to pay more, will probably not be happy living in a city where we have spare cash, but some folks living nearby don't have libraries or other city services. We need to think long term here. Unfortunately, but realistically, taxes are a really important part of the equation.- Melani LamondMelani Lamond, Associate BrokerUrban & Bye, RealtorPA License Number AB048377L3529 Lancaster Ave., Philadelphia, PA 19104cell phone 215-356-7266 - office phone 215-222-4800 #113**************New year...new news. Be the first to know what is making headlines. (http://www.aol.com/?ncid=emlcntaolcom00000026) ---- You are receiving this because you are subscribed to the list named "UnivCity." To unsubscribe or for archive information, see .
