The City of Philadelphia has sent warning letters to a newly identified group of tax delinquents - about 2,500 retirees or their beneficiaries who are receiving city pension checks but owe the city nearly $13 million for unpaid real estate, business, and other taxes.
Under federal law, the city can grab up to 25 percent of their pension checks as long as tax bills go unpaid, according to the Nutter administration.
City Revenue Commissioner Keith Richardson said city tax collectors hope to work out payment agreements instead, tailored to the needs of individual taxpayers.
"We like to get 25 percent down, but everybody might be in a different category financially," Richardson said. "We can work with them in a case-by-case situation."
The city declined to provide the names of individuals from whom it is seeking money.
In some cases, involving business-privilege taxes and income taxes, the names of delinquents are not considered public record.
In other cases, where the city has already obtained liens against individuals, their names may be publicly disclosed, but the administration has so far declined to identify them - still holding that piece of leverage in hope that the delinquents will pull out their checkbooks.
The city sent out 2,500 warning letters to the group Friday, telling them that a portion of their pensions might be garnisheed if they did not contact the city to make payment arrangements.
The group includes both retired city employees and their beneficiaries. They owe a combined $12.9 million, the city said, with an average debt of more than $5,100.
"Real estate is the biggest; business taxes are not far behind," Richardson said.
In some cases, the retired workers may be corporate officers of companies that owe business taxes to the city - but their pensions may be targeted anyway, according to the city.
The Inquirer was unable to reach any of the four Board of Pensions and Retirement members representing city workers.
Bill Rubin, a former pension board member who is now a pension consultant to AFSCME District Council 33, representing most of the city's non-uniformed personnel, said he thinks the city's latest move against tax delinquents is appropriate as long as the city is confident that its tax-delinquency records are accurate.
"I think it's fair, it's something the city should be able to do, but they should take into account individual circumstances," Rubin said. "It may be a situation where a single person is in the house trying to survive, and their individual pension is next to nothing. . . . They might be able to put a lien on the house instead of insisting on taking someone's pension money."
In January 2010, City Controller Alan Butkovitz, working with the Nutter administration, initiated payroll deductions against more than 400 active city workers who owed $2.6 million in delinquent taxes to the city. The deductions ranged from 5 percent to 20 percent of gross pay, Butkovitz said.
His action followed an Inquirer report in July 2009 that found about 2,000 city workers and spouses past due on their property-tax bills, owing a total of about $5 million.
The city's crackdown on current employees was short-lived, however. "It's Our Money," a joint reporting project between the Philadelphia Daily News and WHYY, reported in August that the city had neglected to follow up on city employees who became tax-delinquent in 2010 and 2011 - a group that included city Fire Commissioner Lloyd Ayers, who owed $1,100 in real estate taxes on a couple of properties. Ayers paid the bill after Fox29 disclosed the debt.