It's Only Fair.

Most Philadelphia residents do the responsible thing: they pay their taxes or ask for help when they can't.  But there are thousands of people who choose not to pay and they get away with it.  And that is just not fair.

Tax Delinquency Hearing Witness Testimony and Thank You's

We want to thank all of the witnesses who sent in written testimony and/or came before the committee of the whole to testify on our Tax Delinquency hearings:

Keith Richardson, Revenue Commissioner – Department of Revenue

Frances Beckley, Chief Counsel to the Revenue Department

Michael McCabe, Goehring, Rutter and Boehm

Sharon Humble, Linebarger, Goggan, Blair and Sampson

Joseph Evers, Prothonotary/Clerk of Court - Court of Common Pleas 

Joseph Vignola, Under Sheriff – Sheriff’s Office

Alan Butkovitz, Philadelphia City Controller

Kevin Gillen, Ph.D. – Fels Institute of Government

Matt Stanski, CFO - School District of Philadelphia

Craig White, CEO - Philadelphia Gas Works

Andy Toy, Philadelphia Chinatown Development Corporation 

Rick Sauer, Executive Director – PACDC

Alan Domb, President – Greater Philadelphia Association of Realtors 

Darrell Zaslow, Chief Counsel – HAPCO 

Joe Grace, Director of Public Policy –  Greater Philadelphia Chamber of Commerce

Chris Sawyer, Anti-Blight and Delinquency Activist and Owner of Philadelinquency.com

Chris Somers, Owner and Real Estate Agent –  The Somers 

Richard Kane, Taxpayer

Monty Wilson, Community Legal Services

Stefanie Seldin, Philly VIP

Rashida Ali-Campbell - Executive Director, LoveLovingLove, Inc

Joel Palmer and Rick Vanderslice, Scioli Turco 

You can find the testimony submitted by each witness at the links above, and we will post full videos of the hearings shortly.

Tax Delinquency Hearing Witness Testimony and Thank You's

A Brief History of Property Tax Delinquency in Philadelphia

In 2009 the mayor’s task force on tax policy and economic competitiveness* advised shifting the tax burden from businesses to property, from "mobile to immobile tax bases."  It is acknowledged that this shift requires improved property assessments, transparency, homestead exemptions, improved collection and compliance, and strategic acquisition of tax delinquent land for redevelopment.

Later that year Controller Alan Butkovit’s proposed action steps to increasing revenue, include data mining, inter-departmental coordination and, among other things, an amnesty program.

The following year, in 2010, the City moved forward on a tax amnesty*. The amnesty was designed to be the last chance before enforcement becomes more aggressive. $60,000,000* was recovered,  Mayor Nutter noted "We're now moving into a new phase - Pay up...we want our damn money".

Later that year the City unveils it’s plan of more aggressive enforcement which is to include increased Sheriff sales, earlier dunning and garnishing* delinquent city workers paychecks.

In 2011 Patrick Kerkstra began to illuminate the depth and complexity of the problem in a series of articles on http://www.planphilly.com:

Special Report: The Delinquency Crisis* 8/13/2011

Broken Assessment System Complicates Sales of Delinquent Property* 8/15/2011 

Special Report: How Tax Delinquent Properties Thwart Development*

8/15/2011

Many Delinquent Properties Have Real Value* 8/15/2011

Flawed Delinquency Records Abound* 8/15/2011

How Philadelphia is Failing to Proceed on Taxes Owed* 9/16/2011

In 2012, while approving the Mayor’s budget proposal, which provided $40 million to the Philadelphia School District, they voted to delay the implementation of the Mayor’s proposed Actual Value Initiative (AVI) for a year in order to obtain more accurate property assessments.

Later in the year Patrick Kerkstra reports to www.philly.com on the $515.4 Million owed to the City and Schools by Property Tax Delinquents.

With AVI looming, and tax increases on their way to a majority of Philadelphia residents, in the beginning of 2013 the State Property Tax Relief Package is Announced

The property tax relief package is comprised of four pieces of legislation:

  • Rep. Cherelle Parker is introducing legislation *(House Bill 388) to provide the Philadelphia with additional authority to collect delinquent property taxes. The city will be authorized to place liens on all properties under common ownership in Pennsylvania when at least one is delinquent in the taxes owed to Philadelphia. When the property owner attempts to sell any of his/her property located within the Commonwealth, the lien must be satisfied. 
  • Rep. Michelle Brownlee, D-Phila., is proposing a constitutional amendment *(House Bill 389) authorizing two classes of properties (residential and commercial) to be taxed at different rates in Philadelphia. Currently, all property in Philadelphia is taxed at the same rate. 
  • Rep. Mike McGeehan, D-Phila., is recommending a bill* (House Bill 391) to give Philadelphia the ability to provide eligible Philadelphia homeowners with the option to make property tax payments in periodic installments. 
  • Rep. Mike O’Brien, D-Phila., is offering a bill* (House Bill 390) to provide relief for long-term owner-occupants by amending the First and Second County Property Tax Relief Act to afford Philadelphia the same authority to use age and financial need when considering relief for long-term owner-occupants, often referred to as gentrification relief. 

