Let's make a deal on tax arrears

MY CITY COUNCIL office has six phone lines that ring continuously through the day, and well into the night, judging by the full voice mailboxes that welcome us every morning.

Nine out of 10 calls involve requests for help. A missed trash pickup or traffic light on the blink, an abandoned car or vacant lot in desperate need of a cleanup are just some of the quality-of-life problems council offices deal with, day in and day out.

But the calls have been shifting to another problem plaguing constituents, one that doesn't just have them dialing their phone, but hopping on the Market-Frankford El and riding to City Hall looking for help.

The problem is property taxes and other city taxes in general such as the business privilege and wage tax and the overwhelming interest and penalties that comes when you fall behind.

Take the case of a grandmother of five who showed up in my office looking for some help with a property-tax problem.

SHE COULDN'T pay her tax bill in 1997 when she owed $1,700. Now, that same bill is $4,200 due to $1,800 in interest, $120 in penalties and $500 in other charges that accumulated over the years.

Along the way, Grandma paid some years in full, but missed others. In fact, her total today is $13,000 in back taxes. Only $6,400 of it is principal, the rest interest and penalties.

Her grown children want to help her out and she wants to start paying down her debt, but $13,000 is serious money. In fact, it wasn't until she was threatened with a sheriff's sale that she finally started to ask for help. The ever-increasing interest and penalty column on her bill scared the daylights out of her.

She knows what she owes - and wants to pay. She bought her home in 1963, and she's determined not to lose it for getting behind in real estate taxes.

Another example: When a small business in my district closed 10 years ago, it received a business-privilege tax bill for a missed payment of $550. Now, after interest and penalties, it's $2,720.30 - going up monthly. The ex-owner would be happy to pay the $550 and clear his name, but the fines keep him from taking action.

With the city more than $1 billion in the red for the next five years, City Controller Alan Butkovitz suggested a property-tax amnesty program that would give citizens who owe back taxes the chance to pay their debts and have the interest and penalty waived during a prescribed time.

Our neighbors in New Jersey did just that - and in two months collected $700 million in back taxes.

I know we'll never recoup 100 percent of taxes owed, but even if we get 10-20 percent, that's a huge chunk of change that could give us the cash flow the city needs to keep jobs, services and programs operating for our citizens.

If Grandma just can't afford the $13,000, that means she isn't going to pay a penny to the city.

But she could manage the principal of $6,400 if the interest and penalties were wiped away. The owner of the small business who closed shop can't afford the $2,700, but he could pay $550.

So, it's time to channel Monty Hall of the famed TV game show "Let's Make a Deal" and try our hardest not to "zonk" our city into more debt, more service cuts and more population loss.

We need to make a deal with the people who owe the city $1.2 billion in back taxes by allowing them to come on down and pay their debt in exchange of waiving the interest and penalty during an amnesty program.

If we don't, who knows what is behind the curtain or trap door? It could be even more cuts in more city services, it could be more job layoffs, it could be a city bankrupted wishing we shoulda, woulda, coulda "made a deal."

I hope my Council colleagues and the administration will support this measure to offer Philadelphians a tax amnesty. It's a win-win deal to benefit both the city and the taxpayer.

City Councilwoman Joan Krajewski represents the 6th District in Northeast Philadelphia.