Jul 3, 2016 - This would add $3.9 billion cu- mulatively to the City's total taxable ... Chart from the August 2016 Fede
Economic Report Financial Forecast & Snapshot
Office of the City Controller
Alan Butkovitz
Monthly Feature:
Snapshot Highlights Tax revenues (City & PICA) for July totaled $213.7 million, which is a six percent increase over last July. A breakdown of the total revenues included $180.1 million into the General Fund and $33.6 million as the PICA portion.
Page 3
Along with reviewing monthly General Fund collections, the economic report reviewed the latest data for properties that received the 10year tax abatement. These are properties that were either rehabbed or considered new construction which the owners were exempt from paying the building value portion of their total Real Estate Taxes. In 2016, there were more than 1,400 abated properties returning to the City’s tax rolls. These properties added $405 million to the City’s total taxable value, resulting in the potential for almost $6 million in new Real Estate Tax revenues. In addition, over the next five years, it is estimated that 9,683 abated properties will be added to the tax rolls. This would add $3.9 billion cumulatively to the City’s total taxable value. This means the City could collect about $55 million in new tax revenues over this period, with the majority, 55%, going to the School District.
MSA U.S.
8 6 4 2
Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16
June-16 6.9% 5.3% 4.9%
July-16 City - 7.7% MSA - 5.9% US - 4.9%
Change 0.8 0.6 0.0
July-15 7.8% 6.0% 5.3%
Millions of Dollars
unemployment rates are non-seasonally adjusted FY14
Monthly City & PICA Wage/Earnings/NPT Receipts
200
FY15 FY16
170
FY17
140 110 80
July
Aug.
Sept.
Oct.
Nov.
(in millions)
Wage/NPT/Earnings (City & PICA Yearly)
Millions of Dollars
Monthly home sales for July totaled 1,456, a three percent increase over last July.
Phila.
Yearly Unemployment Rate
10
Wage/Earnings/NPT (City & PICA) collections for the month totaled $143.5 million, a 11 percent decrease over the same month last year. Monthly sales tax revenues for July totaled $25 million. This is a 67 percent increase over last July; however, it includes accrued amounts that will be reflected in the last fiscal year’s total due to a two-month delay in collections from the state.
July 2016
Abated properties returning to City’s tax rolls could add $55 million in new Real Estate Tax revenues over five years
28 26 24 22 20 18 16 14 12 10 8
Dec.
Jan.
Feb.
Mar.
FY2017 $143.53
Apr.
May
FY2016 $162.08
June
Change -11.4%
Monthly City Sales Tax Receipts FY14 FY15 FY16 FY17
July
Aug.
Sept.
Oct.
(in millions)
Sales (Yearly) -
Nov.
Dec.
Jan.
Feb.
Mar.
FY2017 $25.08
FY2016 $15.03
Key Indicators -11.4% = decrease in Wage/NPT/Earnings revenues over last July
3% = monthly home sales up over last July
Apr.
May
June
Change 66.9%
7.7% = city unemployment up eighttenths a point over last month
16,500 = increase in total Philadelphia jobs over last July
pg.1
Economic Report Financial Forecast & Snapshot
Office of the City Controller
Alan Butkovitz July 2016
Current Employment Data & Forecasted Conditions Nonmanufacturing Business Outlook Survey According to the Philadelphia Federal Reserve’s latest Nonmanufacturing Business Outlook Survey, firms have increased their future costs projections since the last quarter’s reporting period.
vices, which is unchanged from the May reporting period.
Current indicators for general activity indicated a slight decrease over the last month from 20.3 to 19.5 in the Diffusion Firms anticipate an increase of 2.5 Index. The New Orders Index percent in their own prices over the also fell significantly from 29.6 next year, an increase from the two to 14.7. percent forecasted in May 2016. Firms are also anticipating an in- While the majority of firms recrease in employee compensation ported no change in employby three percent over the same pe- ment, the Full-Time Index riod, an increase from 2.5 percent edged up by almost eight points reported in May. In addition, when to 10.0, with at least a quarter looking ahead 10 years, firms ex- of the companies reporting inpect U.S. consumers will pay 2.5 creases. percent annually for goods and serTotal Non-Farm Employment (latest data available) July 2016 691,700
June 2016 694,900
Construction
11,800
12,000
Manufacturing
20,800
20,900
Trade, Trans. & Utilities
92,500
93,900
Information
11,600
11,700
Financial Activities
44,200
43,800
Prof. & Business Srvs.