Soon after the Mayor announces* $40 million additional in budget for real estate tax delinquent collections.

Amidst all of this, recognizing the imbalance of increasing property taxes on so many, while over $500 Million sits uncollected from Real Estate Tax Scofflaws, the six City Council Freshman call for hearings on tax delinquency and create the Tax Payer Fairness Initiative to work on resolving the problem of serious real estate tax delinquency.

And by now most property owners have received their new assessments under AVI, and Patrick Kerkstra has published another multi-part series on delinquency, with Jared Brey. Through their investigations certain themes emerge: investors own a bulk of delinquent property; the economic impact goes beyond dollars not collected; low income neighborhoods disproportionately affected; there is a correlation between delinquency and neglect; enforcement is lax; current administration's collections are worst in recent history;

Part One*: Lax Property Tax Enforcement and Brazen Deadbeat Investors Have Depressed Philadelphia's Property Tax Base by $9.5 Billion

Part Two*: A Broken Property Tax System Where Everyone Loses, Except Investors

Part Three*: Delinquents Enabled By City's Failings

Part Four*: (byline: Jared Brey): The Challenge of Fixing Philadelphia's Broken Approach to Land Use

Following the series Philadelphia Leaders Beseech Mayor Nutter* to Improve Delinquent Tax Collection, and the City Council Freshmen take the lead, announcing hearings on tax delinquency on March 19th and 20th of 2013.

You can watch these hearing live, and they will be posted here on the Tax Payer Fairness website shortly after they air.

A Brief History of Property Tax Delinquency in Philadelphia

Tax Delinquency Hearing Witness List

Witness List
Real Estate Tax Delinquency Hearing
Tuesday - March 19, 2013
1 PM to 4 PM

  • Keith Richardson, Revenue Commissioner – Department of Revenue
  • Frances Beckley, Chief Counsel to the Revenue Department
  • Michael McCabe, Goehring, Rutter and Boehm
  • Sharon Humble, Linebarger, Goggan, Blair and Sampson
  • Joseph Evers, Prothonotary/Clerk of Court - Court of Common Pleas
  • Joseph Vignola, Under Sheriff – Sheriff’s Office
  •  

Witness List
Real Estate Tax Delinquency Hearing
Wednesday - March 20, 2013
1 PM to 4 PM

  • Alan Butkovitz, Philadelphia City Controller
  • Kevin Gillen, Ph.D. – Fels Institute of Government
  • Matt Stanski, CFO - School District of Philadelphia
  • Craig White, CEO - Philadelphia Gas Works (tentative)
  • Andy Toy, Philadelphia Chinatown Development Corporation
  • Rick Sauer, Executive Director – PACDC
  • Alan Domb, President – Greater Philadelphia Association of Realtors
  • Darrell Zaslow, Chief Counsel – HAPCO
  • Joe Grace, Director of Public Policy –  Greater Philadelphia Chamber of Commerce
  • Chris Sawyer, Anti-Blight and Delinquency Activist and Owner of Philadelinquency.com
  • Chris Somers, Owner and Real Estate Agent –  The Somers
  • Richard Kane, Taxpayer
  • Monty Wilson, Community Legal Services
  • Stefanie Seldin, Philly VIP
  • Joel Palmer and Rick Vanderslice, Scioli Turco
  • TBD, Take Back Vacant Land Coalition (tentative) 
Tax Delinquency Hearing Witness List

Invitation to Public Hearings on Taxpayer Fairness

March 18, 2013

Dear Colleagues and Friends,

As we continue to consider the implications and impacts of the transition to actual value, each of us have been approached by constituents who want to know why some taxpayers will see their real estate tax bill increase when so many Philadelphians never pay anything at all.  Philadelphia’s failure to collect real estate tax engenders disappointment in and a belief that Philadelphia is broken.  Residents don’t believe that Philadelphia’s system is FAIR.

Council President Clarke, Councilman Bill Green, Councilwoman Quiñones Sánchez, Councilwoman Tasco and others have been working on these issues for many years.  It is our hope that we can build on the foundation and work of these members, and that together, we can launch a collaborative and focused effort to fix a system that has some serious flaws.

It is in the spirit of partnership and collaboration that we ask that you join us, tomorrow, Tuesday, March 19 and Wednesday, March 20, from 1 PM to 4 PM for hearings on the topic of real estate tax delinquency.  These hearings are the first set of hearings pursuant to resolutions:  130090, 130093, 130098, 130099, 130088, and 130097.

