PHILADELPHIA (KYW Newsradio) — City Council gave preliminary approval Wednesday night to a $5.9 billion budget that offsets some of the steep increases in property tax assessments at the expense of the Philadelphia School District.
Council didn’t vote until nearly 11 p.m., following hours of intense negotiations about how best to ease the sticker shock on homeowners who will be seeing assessment increases averaging 30%.
The result is a series of tax breaks — notably, an expansion of the homestead exemption that will allow homeowners to take $80,000 of assessed value off their tax bill.
The homestead exemption currently allows homeowners to exempt $45,000 in value from their assessments. Mayor Jim Kenney had recommended increasing that to $65,000, while some council members wanted $90,000. The compromise was $80,000.
It will save homeowners an additional $140 but will cost the school district $26 million.
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Council President Darrell Clarke said the budget also creates a fund to help homeowners who still can’t pay their taxes, even after the tax breaks.
“One thing that we cannot allow to have happen is a person be in a position where they may lose their home as a result of something we did based on a record-breaking assessment,” he said.
There’s additional money for a tax break called LOOP, for low-income homeowners, and small reductions in wage and business taxes. Three members voted against the wage and business tax reductions, including Jaime Gauthier.
“When we’re trying to rebound as a city, I wasn’t comfortable taking that revenue away from city services,” she said.
Member Isaiah Thomas defended it.
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“It’s imperative we send a signal that Philadelphia is open for business,” he argued.
Council also added $50 million in spending. It includes keeping rec centers open on weekends; expanding the CLIP program, which provides both jobs and community improvements; more money for the public defender’s office; and additional rental assistance and eviction prevention funding.
Under the city charter, City Council had to give preliminary approval to the budget by Thursday’s council session in order for it to pass by the start of the fiscal year.