The Philadelphia Museum of Art. Lincoln Financial Field. The former Aramark Tower.
Together, those Philadelphia landmarks are worth $794 million, according to city assessment records. But they are among the nearly 23,000 properties in Philadelphia exempt from paying property taxes because they are owned by nonprofit or government institutions.
RELATED STORIES
- Philly judge orders city and schools to repay nearly $50 million in tax revenue to commercial property owners
- Could Philly’s primary election end the 10-year tax abatement? Here’s where Council candidates stand.
- Philly’s 2020 assessments are out. Here’s how to calculate your new tax bill.
In sum, the $29.6 billion value of all exempt properties account for 17% of the city’s total real estate value, according to an Inquirer analysis. Their combined tax breaks equal about $414 million annually.
It’s not unusual for cities like Philadelphia, with a high concentration of universities and hospitals, to have a large amount of untaxed property. Adam Langley, who studies tax exemptions at the Lincoln Institute of Land Policy, a Massachusetts-based think tank, said he often cites the city when referring to places with lots of tax-exempt properties.
Like this? Click to receive free EnviroPolitics Blog updates
Still, Langley said, Philadelphia is “kind of an outlier” because it does not seek payment in lieu of taxes (PILOT) agreements with its largest nonprofit institutions, a step that has enabled other cities to recoup millions in extra revenue.
When he ran for mayor four years ago, Jim Kenney said the city should pursue PILOTs or comparable service agreements. Now, as Kenney asks voters in November for a second term, other types of tax exemptions have come under scrutiny from City Council, activists, and residents, and property reassessments have led to tax hikes for thousands of homeowners in the last two years.
And some of the same activists who have urged the city to eliminate or reform its 10-year tax abatement for new construction or rehabilitation have called for PILOTs for institutions such as the University of Pennsylvania, which owns at least $3.2 billion in property and has a $14.7 billion endowment.
But no negotiations for PILOT agreements are underway, said Jim Engler, Kenney’s chief of staff.
What kinds of properties are tax-exempt?
State law dictates that churches, cemeteries, hospitals, institutions of learning, charities, and government-owned properties are exempt from taxes, as long as their revenue goes toward the support of the institution or charity. Many argue that they help the city in other ways, as large employers, tourist attractions, or health-care providers.
Government properties — owned by the city, state, and federal governments, housing authorities, SEPTA, and other agencies — account for nearly 40% of the value of all tax-exempt properties, the records show. The remaining exemptions are for nonprofits.
Educational institutions in Philadelphia own about a quarter of the value of tax-exempt properties, the Inquirer analysis found.
