City council is turning up the heat on delinquent taxpayers - agreeing this week to hold a series of hearings on delinquent taxes in an effort to find ways to improve collections.
The city is owed roughly $515 million in back taxes.
“Going into this budget cycle we will be asked to come up with more money for our schools and public services. It is not fair that not everyone is paying his taxes,” said Councilman David Oh, who announced hearings were part of an initiative from council’s six newest members – dubbed the Serious Six. It will also include a number of public policy briefings.
Council agreed to hold a series of hearings all related to collecting unpaid property taxes. Hearings will focus on a number of separate topics ranging from best collection practices to how to collect on vacant, commercial, residential and industrial properties.
“The fact is it is simply unfair that while most people pay their property taxes there are still some who do not,” said Councilwoman Cindy Bass. “We intend to investigate this problem.”
Councilwoman Marian Tasco suggested council ask several former mayors, including W. Wilson Goode Sr., John Street and Ed Rendell to testify.
More aggressive tax collection is one area where council and the administration are in perfect accord.
Earlier this week, Mayor Michael Nutter announced that the city will begin beefing up its collection efforts.
“We’re putting folks on notice - we’re going to be much more aggressive in coming after you,” he told reporters on Monday.
Revenue Commissioner Keith Richardson said the administration hoped to add $260 million to the city’s bottom line through better collections over the next five years.
The focus on collecting more revenue comes as the city and administration begin to mull over a new tax rate as the city moves toward a property tax system based on the full value of a property.
Called AVI, the shift has caused council members some anxiety, worried that it could cause many taxpayers to see an enormous increase in their property tax bills.
New assessments will be mailed Feb. 15.
This week, according to published reports, council members met in small groups with administration officials to review preliminary data. Those numbers showed that 281,163 property-owners will see their taxes go up.
According to information leaked to The Philadelphia Daily News, property taxes for about 36,000 property owners will jump about $1,000. Roughly 600 of those taxpayers will see their taxes go up more than $5,000 a year. The largest increases are expected in gentrifying neighborhoods.
A much larger portion of taxpayers, about 180,000 property owners, will see their taxes fall. The biggest percentage of taxpayers, about 330,000, will see a change of less than $400 in either direction.
Council is gearing up for budget talks in which it will set the new tax rates under AVI. Members are discussing several proposals intended to provide relief for property owners. It has already approved a $30,000 homestead exemption, which would allow homeowners to subtract that amount from the value of their homes for tax purposes.
Doubts about whether that exemption will remain in place were raised this week when Councilman Bill Green introduced a bill to repeal it. He argued that keeping the exemption would force taxes higher on all city properties.
“When this was enacted, council was facing a potential tax rate around 1.8 percent because we didn’t have all the information we have today,” Green said. “Now that we’re half a point below that, we need to re-think the exemption measures we applied too broadly across the city.”
Bass also announced that the city has launched a website www.taxfairness.com to help taxpayers understand the move to AVI and how property taxes work.
In unrelated news, the administration’s battles with the city’s unions continued Thursday with union officials showing their solidarity with the city’s firefighters, who are in the midst of a court battle over their contract and urging the city to drop its appeal.
“[The mayor] ought to be ashamed of himself,” said Pat Eiding, head of the Philadelphia AFL-CIO, who joined Bill Gault, head of the firefighters’ union, at a press briefing Thursday morning outside of council chambers.
Nutter has twice appealed a contract award for members of International Association of Fire Fighters, Local 22.
“He’s breaking the law,” Gault said. “Binding is binding. We have to live with the results. He has to live with the results.”
The mayor and firefighters have been bickering since Nutter took office in 2008.