Please let us know if you have any questions or need any additional information before the hearings.  There is a lot of work to be done, and certainly addressing the failures of our real estate tax delinquency system is only one piece of the puzzle. But we believe that if we collectively focus our energy and efforts, we can and will find solutions that will make Philadelphia stronger. 

We hope to see you at these hearings.

Sincerely,

Cindy Bass
Councilwoman, 8th District

Kenyata Johnson
Councilman, 2nd District

Bobby Henon
Councilman 6th District

Denny O'Brien
Councilman, At-Large

David Oh
Councilman, At-Large

Mark Squilla
Councilman, 1st District

 

Invitation to Public Hearings on Taxpayer Fairness

Daily News: Don't pay your taxes

TWO THINGS I hate:

1. Hundreds of millions of dollars in Philadelphia taxes uncollected due to ineptitude.

2. Having to read about it in the Morning Yawn.

Earlier this week, the Inquirer, in conjunction with the website PlanPhilly, spun an urban novella about tax delinquents. The cause? City inertia, inaction, incompetence and other "in words," such as insanity.

From Sunday through Tuesday, the Inky did to City Hall what pigeons do to statues outside it.

There's pigeon guano outside and bull manure inside. The Inquirer (cruelly?) used words from the mayor's mouth on efforts to collect the staggering unpaid taxes that amount to almost $300 million. The mayor's own words:

March 2009: "You owe it, pay it . . . We cannot be more direct or more clear."

Moo.

September 2010: "This is not a threat; and it is a promise to the city."

Mooo.

March 2013: "We will . . . chase their little asses down as far as possible."

Moooo.

Unhappily for Nutter, the yearlong investigation lands on the front pages just as city homeowners are getting drastic reconfigurations on the value of their homes, with higher tax bills to follow for many. We are expected to pay the new rates while100,000 properties are tax delinquent, about 60 percent of them owned by investors, according to the Inquirer, which estimates delinquency depresses the overall property-tax base by - gulp - $9.5 billion.

It's true the problem has existed for decades, but reformer Nutter was elected to forge politics-free solutions and reverse his predecessors' neglect. The figures show he has failed. Last month he talked about new technology, new staff and new money to solve the problem. Instead of all the egghead Wharton crap, how about hiring a battalion of Rocky Balboa leg-breakers to knock on deadbeats' doors?

How inept is this city? (Put your hands down, class. That was a rhetorical question.)

Philly's annual collection rate is 85.6 percent, about 10 percent less than the other top-20 cities. If Nutter put as much energy into this as he has into taxing sugary drinks, coddling illegal immigrants and creating bicycle lanes, debtors might have been put on the rack and coughed up the millions they owe. Where are our priorities?

When tax cheats get to skate on what they owe, you and I pay more. (The value of my condo, I just learned, has tripled. Whoopee! Will I do the happy dance when my tax bill arrives? Nosiree! But I am a dunce who pays what I owe, on time.)

You are, too, most likely. How should we protest?

Pitchforks and torches? Nooo! Torches pollute. The mayor would, like, have a total hissy fit. He'd demand that you use glowsticks.

How about this: When your real-estate bill arrives, send back the envelope filled with sand, as in, pound this. Just say no. Just say, "Mayor, afteryou collect from the 100,000 deadbeats, then come see about me, OK?"

You've heard of tax holidays? Let's have a payment holiday. Let's pretend we're in school and it's too nice a day to spend inside. Go delinquent. Don't pay the bill.

Given the tortoise speed at which the city pursues deadbeats, we'll be pushing up the daisies before they get to us. There's small chance the city will foreclose. Jail is out of the question. If we get hit with late charges - so what? We know from experience that when the going gets tough, the city caves and offers amnesty. Philadelphia is a no-punishment zone for deadbeats.

Are we sick of all this bull? Shall we foment a crisis? Are we up for (nonviolent) revolution? You have 100,000 good reasons to throw your tax bill in the trash.


Written by Stu Bykofsky for the Daily News on March 15, 2013

Daily News: Don't pay your taxes

CBS Philly: Nutter Gets Defensive About His Tax Deadbeat Record

PHILADELPHIA (CBS) — Philadelphia Mayor Michael Nutter is defending his record in the wake of a published report that found he has fared worse than previous mayors in going after tax deadbeats.

The Philadelphia Inquirer reported that since 1980, the three single-worst years for tax collection in Philadelphia came during Nutter’s first term. And the report says the city’s tax collection rate of 85-percent is a full 10 points below 20 other big cities.

Nutter blames the recession, and a neglected tax collection process that predates his administration.

“This is an accumulation of decades of delinquency, of bad policy, of lack of investment in software and hardware and human capital which we are reversing.”

Nutter vows to raise the collection rate to above 90-percent. The issue of tax deadbeats has become more prominent as Nutter pushes for a new property assessment system dubbed “AVI.”

The mayor last month announced that the city will spend $25-million for a new computer system to track deadbeats, and to analyze who should be targeted for collection efforts, as well as $15- million to staff a new call center.


