Delinquent property tax collection on the rise

Posted: May 28, 2014

THE CITY of Philadelphia collected more than $45 million in back property taxes in the first four months of the year and cut the number of tax-delinquent properties by about 30,000 - a reduction of 25 percent from the previous year, records show.

Revenue commissioner Clarena Tolson said the $45 million represents about half the $91 million in delinquent property-tax revenue collected for all of last year. It poured in from properties whose balances were eliminated through payment or sheriff's sale, and through partial payments on outstanding bills, she said.

"Once people realize the city has changed its approach to delinquency, they tend to pay," Tolson said. She credits her department's collection success to "a concerted and strategic effort to support the school district through aggressive collection of taxes."

At the end of 2013, the city had 126,000 tax-delinquent properties, owing more than $575 million in back taxes on file, according to records obtained by the Daily News. By April 15, the number of delinquent properties - most of them fewer than three years behind - had dropped by about 30,000, records show.

The largest tax debts cleared included $8 million collected through the settlement of the former Foxwoods site, at 1499 S. Columbus Blvd., and just over $900,000 paid by Penn Wynn Inc., owner of a large apartment complex at 2201 Bryn Mawr Ave., which owed four years' worth of back taxes.

Penn Wynn paid up, Tolson said, after the city threatened to sell the property at sheriff's sale to collect the debt.

"It's great they're able to really start collecting," said Jeff Goldman, of South Philadelphia, co-founder of Scioli Turco, a nonprofit that rehabs derelict properties in Philadelphia.

"The school district really needs ," he said, referring to a portion of the tax revenue that will go to help fund city schools. "In other cities, if you don't pay for two years, you've got to scramble. It's about time."

Tolson said part of the revenue department's more aggressive collection efforts involve sending out bills for 2014 taxes, which were unpaid by the end of March. Any account with an unpaid balance from 2013 had a lien placed on it on Jan. 1, and was sent to a collection agency, she said.

For those who still refuse to pay, the city has any number of other tools at its disposal.

The city has begun revoking commercial licenses for delinquent taxpayers and pushing more properties to sheriff's sale.

In addition, the city can have delinquent properties placed with a third party through a process known as sequestration. The third party would then collect rents and turn them over to the city until the tax debt was paid in full. Since the program started in October, the city has collected $4.9 million from about 350 accounts, Tolson said.

Meanwhile, Act 93, which went into effect this year, allows the city to place liens on property owned by tax deadbeats outside Philadelphia County. So, if you live in Bryn Mawr, but owe property taxes in Philly, watch out.

Tolson said her department is working with agencies around the state to develop a process to initiate the liens. She said she hoped to start placing liens on properties in the next few months.

For the average owner-occupied home that is behind on its taxes, Tolson noted that the Revenue Department has been holding outreach meetings to make people aware of payment programs that can reduce or eliminate interest and penalties. Senior-citizen assistance programs are also available.

Otis Bullock Jr., executive director of Diversified Community Services, a nonprofit social-services agency based in Point Breeze, said he worries that the new policies will negatively affect residents.

"Many families in Point Breeze cannot afford to pay these increased taxes, especially given these new aggressive policies and deadlines," he said. "Diversified wants to ensure our Point Breeze residents receive the necessary support during these troubled times."

But Mayer Krain, of Northeast Philadelphia, said he welcomed the city's more aggressive collections efforts.

"It's a long time coming," he said. "It hurt a lot of people, not collecting on a timely basis."

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