Of all the debates about property taxes in Philadelphia, there is no dispute about how bad we are at collecting them. The current tab is nearly $400 million, making us one of the worst cities in the country when it comes to collections.
That should outrage anyone who a) manages to pay their taxes and b) would like a functioning city with more than minimal services.
City Councilman Allan Domb campaigned for office in 2015 with a focus on collecting the debt. Council President Darrell Clarke and Council members Maria Quinones Sanchez and Jannie Blackwell fret about the debt. They worry not only about the accuracy of the city’s property records — and have binders full of anecdotal evidence to prove it — but about forcing poor homeowners out into the street. That’s a claim that falls flat because the city has an extremely forgiving repayment plan for homeowners.
Domb in mid-November finally introduced his long-anticipated legislation to securitize the city’s nearly 69,000 outstanding residential and commercial delinquent property tax bills. That means selling the debt to firms who will collect it.
Clarke, Sanchez, and Blackwell introduced a version of the same legislation on the same day with one key difference — it exempted all residential properties in their three districts.
That means homeowners and landlords get a pass in nearly a third of the city.
Bad enough that Council members would endorse the outright unfairness of exempting their own corners of the city from paying their share. But worse, such a move heavily favors landlords who make up a large percentage of tax deadbeats.
According to an Inquirer and Daily News review of records, in Clarke’s Fifth District, there are three tax delinquent landlord-owned properties for every one owner-occupied property with back taxes. In Sanchez’s Seventh District and Blackwell’s Third District, landlords on the list outnumber homeowners two to one.
Clarke has also considered adding Councilman Kenyatta Johnson’s Second District to the exemption, where landlords with delinquent property taxes also outnumber delinquent homeowners by two to one.
Across all 10 Council districts, landlord-owned residential property tax debt was $151 million as of Sept. 30. That is 38.3 percent of the total owed to the city. Commercial and industrial properties make up a similar amount, $153 million, or 38.8 percent.
Owner-occupied residential delinquent property tax is the smallest of the three categories at $90 million, or 22.9 percent.
Why can’t the city simultaneously clean up its delinquent property tax data while pursuing the money it is owed?
Domb’s legislation gives the city property-by-property control throughout the securitization process. So if the data is bad, the property can be pulled from the list. If the property is owner-occupied, that person can be steered into the city’s collection program. If the property is landlord-owned residential or industrial or commercial, it can be securitized.
Cleaning up the collection process can also clean up the data problems.
Aggressively collecting the money, while dealing compassionately with homeowners with real financial problems, isn’t mutually exclusive. If you want to fix a flawed system like property taxes, don’t install more flaws.