Property Tax Delinquencies
As the Philadelphia school district grapples with yet another fiscal crisis, the city’s longstanding problem with property tax delinquencies has taken on a new urgency. In addition, property owners whose taxes increased after AVI are questioning why they should pay more when others pay nothing. GPAR believes that the City has both a fiscal and a moral responsibility to address this issue effectively through a method that achieves tangible results.
According to a 2013 study by the Pew Charitable Trusts, Philadelphia has the fifth highest property tax delinquency rate among 36 of the nation’s most populous cities. City officials recently announced that collection rates have improved significantly over prior years. While this may be the case with newer delinquencies, we believe the City does not have the tools necessary to deal with longer-term, persistently delinquent properties. These parcels represent more than half of the approximately $550 million in delinquent taxes owed to the City.
Currently, the City’s delinquent tax collection rate is 85%. However, cities which utilize third party collections realize a collection rate of 95-95%. This system is used in 28 states, including New Jersey. In October 2013, City Councilman Bill Green introduced legislation which authorized the city to immediately assign or transfer real estate tax delinquencies to third parties. This bill was passed by Council by a vote of 15-2 and signed by the Mayor.
GPAR has met with a myriad of elected officials, administration officials, and legal experts to gain traction on this critical issue. We have also engaged the leading tax lien advisory group, the National Tax Lien Association (NTLA,) to provide guidance and insight on making third party tax delinquency collection a reality which, in turn, will funnel critical monies to our public schools. Implementing new and improved methods of tax collection will help Philadelphia to become a vital, economically thriving, first class city with a fiscally sound school district. Please check for updates on this initiative via the Featured News section on the GPAR website in addition Facebook and Twitter pages.