AS OF YESTERDAY afternoon, the $2- per-pack cigarette tax that the city wants to impose to help the school district with a $304 million funding gap was close to being extinguished in Harrisburg, which must approve the move. Since City Council was counting on that source for a big part of the aid the schools need, it's unclear what the next move will be; the state has made no progress in finding money that the schools have asked Harrisburg for, either.
But that's not the only thing that keeps the future of Philadelphia's schools hanging in the balance. A report released last week from the Pew Charitable Trusts has us worried that another source of potential funding for the schools could come up short. The report assesses the likelihood of the city's ability to collect on the $515 million in outstanding property taxes, penalties, fees and projects, finding that only about 30 percent of that money is actually collectible: $120 million in taxes and $35 million in fees. Early on, the mayor proposed a school-funding package of $95 million that included $28 million in tax collections.
The mantra of $515 million has been widely cited lately, not only as an answer to a host of the city's revenue problems, but as a reminder of just how bad we've allowed the problem to get. The Pew report adds a further arrow by putting the tax-delinquency problem in context with big cities across the country, illustrating just how dysfunctional we've been for decades. Nearly 18 percent of Philadelphia's taxable real estate - more than 100,000 parcels - was delinquent in April 2012. More than half of the total outstanding are from delinquencies more than a decade ago.
More disturbing: We've seen no serious change in the rate of delinquencies in the past decade, either. Just in 2011, 9 percent of property taxes went uncollected (more than twice the rate in the 36 other cities the study reviewed). The rate worsened dramatically from 2006 through the recession.
The city has been collecting more aggressively and nearly doubled its collections between 2011 and 2012. The mayor just installed a new revenue-collection chief. Despite these efforts, people continue to fall delinquent.
Controller Alan Butkovitz has referred to a "culture of nonpayment," but the true problem is the culture of non-collection, and while the city scrambles to try to correct this history, it has to confront what's behind that culture. It should be lost on no one that the city's high poverty rate cannot be divorced from its delinquency problem - nor its education problem. As the report points out, "Allowing a property owner to refrain from paying taxes amounts to a form of undeclared public assistance financed by those residents who do pay their taxes. Whether to collect on poor owners through foreclosure is a civic and social-policy decision more than a tax-enforcement problem."
Whether this decision has been a conscious one, or one stemming from an inability to confront the issue, it's clear that the city's leaders must start grappling with this culture of non-collection. Otherwise, collecting on delinquencies will be a never-ending, never-winning cycle that in the end harms everyone.