Written by Mike Dunn for CBS Philly on March 13, 2013

CBS Philly: Nutter Gets Defensive About His Tax Deadbeat Record

Newsworks: Nutter pledges to do better on tax collection, housing abandonment

An investigative series by Plan Philly finds Philadelphia is still among the worst cities in the country at collecting real-estate taxes and taking delinquent properties to sheriff sale.

Despite several initiatives by Mayor Michael Nutter to increase delinquent tax collection, the series finds the city still does a terrible job of getting property owners to pay up the delinquent taxes or forfeit their buildings.

That results in thousands of blighted properties that depress the values of surrounding property and degrade the quality of life in many neighborhoods.

In a hallway exchange with reporters, Nutter said the series points out some longstanding problems.

Asked about the finding that under his administration the city had its three lowest tax collection years since the early '80s, Nutter said, "They were also about the three worst years in recent economic history as well. You know, people are making decisions, do I pay my mortgage or pay my city taxes, or am I just going to abandon my home?"

Nutter said the city is working to turn things around.

"We have made a focused commitment to invest more in the systems and people to rectify this particular issue," Nutter said. "It is absolutely a problem. I am very very focused on it. and we will fix it.


Written by Dave Davies for Newsworks on March 13, 2013

Newsworks: Nutter pledges to do better on tax collection, housing abandonment

DN Editorial: Knuckle down: It's time to get property-tax deadbeats to pay up...or else

IF A GROUP of out-of-towners descended on a neighborhood bar and started trash-talking our sports teams, or Philadelphians in general, or our children in particular, we imagine that not many of them would leave without a few knuckle sandwiches . . . worse.

And yet, there's a group that's essentially been allowed to do that day-in, day-out, for years. And not only are they allowed to diss the city, but some of them are getting rich doing it.

These are the tax deadbeats that are taking all Philadelphians for a ride. They've bought up properties and walked away from them, thumbing their noses at paying property taxes. Some of them pay up only when they sell the properties. Others never do. According to a new report by Patrick Kerkstra for the website PlanPhilly and the Inquirer, these tax deadbeats have been allowed to depress the city's property-tax base by at least $9.5 billion. Those who own homes near delinquent properties are being robbed of property values by at least 22.8 percent.

The rest of us are being robbed because we're forced to pay higher taxes to make up the money that's not being collected.

Of the roughly 100,000 tax-delinquent properties in Philadelphia, at least 57,000 - 59 percent - are owned by investors, not occupants. Not all of them are from the suburbs, either.

These are staggering numbers, and they run counter to the stereotypical view of a tax delinquent as a low-income homeowner who can't afford to pay his or her tax bill. Only 21 percent fall into that category.

One reason that the city has been lax in going after tax deadbeats is that it bought into that stereotype. It didn't want to push people out of their homes by forcing tax sales of their property.

Clearly, the investors who are delinquents are playing the city. They know that local government is slower than slow in going after deadbeats. They can ignore the warning notices with impunity until the day comes when the property is developed or sold.

For every dollar in property taxes owed, Philadelphia collects only 84 cents. The national big-city average is 95 cents on the dollar.

According to the Kerkstra report, when it comes to tax delinquency, the Nutter administration talks big but carries a small stick. The administration declines to enforce a law that enables it to move quickly against delinquents, levying fines and placing liens on their properties, then moving them to sheriff sales. Nutter has vowed to spend $40 million over the next five years to develop the technology and hire the staff to go after delinquent accounts.

Eleven years ago, business leaders marched to City Hall in a "briefcase brigade" to say that they were fed up with the city's tax system. This led to reform, especially of the wage tax - a reform, incidentially, led by then-councilman Michael Nutter. The same thing needs to happen with homeowners: they need to descend on City Hall, in person or via phone or email, to let Council and the mayor know that we are tired of being bullied by slumlords who have systematically torn this city - and its value - down. Time for the legal equivalent of knuckle sandwiches for these bums.


Written by the Daily News Editorial Board for the Daily News on March 13, 2013

DN Editorial: Knuckle down: It's time to get property-tax deadbeats to pay up...or else

Inquirer Editorial: Cleaning up deadbeat city

A special report by The Inquirer and PlanPhilly shows that most of the city's deadbeats - 59 percent - are not owner-occupants. Many live in tony suburbs and don't mind dumping their bad business decisions on the city.

One promising response is a bill by State Rep. Cherelle Parker (D., Phila.) allowing the city to file liens against deadbeats' suburban properties. They may not care about Philadelphia, but maybe they will care about their own homes. The city might even collect the $2.9 million owed to it by folks in Huntingdon Valley, or the $2.1 million owed by those in Bala Cynwyd. House Urban Affairs Committee Chairman Keith Gillespie (R., York) should schedule hearings on the legislation.

