Philadelphia collects more than expected from tax-amnesty program

Philadelphia has an additional $40 million in its coffers, thanks to its tax-amnesty program.

But that money will go only a small way toward fixing the city's budget woes, Mayor Nutter said Tuesday.

The extra revenues also herald what the mayor says will be a new era of aggressive tax collection, including criminal prosecutions, as Philadelphia goes after about $943 million in unpaid taxes, interest, and penalties.

That figure does not take into account the $40 million collected. Revenue Commissioner Keith Richardson said Tuesday that he planned to have a more current number soon.

City officials had hoped the amnesty program would bring in $30 million, and included that amount in budget projections for 2010. Nutter said the additional $10 million would not alter plans for proposed budget cuts, because the weak economy has reduced tax revenues.

"We need to be very, very clear. This is not like we just walked outside and found $10 million on the street," he said. "We need every single dime that we can get."

Nutter announced $20 million in cuts to police, fire, libraries and other departments after City Council passed its $3.9 billion budget, and he has asked departments to submit additional cuts of 2 to 4 percent in their 2010-11 budgets. Nutter has yet to decide on which cuts to make, but those decisions are expected in the next 10 days.

On Tuesday, Joan Krajewski, one of the leading voices on City Council for the amnesty legislation, said she believed the extra money should save jobs.

"My hope is that our police and fire departments will not get cut and decreased," she said.

In addition to the $40 million for the city, the School District will get $20 million from amnesty collections.

More than 27,000 delinquent taxpayers participated in the 54-day amnesty program, which ended June 25 and offered residents and businesses the chance to eliminate penalties and half of interest owed if they paid their overdue bills.

At a Tuesday news conference, Nutter said the city was done playing nice with those who failed to pay on time.

"You owe it, and we plan to collect it," he said. "Cases are already being turned over for potential prosecution. They will face swift legal action, as well as stiff fines and penalties."

Nutter said officials from his administration already had discussed the plans with District Attorney Seth Williams, who has agreed to go after some delinquents. Calls to the District Attorney's Office were not returned.

About 90 percent of taxpayers pay on time, Nutter said.

City efforts to improve collections will include:

Calling delinquents as soon as a payment is missed and sending accounts to collection agencies more quickly. Calls will be made by Revenue Department employees.

Continuing to publish the names of the biggest debtors and targeting collections from them.

Continuing to make sure city employees have paid their taxes by deducting overdue amounts from paychecks if necessary. New hires and appointees to city boards and commissions also must have their taxes paid.

Increasing the number of properties sent to sheriff's sale from 200 to 600 per month.

Revoking businesses licenses for companies that do not pay taxes.

The city enacted payroll deductions after an Inquirer report last summer that detailed more than 1,000 property-tax delinquencies among city employees and their spouses.

City Controller Alan Butkovitz had believed the total collected by the city and the School District would be much smaller - about $30 million. Despite the much higher figure, he said he still thought the city could have collected more if it had advertised the amnesty more broadly.

"The more advertising you do, the more you get," he said.