91,700
92,900
Educ. & Health Srvs.
217,900
217,400
Leisure & Hospitality
74,700
73,000
Other Services
27,800
27,500
Government
98,700
101,800
City Total
Chart from the August 2016 Federal Reserve Bank of Philadelphia’s Nonmanufacturing Business Outlook Survey
% Chg.
-0.5% -1.7% -0.5% -1.5% -0.9% 0.9% -1.3% 0.2% 2.3% 1.1% -3.0%
July 2015 675,200 11,700 21,200 92,000 11,800 42,700 90,300 209,800 69,000 27,600 99,100
City of Philadelphia Demographics
Demographic data was compiled from the 2014 American Community Survey
pg.2
Economic Report Financial Forecast & Snapshot
Office of the City Controller
Alan Butkovitz July 2016
Review of Abated Properties Returning to City’s Tax Rolls Departments sync data to ensure proper billings for all properties Residential and commercial properties in the City of Philadelphia that are either being rehabbed or considered new construction can obtain a 10-year abatement from Real Estate Taxes. As part of the City Controller’s audit of the City’s Comprehensive Annual Financial Report, auditors conduct tests to ensure that tax abated properties are properly taxed once the abatement expires. The auditors’ work includes obtain taxable assessed values from the Office of Property Assessment (OPA) and testing the data against the property bills generated and distributed by the Department of Revenue (Revenue). In performing this test, auditors determined that OPA automatically matures the abatements through a start and end date, which is then transmitted to Revenue.
The Controller’s audiTax Abated Properties - Returning to Tax Rolls tors have not encounCity of Philadelphia tered any problems (amounts in thousands) with this process. In Exempt City Rev- School Total Tax Year Properties Value enue District Value addition, a review of OPA data and Five2016 1,429 $405,365 $2,561 $3,113 $5,674 Year Plan (FY17-21) 2017 1,220 $265,508 $1,677 $2,039 $3,716 information indicat2018 2,807 $1,193,122 $7,537 $9,164 $16,701 ed that 1,429 abat2019 2,540 $1,008,747 $6,372 $7,748 $14,120 ed properties were 2020 1,619 $661,729 $4,180 $5,083 $9,263 placed on the tax rolls 2021 1,497 $773,395 $4,886 $5,940 $10,826 in 2016, adding $405 million to the City’s properties will be added to the tax rolls. total taxable value. This has provided This would add $3.9 billion* to the City’s the City with the potential to generate total taxable value. This means the City about $5.7 million* in new Real Es- could collect about $55 million in new tate Tax revenues. About $3.1 million tax revenues over this period, with the would go to the School District of Phil- majority, 55%, going to the School Disadelphia and $2.6 million to the City’s trict. *Excludes properties that apply and receive the General Fund. City’s Homestead Exemption In looking ahead over the next five years, it is estimated that 9,683 abated
M onthly H ome S ale D ata July 2016 - Top 10 Sales by Zipcode ZIP Code
Sales
% of Sales from Bank Owned
% of Sales from Short Sales
19146
82
1.20%
0.00%
19149
75
8.00%
1.30%
19128
70
2.90%
2.90%
19148
69
1.40%
0.00%
19111
62
9.70%
3.20%
19130
62
3.20%
0.00%
19125
60
3.30%
5.00%
19147
60
1.70%
0.00%
19145
52
3.80%
0.00%
19136
48
10.40%
2.10%
Based on information from TREND for July 2016.
19111
19128
19149 19136
19130
19125
19146 19147 19145 19148
1,456 = Total monthly real estate sales in Philadelphia 3% = increase in monthly sales compared to July 2015 pg.3
