Philly homeowners are signing up to save on property taxes. The School District wishes they were saving less.

Thursday marks the last day for Philadelphia homeowners to apply for a popular relief program that was expanded this year to ease the pain of soaring property taxes.

But the top financial official for the School District of Philadelphia, which gets 28% of its revenue from the property tax, has mixed feelings about homeowners taking advantage of the reforms.

In response to an Inquirer report published Tuesday — which provided a tool for homeowners to look up their tax enrollment status before the application deadline — district CFO Uri Monson reiterated concerns that city schools could lose significant revenue if homeowners apply for the tax break.

“At the core, I think every person should take advantage of every legal opportunity out there,” Monson said. “In no way am I saying people should not use legally available tools to determine their tax bill. Everyone should pay their fair share … but there is ultimately an impact.”

» READ MORE: Are you missing out on a Philly tax break?

Philadelphia’s homestead exemption was a focus of budget negotiations this year between Mayor Jim Kenney and City Council, and was expanded to offset a 31% increase in residential property valuations. It knocks up to $1,120 off the annual tax bill of owner-occupied homes, and elected officials touted its expansion from $45,000 to $80,000 as a significant legislative achievement to protect homeowners.

The School District appears to be at odds with that approach. Monson said he doesn’t think the exemptions should end; instead, he argues that the current tax break is excessive. Increasing the homestead exemption from $45,000 to $80,000 siphons away too much money to taxpayers at the expense of the School District, he said.

The city, meanwhile, said it’s working to get more residents enrolled in relief programs — even though more people have applied than expected, meaning the city and School District will have at least $3.1 million less in property tax revenue than expected for 2023. For low-income and struggling homeowners, particularly in rapidly gentrifying neighborhoods where assessments are doubling next year, reducing a property’s taxable value by $80,000 can be a lifeline.

Elected officials — from Republican City Councilmember Brian O’Neill to Democratic leaders like State Rep. Jordan Harris and U.S. Rep. Dwight Evans — have urged their constituents to enroll and save. Kenney’s administration said it would be “delighted” if everyone eligible claimed the homestead exemption.

“Funding the School District is among the administration’s highest priorities, but protecting homeowners’ ability to afford to stay in their homes is also crucially important,” said Kevin Lessard, a spokesperson for Kenney. “We have produced budgets and taken actions that balance those priorities to benefit taxpayers, students, stakeholders — and the public at large — as best as possible.”

The district has a $3.9 billion annual budget. But decades of state funding battles, local financial crises, and more recently, the global pandemic, have kept the district’s finances in a near-constant state of emergency.

Monson noted that property taxes provide one of the most consistent revenue streams for the district. They are expected to net $987.6 million for the current fiscal year, according to the district’s latest financial report released in November, based off the city’s tax collection data.

In theory, as property values naturally increase, property tax revenue goes up too. ”Steadily recurring growth is actually one of the main reasons that schools across the country use property taxes as the basis” for generating revenue, Monson added.

But that depends on whether the city consistently reassesses properties to reflect their increasing market value. This year marks the city’s first major reassessment since 2019, which means that the School District has missed out on a significant revenue windfall for those three years.

“That cost the School District, conservatively, $150 million in lost revenues that we’ll never get back,” Monson said.

Waiting longer between assessments comes with larger increases for homeowners, and in turn creates political pressure for leaders to offer relief. In a way, the negotiated increase to the homestead exemption — which is inching closer to the $90,000 legal limit under state law — was a response to the sticker shock.

The administration has made conducting annual reassessments a goal but has not yet committed to undertaking another reassessment next year. “Given the many factors at play, we’re unable to commit to a specific frequency,” Lessard said.

The school district is far more reliant on property taxes than the city as a whole and has less diversified revenue streams. While the city receives money from the wage tax, for example, the school district does not. However, the district does receive a grant from the city — determined annually by the administration — that could reflect gains from other sources of revenue, should there be any.

“This administration, reflecting the mayor’s focus on delivering quality education from the beginning of his term, has substantially increased the city’s general fund contribution to the school district,” Lessard said. “That contribution was $104 million annually before the administration took office and is now $269 million.”

But long-term, the school district’s chief financial officer is still concerned about disinvestment in schoolchildren.

The homestead exemption, once granted and raised, represents a permanent — if finite — erosion of the city’s property tax base. And while the school district is seeing strong balances in the immediate future, in part because of an infusion of federal funding, it is projected to experience a deficit by the end of the next five years.

As more and more homeowners claim an exemption they’re entitled to, “it would likely mean less money down the road to maintain programs we initiated with federal money” such as expanded summer education or after-school offerings, Monson said.