City offers some property tax aid

In mid-Oc­to­ber, the city an­nounced it will help some homeown­ers who have fallen be­hind in pay­ing their prop­erty taxes to get cur­rent and stay cur­rent. They can ac­cept that help, or else face fore­clos­ure. 

Or, those homeown­ers, along with every­body else who owes un­paid taxes to the city, might face something else. As Oc­to­ber ended, City Coun­cil passed a meas­ure that would al­low the city to sell de­lin­quent tax­pay­ers’ debts, the li­ens put on their prop­er­ties, to third-party in­vestors, who pay what is owed, giv­ing the city its money and cut­ting what the city must pay to col­lect its over­due taxes.

New Jer­sey mu­ni­cip­al­it­ies, for ex­ample, use tax li­en sales to bring their tax-col­lec­tion rates close to 100 per­cent. Cherry Hill’s is about 99.9 per­cent, and Ne­wark’s is more than 96 per­cent. Phil­adelphia’s rate, de­pend­ing on whom you ask, is between 86 and 91 per­cent, a fact that those who do pay re­gard with no small de­gree of bit­ter­ness.

The tax li­en sale passed, 15-2, now goes to the may­or, who can sign it in­to law or veto it. Over­rid­ing a veto re­quires 12 votes. If the may­or goes along, then the or­din­ance takes ef­fect on Nov. 15 and the Rev­en­ue De­part­ment will have to work out how li­en sales will be or­gan­ized.

The meas­ure was in­tro­duced in the spring by Coun­cil­men Bill Green, Dav­id Oh, Bri­an O’Neill, Bobby Hen­on, Jim Ken­ney and Mark Squilla. The only mem­bers to vote against it were Maria Quinones Sanc­hez and Jan­nie Black­well. 

Sanc­hez, Green and oth­ers, however, in­tro­duced the oth­er plan to col­lect de­lin­quent taxes that the city is rolling out now.

Green es­tim­ated li­en sales could knock down the city’s roughly half-bil­lion dol­lars in de­lin­quent real es­tate taxes by $50 mil­lion to $60 mil­lion each year.

“This is an im­port­ant tool that we have to raise both ad­di­tion­al funds for the city and school dis­trict,” Green stated in a news re­lease. 

In talk­ing up the idea in April, O’Neill had said li­en sales would get money to the city and keep it out of the col­lec­tion busi­ness.

“Li­en sales can help us end our city’s un­for­tu­nate cul­ture of non­com­pli­ance,” said Hen­on. “People have a re­spons­ib­il­ity to pay their taxes, and we have the re­spons­ib­il­ity to make sure our city and schools get the funds they are en­titled to.”

Quinones Sanc­hez, who joined Green in in­tro­du­cing the le­gis­la­tion for Own­er-Oc­cu­pied Real Es­tate Pay­ment Agree­ment in the spring, saw a down­side in li­en sales and op­posed it. 

A com­plaint about li­en sales is that the debt can be scooped up by in­vestors from out­side the city.

“If they sell the li­ens and I have to go to China to find out who bought it, that could totally destabil­ize a neigh­bor­hood,” she said in an in­ter­view a week be­fore the tax li­en sales meas­ure passed.


In an Oct. 16 news re­lease, the Rev­en­ue De­part­ment out­lined a pro­gram in which, based on in­come eli­gib­il­ity, that will steer own­ers who live in their own homes to­ward pay­ing down their out­stand­ing tax debt.

The four-tiered pro­gram is based on a City Coun­cil or­din­ance, 120054, passed earli­er this year. The city an­nounce­ment, however, made no men­tion of the meas­ure, which was in­tro­duced by Sanc­hez, Green and Coun­cil­man Curtis Jones and co-sponsored by O’Neill, Hen­on, Squilla, Black­well, Oh, and mem­bers W. Wilson Goode Jr., Den­nis O’Bri­en and Mari­an Tasco.

The Own­er-Oc­cu­pied Real Es­tate Pay­ment Agree­ment will be offered to de­lin­quent prop­erty tax­pay­ers in a sys­tem based on fam­ily in­come and size.

Us­ing a fam­ily of four as an ex­ample:

• Those with monthly in­comes of $4,622 and high­er must pay the full amounts of past due prop­erty taxes, in­clud­ing in­terest and pen­al­ties. Monthly pay­ment amounts will be set at the dis­cre­tion of the city’s Rev­en­ue De­part­ment.

• Those with monthly in­comes from $3,301 to $4,621 must pay 10 per­cent of their monthly in­comes. They are en­titled to waivers of 100 per­cent of ac­crued pen­al­ties.

• Fam­il­ies with monthly in­comes from $1,981 to $3,300 must pay 8 per­cent of their monthly house­hold in­comes. They are en­titled to waivers of 50 per­cent of the in­terest and 100 per­cent of the pen­al­ties ac­crued on their de­lin­quent taxes.

• Those with monthly in­comes of zero to $1,980 must pay the city 5 per­cent of their monthly in­comes, but no less than $25 per month. All in­terest and pen­al­ties will be waived.

To qual­i­fy and con­tin­ue with the pay­ment plans, ap­plic­ants must re­main cur­rent or un­der agree­ment for cur­rent and fu­ture real es­tate taxes. The pen­al­ties for not liv­ing up to an in­stall­ment agree­ment with the city is to be dropped from the pro­gram and face speedy fore­clos­ure.


Ac­cord­ing to in­form­a­tion on the bill signed by May­or Mi­chael Nut­ter in June, Phil­adelphia has the least-ef­fect­ive tax-col­lec­tion sys­tem of the na­tion’s largest cit­ies, with 110,000 de­lin­quent par­cels that rep­res­ent al­most 19 per­cent of all the prop­er­ties in the city.

In a phone in­ter­view earli­er in Oc­to­ber, Hen­on said his 6th Dis­trict has about 1,700 de­lin­quent own­er-oc­cu­pied prop­er­ties, which rep­res­ent $7 mil­lion of the city­wide $150 mil­lion debt such prop­er­ties owe.

Three-quar­ters of the own­ers of those par­cels in his dis­trict are not on any kind of pay­ment plans right now, he said. They can ap­ply for this new pro­gram, which he de­scribed as ac­com­mod­at­ing, but tough.

“This is a game changer,” Quinones Sanc­hez said in a phone in­ter­view. It gives homeown­ers who’ve been af­fected by the bad eco­nomy the op­por­tun­ity to get on some sort of pay­ment plan that is real­ist­ic for them and po­ten­tially save their homes, she said.

O’Neill called the plan a piece of the solu­tion to the city’s de­lin­quent tax woes be­cause not only does it aid homeown­ers who have fin­an­cial prob­lems keep their homes, it “helps us go after the high-end in­vestors” who just aren’t pay­ing their taxes. “I hope it’s a first step in an ag­gress­ive ap­proach to go after tax de­lin­quents that have money … but that game the sys­tem,” he said.    ••

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