Phila. can do a lot more to collect back taxes
Can Philadelphia do a lot more than the Nutter administration did to collect taxes? The Revenue Department says it collected more than $100 million in delinquent real estate taxes last year, the most ever; boosted tax foreclosure filings to more than 1,000 a month in late 2014, up ninefold from a year before; raised more than $30 million
Note: Nicholas Panarella's last name was misspelled in a previous version.
Can Philadelphia do a lot more than the Nutter administration did to collect taxes?
The Revenue Department says it collected more than $100 million in delinquent real estate taxes last year, the most ever; boosted tax foreclosure filings to more than 1,000 a month in late 2014, up ninefold from a year before; raised more than $30 million this fiscal year by revoking business licenses and "sequestering" rents from tenants of deadbeat businesses; and now is seeking a vendor to sell tax liens online.
The city is also adding document scanning, credit-card payment, electronic deposit, and other basic payment aids that banks have had for decades.
Philadelphia voters in Tuesday's primaries backed a couple of citywide Council candidates who want to squeeze even harder.
Allan Domb, the Center City condo king who bested two sitting councilmen to win a Democratic ballot spot, ran on an aggressive collection program, telling voters he could bring in hundreds of millions of dollars for school or pension funding.
"On the campaign trail, there was a common thread of people saying, 'What are we doing with all those uncollected taxes?' " Domb told me, citing a 2013 report showing $1.2 billion in unpaid real estate, business, and wage taxes, and water and gas fees on the city's books, some from the Rizzo years. "Citizens are infuriated that someone else isn't paying taxes."
David Oh, the top Republican vote-getter, said: "As much as they want to support the schools, homeowners are not ready to pay a lot more. They want to see delinquent taxes paid first."
Oh's bill to automatically shift year-old delinquencies to collectors was opposed by the Nutter administration and died in Councilwoman Marian Tasco's finance committee after she said she didn't want to have to hear from poor people worried about losing their homes.
Domb says hundreds of millions in past obligations should still be collectible, much of it from out-of-town investors. He'd like to copy New York, which sold bonds backed by its delinquent taxes, and hired pro servicers to collect them. The city still owns the debts, so it can prevent "horror stories" of poor people kicked out for small sums, Domb says.
Philadelphia should go further, as it did when Ed Rendell was mayor, says Nicholas Panarella, whose aggressive Municipal Tax Bureau lawyers went after suburban city-wage-tax scofflaws and out-of-town pro athletes.
Panarella, testified to Council last year that the city's post-Rendell shift away from suing scofflaw taxpayers toward voluntary compliance and third-party collectors makes it tougher to collect. "Tax avoidance hurts people who comply," he told me.
The Nutter administration "has gone to great lengths to try to improve collections," notes veteran tax lawyer Stewart Weintraub. But "I agree there's a lot of money out there to be collected."
"Anything would be better than the present situation," says Blue Bell tax accountant David L. Zalles. "The city must become more proactive."
I asked Derek Green, top vote-getter in Tuesday's at-large Council race, whether the new Council would push tax delinquents any harder.
Given the School District's deep need, "we'll be taking an even more aggressive stance," Green promised. "Allan and I talked about this even before he ran for office."
Green, a former Tasco aide, also pledged not to be "pressuring residents who have been through an unfortunate situation." He said he hoped to get Domb and school-funding agitator Helen Gym, the third new Democrat to gain the at-large ballot, to back a common revenue and spending agenda, even though they are politically "at the two extremes."
Even if the at-large members join forces, district Council members "will have a hard time moving forward" with anything that looks as if it will squeeze their constituents, Oh said.
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