Mayor Nutter yesterday traveled to Washington, D.C. to take part in a discussion about the fiscal challenges facing local governments -- and how the federal stimulus package has done little to remedy the problems. The talk was sponsored by the Brookings Institution and the National League of Cities and featured three other mayors in addition to Nutter.
Here's an excerpt from a Wall Street Journal story on the event:
Even as economists declare the recession over, local revenues continue to fall. That's because the lion's share of their receipts -- sales, income and property taxes -- are connected to the job market and real-estate prices. Jobs and real-estate prices are expected to lag the broader economic recovery, reducing city revenues for months or years after the technical end of the recession.
"This is unknown for our generation," said Chris Hoene, director of the center for research and innovation at the National League of Cities. Mr. Hoene said it was likely to be 18 to 24 months before local government revenues resume growing.
We've reported before that the stimulus funds didn't do anything for the city's budget shortfalls. The money basically cannot be used to plug budget gaps or save city jobs. And very little of the cash pledged to the city has even arrived yet.
Posted by Catherine Lucey @ 3:18 PM
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Boo-hoo, poor Nutter is not bringing in the tax revenues he expected. Do these politicians realize that they are taxing the average person out of existence. Nutter got his wish to increase the sales tax to 8%. Did that help, no. People just went outside the city to purchase most taxable items or buy less. Why don't you do something worthwhile, like do some real reporting on what irresponsible spending by politicians is costing the taxpayer? No, you will not do that, it takes efford. The new wave journalist only blogs. Have you looked at your phone bill. You have All kinds of fedral and state charges added i.e. Federal line charge, Universal Fee, E911 fee, gross receipts tax, another federal universal fee, federal and state excise taxes. All this on a phone bill, now look at the other bills you receive. These hidden fees are assessed against the phone company then passed onto us. The same will take place with cap & trade, healthcare and any other bill these morons in DC shove down our throats.
I know, why not raise taxes on small businesses. Everyone knows that's a good idea, right Mike?
How do we actually know what impact the stimulus could have had in Philly when the morons in charge couldn't figure out how to maximize the opportunity? While not a permanent budget stop gap, our city reaped far less economic benefit than other major municipalities because this administration can't function.
How did real estate taxes fall? My real estate taxes and property assessment certainly did not fall.
The city has not collected about $400 million in overdue property taxes at foreclosure. This is because foreclosure for municipal revenue contradicts the city's stance on negotiated mortgage foreclosures in some of the minds of the administration, I think. No journalist has done an article on why the city is still so far behind in property tax collection. Most of the properties that owe in my zip code in SWCC are empty, for example. But Smokey, your property taxes are going up to cover this noncollection, in no small part. What gives? Where is the Kerkstra follow up article on overdue property taxes? This is where this money will come from. There won't be another tax lien sale according to the sheriff's website until Feb. 2010, but Nutter is in DC begging for money. How can that be? See for yourself at www.phillysheriff.com and click on "tax lien sale."
Hope City Council gets a transcript to see how the Mayor explains his problems in this forum.
Hope City Council gets a transcript to see how the Mayor explains his problems in this forum.
Junethe4th is right -- where is that miraculous sales tax revenue? Well, most people who choose to shop in the city can also shop online, so increasing the city sales tax pushed these people to choose to shop online more! This means that no only is the city not getting sales tax revenue like it hoped, neither is the state, as many of those sites don't charge PA sales tax, or the right PA sales tax. The basic econ rule is the less you want of something, the more you tax it, and the Philly Dems and sadly even the state level Dems are not taking that lesson to heart, a prescription for lost ground, especially with the upcoming gubernatorial election. Nutter must make his mark by LOWERING wage and business taxes to STIMULATE the economy. The more you want of something, the LOWER you tax it. Look at any successful, even unlikely, state business economy and see how it works. Look at what Nevada has been doing. It works. Do the Philly Dems think they'll survive as the "tax, spend, borrow, repeat" party?
Also, where is the news coverage of the $1 billion in forfeit bail owed the city? This is not "bad debt." This is only bad debt if you don't collect it. These court no shows owe their bail and it is the job of the Office of the Clerk of Quarter Sessions to collect it. If Council is going to be an obstacle (Blackwell recently said that she would give Nutter "problems" if he laid off even a single city employee), then it's time to play hardball with these cheap knock offs that call themselves public servants.
