City plans to go aggressively after back taxes

Two weeks ago came pieces of mail notifying Philadelphia property owners that their next year's taxes were about to go up.

Beginning today, tens of thousands of other notices will go out telling city real estate owners to pay their old bills, or chance losing their homes or businesses at sheriff's sale.

This latest batch of mailers, to be sent to 23,000 city property owners, results from a stepped-up tax collection program announced by Mayor Street yesterday that he said would generate $235 million during the next five years.

Of that, $109 million would go to the city, and $126 million would go to the Philadelphia School District, including a whopping $42 million in new school funds for next year.

"We will spare no one. There will be no sacred cows in this program," Street said at a City Hall news conference. So expansive is the effort that the city law department will hire 25 new staffers.

At the same time, the mayor sought to reassure low-income homeowners and others who may not be able to pay what they owe that the city would help them create a payment plan, as has been past practice. Street also said the city would set aside a $1.5 million "safety net" to provide support services and loans.

"This is not an effort to take anyone's property," he said. But if the letters are ignored, that is precisely what may happen, and as soon as next May, according to the city solicitor.

A map displayed at the news conference showed a huge concentration of delinquent properties were in Southwest Philadelphia and North Philadelphia, west of Broad Street, some of the city's poorest neighborhoods.

The average real estate delinquency was $8,965, and dated back 13 years, Street said.

This is not the first time the city has tried to get tough on taxes. Tens of thousands of dunning letters have been sent out since 2005, shortly after the city hired a Texas-based tax collection firm, Linebarger Groggan Blair & Sampson, to do the work.

This expanded effort is also being carried out by Linebarger through its existing contract. The firm, which has had a Philadelphia office since 1997, was awarded a four-year, $21.9 million contract and has been paid $13.3 million to date, according to the City Controller's Office. The contract expires June 30, 2008.

Street said the genesis for going after more delinquent taxpayers now was the school district's cash shortage, which in turn led him to ask the law department last spring to find ways to generate new money as interim relief.

Yesterday, it was clear that Street had specific ideas about how the school district should spend some of its portion of the anticipated dollars.

Without saying the money was contingent on anything, the mayor strongly recommended four uses for it: restoring non-teaching assistants whose jobs were cut, creating a conflict-resolution program to teach students anger management, funding additional parent-truant officers, and opening after-school beacon programs year-round.

Street's suggestions, he said, were so preliminary that he publicly urged Tom Brady, the school district's interim chief executive officer who was also at the announcement, not to answer reporters' questions. Brady complied until later in the news conference.

Irv Acklesberg, who worked on housing issues for 30 years at Community Legal Services before resigning last year to run for City Council, said of the initiative yesterday, "On the face of it, there is nothing to quarrel with."

But he also noted that Street was counting on the recipients of the tax notices actually paying attention to them - something that in his experience doesn't necessarily happen. "They're sick, they can't read, they're depressed. . . . There will be lots of people who don't understand this is serious."