State Senator Mike Stack discusses property taxes with Tacony homeowners, Thursday, April 26, 2012, Philadelphia, Pa. (Maria Pouchnikova)
Two Northeast legislators said the city’s plan to reassess properties is nothing more than a back-door tax increase that will hit local homeowners hard, and they want the city to do more to collect what is owed before it hikes taxes.
Standing on the front porch of a Tacony home last Thursday, state Sen. Mike Stack (D-5th dist.) and state Rep. Mike McGeehan (D-173rd dist.) said they were introducing legislation that would soften the impact of rising taxes.
Mayor Michael Nutter recently announced a plan to reassess properties in the city. Some values will go up and some will go down, but the move is expected to generate millions of dollars for a city that’s hard up for cash.
Those new assessments aren’t expected to be finalized until fall. In the meantime, the Nutter administration has been prodding City Council to approve legislation that would permit tax rates to be established in line with the new assessments.
The administration has projected that the new assessments would bring in roughly $90 million in new revenue — revenue targeted for the School District of Philadelphia — and translate to a roughly 8.5 percent increase in the city’s total property-tax revenue.
Nutter has rejected the claims of some Council members that his plan amounts to a tax increase; he has insisted that rising property values will help boost those revenues. But Stack said last week that, although he sees the necessity for property reassessments, Nutter’s plan is ill-conceived.
“It’s a knee-jerk grab for revenue,” Stack said from the porch of Georgeanne Labovitz’s house on the 7000 block of Tulip St.
The lawmakers have introduced bills that would give owner-occupied properties an exemption from increases to city and school taxes.
Further, Stack’s measure would give home-owning senior citizens with annual incomes of $60,000 or less the option to defer paying tax increases until they sell. Those who have lived in their homes for 20 years or more would get the same break, and recently unemployed homeowners would get one-year deferments, with what is owed collected at the time of the property sale.
Stack also has introduced a bill that would bar the city from raising property taxes if its overall tax-collection rate were less than 95 percent.
The senator said Philadelphia residents already have endured two temporary tax increases. If the city wants more money, he said, it should go after delinquent taxpayers who owe $472 million, not the people who have been keeping current.
“We penalize responsible taxpayers,” he said.
“People who maintain and improve their homes are the people who will be hurt by this tax increase,” McGeehan agreed. “Philadelphia is a tax-killer of a city.”
Labovitz said her taxes have gone up each year for the last three years. She criticized city services — for example, she sees fewer firemen and police these days, she said — and she’s looking for a part-time job to help pay her taxes.
“You can’t keep taking from us,” Labovitz said.
It’s not the legislature’s job to enforce tax collection in Philadelphia, McGeehan said. His colleague Stack suggested that the city needs to be more efficient in its collection of taxes.
Taxes are owed on 103,000 properties in Philadelphia, according to Mark McDonald, spokesman for Mayor Nutter.
City Controller Alan Butkovitz, while addressing members of the Greater Bustleton Civic League on April 25, said that 20 percent of the properties in Philadelphia are tax-delinquent.
Stack put the total tax bill owed the city as of last year at more than $470 million.
Much more had been owed. A tax-amnesty program in mid-2010 brought in more than $70 million, and the city has intensified its efforts to collect the past-due taxes, said Deputy Revenue Commissioner Frank Breslin.
Collection agencies have been engaged. City employees who had owed taxes either paid up, worked out payment plans or had their salaries garnished. City government retirees will have their pensions garnished if they don’t pay their taxes. You can’t do business with the city, get a job with the city, or get a zoning variance if you’re not current with your taxes, Breslin said.
The city nudges first-time delinquent taxpayers. Soon, those who haven’t paid this year’s taxes, which were due March 31, will get calls and letters from the city reminding them of their obligations.
Last year, more than 12,000 property owners were told they were late and received word of what would happen if they didn’t pay by Dec. 31, Breslin said. To avoid having interest and penalties tacked on to their bills, and to keep liens from being slapped on their properties, about a third became up to date with their payments, Breslin said.
As of March, he added, delinquent taxpayers still owe the city $418 million.
The city’s fiscal year starts on July 1. From July 1, 2009 to March 2010, the city collected $145 million in delinquent taxes, Breslin said. During comparable nine-month periods in succeeding years, he said, the city brought in $163 million and $174 million.
More delinquent properties are quickly being brought to sheriff sale, and the very threat of that possibility has induced some delinquents to settle up, he said.
Butkovitz, during his recent meeting with the Bustleton civic group, said that taking over a property isn’t a guaranteed way to recover back taxes.
ldquo;There are parts of the city, if we took the property, we couldn’t give it away,” he said. ••
Know if you owe?
If you want to work with the city, do business with the city or get a zoning variance, you have to show you’re current with your taxes.
You can do that online by visiting www.phila.gov/revenue, click on Tax Clearance on the left and then follow the instructions.
If you don’t owe anything, you’ll be able to print out a certificate of tax compliance, according to Deputy Revenue Commissioner Frank Breslin. ••