The city hesitates to foreclose on properties in neighborhoods where the real estate market will make it difficult to resell them. But a bill by Councilwoman Maria Quiñones Sánchez would create a land bank to help the city hold on to judgments against deadbeats without becoming the actual owner of their properties. The city can enforce the judgments when it or a qualified developer has a use for a property.

Philadelphia shouldn't move to confiscate all of its 100,000 delinquent properties, especially since many are worthless. But it can no longer let chronic deadbeats get away with robbing the city and schools of revenue while responsible taxpayers make up the difference. Starting a land bank to hold property taken away from such callous speculators is an idea that has waited too long.

The land bank legislation could be complemented by Council President Darrell L. Clarke's bills to create development districts in distressed areas and target the city's 40,000 vacant properties, about half of which are privately owned and tax-delinquent. He would allow the city to quickly transfer land to qualified developers who could return it to productive use. Clarke also supports incentives such as flexible zoning and expedited permitting for projects that would make housing available to low- and moderate-income residents.

A bill sponsored by Council members Bill Green, Curtis Jones Jr., and Sánchez could improve collections with stronger enforcement measures, including definite foreclosure deadlines for chronic deadbeats and facilitated payment plans for struggling homeowners. The Nutter administration, meanwhile, has pledged a long-awaited $40 million overhaul of the tax-collection system.

Philadelphia needs a targeted enforcement program that collects unpaid taxes, takes property away from chronic delinquents, and encourages redevelopment. If serious cooperation among city and state officials continues, the city can begin to break free of its self-destructive deadbeat culture.


Written by Philadelphia Inquirer Editorial Board for the Philadelphia Inquirer on March 13, 2013

Inquirer Editorial: Cleaning up deadbeat city

Philadelphia Inquirer: Philadelphia leaders beseech Mayor Nutter to improve delinquent tax collection

Two days before Mayor Nutter is to deliver his budget address, a host of city leaders called on his administration to improve its performance in the collection of delinquent property taxes.

Philadelphia's delinquency crisis - the subject of a three-day Inquirer and PlanPhilly series published this week - has been a matter of growing interest in city government circles for some time. But with the pending transition to a new property assessment system - a move that will lead to higher taxes for many homeowners - delinquency has become a politically explosive subject.

City Council will hold at least six hearings on tax delinquency in coming weeks, and a host of legislative proposals - in Philadelphia and Harrisburg alike - aim to get a handle on the epidemic. They include a land bank, the liening of property outside city limits, and developer inducements in highly delinquent neighborhoods.

The urgency is being driven by two concerns: the fiscal plight of the School District, and political pressure from homeowners worried about the Actual Value Initiative.

In a statement to The Inquirer and PlanPhilly, Nutter said Tuesday that "tax delinquency is a significant problem for Philadelphia. It has been for 30 to 40 years, and, frankly, the recession made collections even more difficult."

Nutter said the city had not invested enough in tax collection because of tight budgets.

"But since our [2010] tax amnesty, from which we collected more than $72 million, we have improved our collections in the last two years as the Law and Revenue Departments worked more closely and more aggressively using our private collection entities," Nutter wrote. "We've collected more and we've made much greater use of sheriff's sales."

Nutter said that "we must do more and we will," referring to new tax collection strategies he outlined in February, including a $40 million investment over five years in new staff and technology for the Revenue Department.

"I believe citizens will see and tax delinquents will feel the results of improvements in collections this year," Nutter wrote. "We can and will significantly improve, but we must invest now in new initiatives as we've outlined in our proposed budget and new five-year plan."

It remains to be seen how Council will respond to Nutter's request for new Revenue Department funding. While Council members share his interest in improving collections, they seem less sure that significantly increased spending on the Revenue Department is the way to achieve that goal.

Council President Darrell L. Clarke said he "will not be supportive of a $40 million investment that shows no return on investment," meaning that if Nutter wants more money for revenue, he should present a budget that assumes improved delinquency collections.

Clarke said Council members are frequently barraged with questions by constituents about the city's poor record on property-tax collection.

"This comes up at every community meeting," Clarke said. " 'What are you doing about people who won't pay their taxes? It's not fair for you to ask me to pay more when there are people who aren't paying their fair share.' "

The Inquirer and PlanPhilly series documented the costs of the delinquency crisis, which include a $9.5 billion hit to the property-tax base and an average 22.8 percent decline in the value of single-family homes with delinquent neighbors. The series showed how investors - not owner-occupants - account for a majority of delinquent accounts and 69 percent of the total outstanding principal, penalties, and interest debt owed to the city and the School District on unpaid real estate taxes.

Under the Nutter administration, the city's delinquency crisis has deepened. The three worst collection years since 1980 have been logged on Nutter's watch, and Philadelphia's collection rate has fallen further behind those in other large cities.