Why is the city even in the business of being a bail bondsman, posting bail? This should be the job of the private sector to post and collect this debt. The city doesn't have to do this for the private market, because the city is terrible at it.
Nutter has not done what he promised. Nutter promised when he ran to aggressively go after money owed the city, and the largest numbers are in property taxes and forfeit bail. He's ignored those areas publicly. His public statements and press releases pointedly avoid any references to them. Why? What gives here? Why is the press so complicit, as well? This is money that Rendell used when he was mayor to bring the city out of bankruptcy. The city was in a worse situation even, than it is now, but Rendell sold property tax lien debt to a private collector for $80 million. This provided the property that created the Philly real estate renaissance to infill developers, also. It was a spur to the moribund economy. Nutter will either have to sell or fix the collection of overdue property tax and forfeit bail to the city to get the hundreds of millions needed to service the huge upcoming mandatory debt payments. There's no more maybe we can get all this magic federal money anymore.
Lest anyone think I'm exaggerating, let me give you a few examples of properties that owe huge overdue property taxes, in some cases not even entering a payment plan, but that simply never face foreclosure, even though they are in a sought after zip code in SWCC where housing is still in high demand. 2320 Fitzwater St. owes $17,278.00 to the city. What county anywhere allows that to occur? Where do you see an abuse of the system like that allowed to go on? The owner of this property last paid taxes in 2003, and fell out of the payment plan again. This owner will likely be allowed, under current guidelines in the Nutter administration, to re-enter a payment plan. The house is empty, unoccupied, and is not in property tax collection status last time I checked. It is not facing foreclosure proceedings, though the criteria is well met.
Here's a house that is unoccupied that owes $17,168.00 to the city, and is not in active foreclosure status, even though it has not paid the $609 a year property taxes since 1996. The occupied half million dollar homes around it on Catharine St. in SWCC pay twice that if not more in property taxes. But this owner is allowed to be underassessed and to not face foreclosure even when there is no evidence of a payment plan. The address is 2149 Catharine St., and while this is one of the properties that was forwarded to a Camden collection agency for action, the owner has "one year" to "make arrangements to pay." How can this be? How can a property so severely delinquent that has met the requirements for notification of sale be allowed still one more year to pay a $17,000+ property tax debt? There is obvious corruption in the system, and Nutter has done nothing to get to the heart of it, and neither has the press.
Here's a house that is occupied, but that still owes $12,645.00 to the city in overdue property taxes. Again, this is in SWCC, where houses are being snatched up even in a recession. 2220 Saint Albans St. owner has not paid property taxes since 2002. The three examples of delinquency I list are in the 30th Ward (the criteria by which the city lists houses for sheriff sale, not zip) and how many of these grossly delinquent properties are on any of the lists of properties to be sold at sheriff sale? Not one. How many of ANY of the 20-35% of delinquent properties in the 30th Ward where the city can find it easy to sell properties for cold hard cash are up for sheriff sale. Not one. Only the worst neighborhoods face sheriff sale, often the most poor owners, in houses with the lowest rate of return. Why is the city not selling houses that owe the most in the most valuable neighborhoods, where it can get the most money?
We are faced with a situation where the city is owed $400 million or so in overdue property taxes that can be collected if the houses are exposed to sheriff sale. There are buyers in zip codes where comparative sales are robust. So why is the city subverting itself? Why is the press distinctly uninterested in why the mechanism that funds schools and services so broken?
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About Chris Brennan and Catherine Lucey
Chris Brennan, a native Philadelphian and graduate of Temple University, joined the Daily News in 1999. He has written about SEPTA, the Philadelphia School District, the legalization of casino gambling, state government, the mayor, the governor, City Council and political campaigns.
Catherine Lucey joined the Daily News in 2002. Since then she has written about murderous drug gangs, political protesters and Harry Potter. For the past two years, she covered the 2007 mayoral election. Now that the battle is over, she has moved down to the City Hall bureau where she will report on the Nutter administration.
Catherine Lucey joined the Daily News in 2002. Since then she has written about murderous drug gangs, political protesters and Harry Potter. For the past two years, she covered the 2007 mayoral election. Now that the battle is over, she has moved down to the City Hall bureau where she will report on the Nutter administration.
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