Property-tax deadbeats don't fear the city

Posted: June 13, 2012

A city trying to scrape up enough money for its schools should be ashamed that it is owed $515.4 million by property-tax delinquents. That's 9.3 percent, or almost $44 million, more than last year, and it seems the number just keeps growing.

As noted Sunday in a Currents article by Patrick Kerkstra, Philadelphia is the worst among major cities in going after property-tax deadbeats. Other cities with high poverty rates, including Detroit and Cleveland, do a better job. Meanwhile, Philadelphia muddles along much as it has for more than two decades, and despite the urgency for more revenue after the recession.

This city has created a toxic scofflaw culture in which cynical property owners have little to fear if they don't pay their property taxes because the city government seems afraid of cracking down on poor homeowners who would lose their houses if it were stricter. But the city's compassion is irrational, given the fact that it offers tax payment plans so the poor can avoid eviction.

It's time for Philadelphia to outline a clear, consistent tax-collection policy that protects genuinely destitute property owners and goes after hardened delinquents who have taken advantage of the city's laxity and ineptness.

A total of about 103,000 parcels carry delinquent tax bills. About 10,000 are entangled in bankruptcy proceedings and can't be collected for the moment, and another 11,000 are under some sort of payment plan.

Deadbeats thrive in a system with unpredictable rules. The Nutter administration, City Council members Bill Green and Maria Quiñones Sánchez, and the legislature say they want to clarify the rules, but they're hung up on process.

Council wants the city to seize property from owners a year behind in their taxes. The administration, understandably, doesn't want to increase its property inventory. But it's time to end the party for the owners of 15,000 parcels who are 15 or more years behind on their property taxes. Anyone that far behind on his taxes probably isn't going to pay up.

It's hard to know if 2,100 deadbeats who are 30 years or more behind in their taxes are still among the living.

The city should follow through on its stated plans to hire another collection agency, dun property owners as soon as they fall behind on their taxes, and target landlords with multiple delinquencies for enforcement. It also needs to come up with a coherent policy on which types of properties it would move into sheriff's sales, where it is hoped they can become part of a land bank that would be available to developers.

None of this is impossible. The administration recently unveiled a uniform policy on how it would sell the city's estimated 9,000 parcels of vacant land, which promises to put at least some of those properties into productive use.

As the city asks more of property owners with a new assessment system, now is the time to also build an enduring and predictable property-tax-collection system.

There are legitimate disagreements between the administration and Council over how hard the city should press tax delinquents, but they shouldn't waste time and money arguing. There are 515.4 million reasons to quickly end the debate and fix a problem that couldn't be more obvious.

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