Something really interesting happened last week that’s going to have a big impact on school funding and education in the city generally. It had to do with a big debate over local taxes spurred by a number of factors, one of them being a recent property value reassessment that saw property values rise exponentially. In some places, they more than doubled. (My house doubled!) The increase means that homeowners will pay a lot more on their yearly property tax bill and landlords will pass the increase along to their renters, increasing housing costs. It’s a big deal.
After lots of serious critiques and complaints, the city is trying to figure out whether/how to ease this property tax burden and still have enough in its coffers. Options have included redoing the assessments or increasing certain kinds of exemptions that give people a break on a certain amount of the property's value if they live in it as a primary resident, like the homestead exemption. At the same time, the city is figuring out what to do in the wake of the pandemic crisis that’s both ‘over’ and also still ongoing. The question is: how should the city get the right amount of revenue to run itself? Who should be taxed and how much? The property reassessment is part of that.
The property tax increase hits everyone, though perhaps disproportionately middle and working class people who spend a big portion of their income on housing. Historically, while these kinds of taxes go up, taxes on the ruling class—rich people that can more than afford it, but prefer not to be taxed—don’t. The city’s Chamber of Commerce is their advocate as they push for tax cuts on businesses, like the business income and receipts tax (BIRT) and the wage tax. The whole local tax question tends to be kind of one-sided in that way, favoring the rich who can buy politicians, threaten to take their capital out of the city, or even, in the case of Allan Domb, serve on city council while being a real estate mogul.
But this year was different. Thanks to the work of a new-ish left revenue group, Tax the Rich PHL, led by the inimitable Arielle Klagsbrun of the Action Center for Race and the Economy (as well as local labor leaders, Philly POWER Research, Neighborhood Networks, Philly DSA, and others), the debate this year has been far from one-sided. Tax the Rich, partnering with the PA Budget and Policy Center, has put out reports on and proposals for on a wealth tax on intangible assets, championed by the amazing socialist city councilmember Kendra Brooks (which even inspired a visit from Elizabeth Warren). Marc Steir and Eugene Henninger-Voss find that such a tax on .4% of intangible wealth in the city would generate $200 million a year for the city.