Nobody likes property tax hikes, but the city already protects lower-income homeowners | Shackamaxon

This week’s Shackamaxon covers property tax assessments, state budget negotiations, and Pennsylvania’s gambling dependence.

Philadelphia property owners have by now received one of the least anticipated pieces of snail mail of the year: our assessment notifications. My own home’s value went up by around $30,000, meaning my family will have to fork over another $400 a year to the city and school district.

Ever since Mayor Michael A. Nutter instituted the Actual Value Initiative in 2013, property taxes in Philadelphia have become an increasingly contentious issue. In the past, valuations stuck around for years — whether or not they matched the overall economic climate.

This meant some property owners were stuck paying more than they should, while others were getting a significant break. By switching to AVI, Nutter hoped to create a system that would be fairer. It also ensured city coffers would benefit from investments in neighborhoods.

This being Philadelphia, however, nothing is so simple.

While many of the underassessed properties were owned by people of significant means, like landlords or vacant-land speculators, the city also has one of the largest concentrations of low-income homeowners in the country. While no one wants to pay an additional $400 a year, this kind of increase is much harder to manage for the nearly 100,000 Philadelphia homeowners who earn less than $50,000.

That is why City Council often feels pressure to provide relief. Sometimes, however, the conversation on this topic would lead one to believe the city currently does nothing for longtime, low-income residents who are struggling with higher bills. Fortunately, this is not the case.

The biggest program on offer is the Homestead Exemption, which allows resident homeowners to deduct roughly $1,400 from their property tax bill. For those whose home is worth less than $200,000, they are getting more than half of their bill eliminated. There’s also the Longtime Owner Occupants Program and the senior tax freeze.

City Hall is also helping homeowners keep up with the costs of repairs. Mayor Cherelle L. Parker’s H.O.M.E. Initiative offers $10,000 to help fix problems like leaky roofs, and the Adaptive Modifications Program ensures residents can age in place or adapt to unexpected physical limitations.

Between those programs, the city is spending hundreds of millions of dollars each year on protecting homeowners. That’s more than the combined receipts for the proposed rideshare tax, the soda tax, and the liquor-by-the-drink tax. Renters, who tend to be poorer and more cost-burdened than homeowners, get comparably little support from City Hall.

When City Council returns this fall and considers how to react to rising assessments, the conversation must reflect how much Philadelphia already does to help struggling homeowners.

Even though state senators have been called back for budget votes, there’s still no official word on what will be in the document.

Last year, the commonwealth spent just over $50 billion, while bringing in just under $49 billion in revenue. This meant using money from the state’s reserves — although the Rainy Day Fund, which has around $8 billion, was not touched. Instead, state leaders cannibalized other sources, like the Public Transportation Trust Fund, to pay for services without raising taxes.

The plan Gov. Josh Shapiro unveiled in February proposed around $53 billion in spending. Absent new sources of revenue, this would require tapping into the Rainy Day Fund. It remains to be seen whether Harrisburg will finally act on so-called games of skill. Taxing the machines could bring in around $1 billion per year, which would significantly close the gap between projected revenue and the governor’s proposal.

Still, no one expects the Republican-controlled Senate to approve the full proposal. In the past, they’ve objected to any increase in funding for public transit agencies, for which Shapiro has proposed an additional $300 million. There’s also another $565 million in funding for schools, meant to address a structural imbalance that the courts have ordered rectified. Given the emphasis from Mayor Parker, Council President Kenyatta Johnson, and the city’s legislative delegation on education funding, it’d be a surprise if the final deal did not include a significant increase in support for schools.

The biggest reason not to tax skill games is that Pennsylvania is already too dependent on gambling to pay the bills.

Between brick-and-mortar casinos and online betting outlets, the commonwealth generated more than $270 million in revenue in just May of this year. The sports betting platform FanDuel even subsidized SEPTA service for the Eagles’ playoff run. While this money does help avoid unpopular service cuts and tax increases, it comes with its own costs. Research says that problem gambling is on the rise, with the ease of betting on your phone a key component.

While gambling has long been a part of human society, the legal online gambling platforms that dominate the scene today are unprecedented. Inquirer reporter David Gambacorta managed to locate one local man who wagered $18.5 million on sports. Along the way, he was offered multiple perks to keep him in the game. Casinos have long sought to keep big spenders happy through meal vouchers, free drinks, and comped accommodations. FanDuel went a step further: It secured a personalized video from Phillies star Bryce Harper.

Part of the justification for legalizing gambling was to clean things up. Legitimate businesses don’t break kneecaps or organize “bust outs.” They had to operate with the kind of regulatory guardrails that simply didn’t apply to illegal bookies who dominated the trade not so long ago.

Stories like these complicate that logic. The more lawmakers in the Keystone State rely on gambling to pay our bills, the more complicit we are in the industry’s misdeeds.