City Controller offers ideas on nabbing tax deadbeats

Posted: November 21, 2013

Philadelphia City Controller Alan Butkovitz says he has found ways the city can better collect delinquent property taxes, a historic problem that gained new urgency this year as the tax system was overhauled.

In a report to be issued Wednesday, Butkovitz looked at eight "peer cities" and found that only Detroit did a worse job collecting property taxes within the fiscal year they were due.

The report cites "problems . . . in every phase of the city's tax collection and enforcement process," and is critical of the "inefficient and technologically inept" efforts to sell foreclosed properties at sheriff's sales.

The report also says Philadelphia's inability to do better at collecting property taxes has cost the city and its schools $60 million in each of the last two years.

Many of the problems long have been identified - the amount owed to the city in back taxes, penalties, and interest has been accumulating for decades and stood at $522 million in April.

City Council held hearings on tax delinquency this year, and a Pew Charitable Trusts report estimated $155 million in back taxes was collectible.

Mayor Nutter announced a series of efforts to improve collections, including the creation of a new post in his cabinet, the chief revenue collections officer.

The city has increased the number of properties offered for sheriff's sale, and fiscal year tax collections were up this year, said Finance Director Rob Dubow.

The city has not moved closer toward a tactic endorsed in the Butkovitz report - selling liens placed on tax delinquent property to third-party investors.

The report estimated that liens on two-thirds of the 99,000 tax delinquent properties would be attractive to investors.

The report also says the city needs to place an emphasis on preventing delinquencies, particularly by reaching out to the large number of homeowners without mortgages.

The report recommends allowing those homeowners to pay taxes in monthly installments. A bill that would allow monthly installments is nearing passage in Harrisburg.



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