"The series is like several barrels of oil thrown into a raging fire. It complicates everything. How do you justify doing this [AVI] when you're not doing that [delinquent collections]?" asked Sam Katz, chairman of the Pennsylvania Intergovernmental Cooperation Authority, which oversees Philadelphia's long-term fiscal planning.

"I don't know what there is to debate. I hope that the city and the mayor and City Council and the Department of Revenue get behind a concerted effort to take this issue off the table, because it really is debilitating to the people who pay taxes to read stuff like this."

Yet some see an opportunity for the city to correct long-standing land management problems all at once.

"This detailed examination of tax delinquency is an extraordinarily important complement to the recent work of the Office of Property Assessment in carrying out a comprehensive and long-overdue reevaluation of all real estate in Philadelphia," said Center City District president Paul Levy. "Both provide the Nutter administration and City Council with the opportunity to set many things right and bring Philadelphia into the 21st century."

Former Managing Director Phil Goldsmith worried that the city's high delinquency rate makes it harder to win increased state support for the School District.

"You think we're going to get money from Harrisburg now for the schools? This is just one reason why the people out there will say, 'Get your act together before you come to us asking for money.' And it's hard to argue with that," Goldsmith said.

School Reform Commission Chairman Pedro Ramos, appointed by Gov. Corbett, said it was crucial that the city improve its tax collection, given the district's massive structural deficit, which persists even after a series of painful cuts, including the closure of at least 23 schools.

"Given the School District's financial problems, better collections are definitely necessary," said Ramos, who, as a former city solicitor and managing director, is well acquainted with the challenges of collecting property taxes in Philadelphia.

When Ramos was solicitor, a position that at the time was partly responsible for collections, the city posted the highest collection rate of the last 25 years. "It took a whole lot of effort to move the needle on collections," Ramos said.

"The foreclosure system has to have teeth for all the effort that goes before it to be credible, and for taxpayers to understand that there are consequences."

Council members were similarly critical, some angrily so.

"They tell us they're doing their best," said First District Councilman Mark Squilla. "But so far we haven't seen any real operational change or increase in collections."

Like Squilla, Councilman Kenyatta Johnson, of the Second District, represents an area of the city where AVI will increase the tax burden on many homeowners, which makes him particularly sensitive to constituent complaints about delinquency.

"It's insane that we have issued more than 10,000 licenses and permits to tax-delinquent properties over the last five years," said Johnson, citing one of the findings in the Inquirer and PlanPhilly series. "That adds insult to injury."

The City Code prohibits granting licenses and permits to tax delinquents not in payment agreements.

W. Wilson Goode Jr., an at-large Council member, said the city should target delinquent investors and speculators, adding, "The city's enforcement approach needs to change on a number of different levels."

And at-large Councilman James F. Kenney lambasted the Department of Revenue, which shoulders most of the tax-collection burden. "It needs to be dismantled or replaced," Kenney said. "We should be more like the IRS and less like we are."


Written by Patrick Kerkstra for the Philadelphia Inquirer on March 13, 2013

Philadelphia Inquirer: Philadelphia leaders beseech Mayor Nutter to improve delinquent tax collection

Inquirer Editorial: Lose deadbeats' dead weight

An Inquirer editorial Tuesday takes a look at a new study by The Inquirer and PlanPhilly that finds a correlation among tax-delinquent properties, abandonment, and depressed values. The study estimates that tax-delinquent properties cost their neighbors an average of 22.8 percent of property value.

Here’s the bottom line for the Editorial Board:

Philadelphia can't afford to carry the dead weight on its broken back of property owners whose tax-delinquent holdings rob the city of millions in tax dollars that could be used to improve city services and help the drowning School District.

Inquirer Editorial: Lose deadbeats' dead weight

Newsworks: Philly's coddling of tax deadbeats harms neighborhoods and property values

Philadelphia does a poor job of  tracking down property tax delinquents and making them pay.  This failure cripples the tax base, erodes the equity of many homeowners, and starves the city and its schools of funds, according to a new series by NewsWorks partner PlanPhilly and reporter Patrick Kerkstra.

Their investigation and analysis found that:

Delinquency depresses the overall property-tax base by at least $9.5 billion, a staggering sum that represents almost 10 percent of the city's $98.5 billion in taxable real estate.

On average, single-family homes are worth 22.8 percent less on the open market than they would be if they had no delinquent neighbors.

If delinquency were eliminated - a goal that most U.S. cities approach and some cities achieve on a regular basis - the tax revenue generated by a healthier tax base could be as much as $298 million a year.

At least 59 percent of all delinquent real estate in Philadelphia belongs to landlords, speculators and investors who do not live at the delinquent properties they own.

 Delinquent properties are voracious consumers of scarce city resources and prodigious generators of blight, accounting for far more than their share of taxpayer-funded demolitions, code violations and court hearings.

Very few neighborhoods are immune from the effects of delinquency. Ninety-six percent of all single-family homes have lost property value because of nearby delinquents.

