Philadelphia is engaging in a comprehensive revaluation of property that may or may not affect the city's revenues.
The Actual Value Initiative has three stages. First, assessors are assessing the value of all real estate property in the city at market value. Second, the city will simplify the mathematical formula used to calculate individual tax bills. Third, to compensate for what it expects to be higher property values, the city council will lower the city's tax rate.
The city's current assessed values are grossly inaccurate because the state does not regulate them, according to a Pew Charitable Trusts report.
After the assessment some properties may see their taxes increase by tenfold, according to Philadelphia city councilman Kenyatta Johnson.
Philadelphians pay less in property taxes and more in wage taxes than residents of many U.S. cities, according to the Pew report. With the completion of the property tax assessment, the City Council will set a new tax rate. While some observers expect this new rate will be revenue neutral, this will not necessarily be the case. The new rate should be published by May 31.