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City Council tweaks mayor's tax proposal, voices need for greater property-tax relief

All tax changes voted out of committee Wednesday are still subject to more potential changes before Council passes them and approves the city's budget for fiscal year 2019.

City Council President Darrell Clarke (left) greets Mayor Kenney at a Council meeting at City Hall in November.
City Council President Darrell Clarke (left) greets Mayor Kenney at a Council meeting at City Hall in November.Read moreJESSICA GRIFFIN / Staff Photographer

Philadelphia City Council tweaked Mayor Kenney's proposed tax changes Wednesday as it took a step toward approving them — and as members continued to voice concern over tax increases caused by the city's latest property assessments.

Council members amended Kenney's proposed changes to the homestead property exemption and the real estate transfer tax. Kenney had proposed raising the real estate transfer tax to a total of 4.45 percent and increasing the homestead exemption, or the amount of assessed value off-limits to taxation, from $30,000 to $45,000.

Council voted to raise it to $40,000. The members also voted to increase the real estate transfer tax to a total of 4.278 percent; that amount would include the state's 1 percent levy on all property sold in the city.

Those changes offset each other, said budget director Anna Adams, because the increase in the real estate transfer tax was intended to offset the loss to the School District caused by increasing the homestead exemption.

All tax changes voted out of committee Wednesday still are subject to further changes before Council passes them and approves the city's budget for fiscal year 2019.

Some Council members said they would consider increasing the homestead exemption beyond $40,000.

"I would certainly be in favor of raising that up to $45,000 so our residents can get a decrease in some of their taxes," said Councilman Bobby Henon.

As Councilman Brian J. O'Neill said he would like a $50,000 homestead exemption, other Council members shouted out in support. Council President Darrell L. Clarke said additional changes remain an option, telling his colleagues that the votes were simply a means of moving the bills forward for further discussion.

Council also voted Wednesday to move ahead with Kenney's proposal to slow down the scheduled reductions in the city's wage tax.

Council did not act Wednesday on Kenney's proposal to increase the property-tax rate; members have expressed their hesitancy to raise property taxes.

In a statement after Wednesday's hearing, Kenney called the votes "a great start toward providing adequate funding to the Philadelphia School District."

"We look forward to further conversations — and votes — in the next few weeks," the mayor said.