Despite these effects, PlanPhilly and Kerkstra report, tax delinquency has received little sustained attention from most administrations for at least the past few decades. Mayors have, on occasion, announced initiatives promising to crack down on the largest of deadbeats. But none of these programs have dealt a serious blow to the problem.

You can see the full report, with interactive graphics by AxisPhilly, at www.planphilly.com


Written by Patrick Kerkstra and PlanPhilly for Newsworks on March 11, 2013

Newsworks: Philly's coddling of tax deadbeats harms neighborhoods and property values

WFMJ.com: Paper: Philly tax delinquents cost city, neighbors

PHILADELPHIA (AP) - A newspaper says tax-delinquent properties in Philadelphia cripple the tax base, erode the equity of thousands of homeowners and starve city government and the school district of badly needed funds.

The Philadelphia Inquirer says a yearlong Inquirer/PlanPhilly investigation found that delinquency depresses the overall property tax base by at least $9.5 billion, almost 10% of Philadelphia's taxable real estate.

The paper says the delinquent properties lower the worth of neighboring homes by an average of 22.8%, and few neighborhoods are untouched. And eliminating such delinquencies could increase the tax base by almost $300 million a year.

And while some such properties are owned by low-income people, the paper says at least 59% are owned by landlords, speculators and investors who don't live on-site.


Written by the Associated Press published on wfmj.com March 10, 2013

 

WFMJ.com: Paper: Philly tax delinquents cost city, neighbors

Inquirer Editorial: Philadelphia's blight factory

Rats, fleas, and roaches thrive in the city's abandoned, tax-delinquent properties. Often loaded with garbage inside and out, the structures are more prone to fires than occupied buildings. They harbor drug dealers and their stashes. And they soak up precious city resources, such as the taxpayer money ultimately required to demolish the most dangerous of them.

Beyond their extensive costs to public health and safety, these properties rob the city of millions in tax dollars that could be used to improve city services and help the drowning School District. At the least, the money could be used to knock down dangerous, tax-delinquent buildings. Because these property owners aren't paying their share, everyone else has to pay more.

A new study by The Inquirer and PlanPhilly estimates that there are 100,000 delinquent properties in the city. Of those, about 40,000 are more than six years behind on their taxes. That is clear and frightening evidence of the city's historical and disgraceful failure to collect property taxes - a problem as obvious as a burning building.

The harm is measured in real dollars as well as lost quality of life. There is a correlation among tax-delinquent properties, abandonment, and depressed values. The study estimates that tax-delinquent properties cost their neighbors an average of 22.8 percent of property value.

While some delinquent properties are owned by poor owner-occupants who can't afford their taxes, most - about 59 percent - are owned by absentee landlords, speculators, and investors who, thanks to the city's inaction, have little reason to worry about losing the properties to a tax sale.

There are many reasons for the city's dismal record on this issue. Topping the list are its long-dysfunctional tax collection, enforcement, and land disposition systems. Tax enforcement has not been used consistently to attack delinquency's companions, neglect and abandonment.

In addition, the city has hesitated for decades to evict tax-delinquent poor families from their homes and create yet another problem - homelessness. But there are ways to help such people pay their bills. The city works out payment plans with those lucky enough to know about the option.

The Nutter administration and City Council are working on a more uniform tax-collection policy that enhances the existing income-based payment-plan program and punishes chronic deadbeats.

Philadelphia has made efforts to go after tax-delinquents over the years, but few have been sustained. The proof is the city's ranking among the worst in the nation when it comes to collecting taxes. While other cities have been able to kick up their collection rates to about 95 percent, Philadelphia wallows pathetically around 86 percent.

Mayor Nutter recently announced yet another assault on deadbeats. He promised to spend $25 million on technology and $15 million on staff to bring in an estimated $260 million in back taxes over the next five years. Let's hope this effort, unlike its predecessors, is effective and sustained. Philadelphia can't afford to carry deadweight on its broken back anymore.


Written by Ed Willie for the Philadelphia Inquirer on March 12, 2013

Inquirer Editorial: Philadelphia's blight factory

The Philly Post: Investigation: City’s Tax Delinquency Problem Way Worse Than We Thought

Except for Detroit, no city in America is more inept at collecting its property taxes than Philadelphia. A mega-investigation by the Inquirer and Plan Philly has found that the city’s delinquency problem is nothing short of disastrous.

It depresses the overall tax base by at least $9.5 billion, saps an average of 22.8 percent of the market value of all single-family homes in Philadelphia, and deprives City Hall and the cash-strapped School District of $298 million a year.

The multi-part series, led by Philadelphia magazine writer-at-large Patrick Kerkstra, kicked off Sunday with a piece on what abandoned, delinquent homes and parcels hurt neighboring property values, how much delinquents sap municipal resources, and why the city’s been so bad at collecting taxes. On that last point, Kerkstra points out that a 1992 law requires Philadelphia to ”proceed on tax claims after one year of delinquency, unless the owner or an interested party enters into a payment agreement.” Given the thousands of property owners who don’t pay taxes, Philadelphia clearly hasn’t followed that law.

Today’s entry focuses on the property owners–many of whom are AWOL and not based in Philly–who profit from the arrangement.

Of the roughly 100,000 tax-delinquent properties in Philadelphia, at least 57,500 are owned by investors, not occupants. These are parcels deeded to suburbanites and Floridians, developers and Brooklyn-based holding companies, small-time local speculators and real estate tycoons with dozens of properties to their name.

Check out the whole series here. It’s an eye-opener. [Inquirer/Plan Philly]


Written by Simon van Zuylen-Wood for The Philly Post on March 11, 2013

 

The Philly Post: Investigation: City’s Tax Delinquency Problem Way Worse Than We Thought

GoErie.com: Paper: Philadelphia tax delinquents cost city, neighbors

PHILADELPHIA -- Tax-delinquent properties in the city of Philadelphia have hurt the tax base, eroded the equity of thousands of homeowners and starved city government and the school district of badly needed funds, a Philadelphia newspaper said.

The newspaper said a yearlong Inquirer/PlanPhilly investigation of the tax enforcement system found that delinquency depresses the overall property tax base by at least $9.5 billion, almost 10 percent of Philadelphia's taxable real estate.

The delinquent properties lower the worth of neighboring homes by an average of 22.8 percent, and 96 percent of all single-family homes in the city have lost value because of nearby delinquents, the paper said.

Eliminating such delinquencies could increase the tax base by almost $300 million a year.

And while some of the properties are owned by low-income homeowners unable to pay their bills, at least 59 percent of all delinquent real estate in Philadelphia is owned by landlords, speculators and investors who don't live on-site, the paper said.

Other large U.S. cities, on average, collect 95 percent of what they are owed in property taxes the same year those taxes are due, and the average collection rate climbs to 99 percent in later years with enforcement measures, the paper said.

Philadelphia's collection rate has come in well below those rates, averaging 85.6 percent annually in recent years.

With taxes scheduled to go up for most homeowners this year, the many delinquent homeowners have become a political issue for council members and Mayor Michael Nutter, who in February vowed a $40 million investment in enforcement over the next five years.


Written by the Associated Press and published on GoErie.com March 11, 2013

GoErie.com: Paper: Philadelphia tax delinquents cost city, neighbors

We can help!

Yesterday my five colleagues and I introduced a series of resolutions to hold hearings on the issue of real estate tax delinquency.  

When my parents were growing up they shared a goal common to their generation: to own their own home.  Times weren’t always easy for my parents.  They had to work hard to make ends meet.  Between putting my brothers and sister through school and keeping food on the table, sometimes things got a little tight.

But my parents paid their bills.  They paid their taxes.  They paid off their mortgage.   

There are a lot of people in my district who own their homes like I do and my parents did.  And some of them have fallen behind on their real estate tax payments.  Everyone should pay his or her fair share.  And when they can’t, they need to do the responsible thing and ask for help.  

Our number one goal is to keep people who live and work here in Philadelphia, in their homes.   That’s why anyone who really needs help can get on a payment agreement for delinquent tax.  

The system can be a tough to navigate sometimes.  And figuring out what the rules are for those payment agreements isn’t always easy.  But if you call your Council person, we can help you navigate the system and get you pointed in the right direction.  

If you have a question about these issues, I encourage you to submit your question through this website, or by contacting one of our offices.  We plan to hold hearings in the next 8 weeks and we want to make sure your question gets answered.

And, if you need help, don’t wait.  We can help.  Call us today.

 

We can help!

A Wintery Mix

As I was driving to City Hall from The Northeast this morning, I heard the weather forecast and it sounds like more snow is on the way. My thoughts soon drifted into a mix of how the City handles winter storms and our newly introduced Taxpayer Fairness Initiative. I know it sounds like an odd combination, but don't we all dart from one thought to another while driving?

Anyway, when it snows in Philadelphia we all have to deal with it. Property owners have to clear a path at least 30 inches in width six hours after snow stops falling from the sky. The City is on the hook for snow and ice removal from thousands of miles of streets and highways. So, we all share in the responsibility to make getting around after a storm a little easier and safer.

The same is true with property taxes. We all share the burden. The overwhelming majority of Philadelphia property owners pay their taxes. I say, thank you to the good citizens that make the necessary sacrifices and take the appropriate action to pay their share. If you are part of the small group not paying your share, please follow the good example of your neighbors. Also, think about this, some of that tax revenue goes to clearing snow from our streets.

So should old Jack Frost pay us another visit, please be careful, look out for those who might have difficulty getting around and keep warm.

A Wintery Mix