Why is Philadelphia so bad at collecting taxes?

Discussion in 'Philadelphia Real Estate' started by radiocolin, Mar 12, 2013.

  1. radiocolin

    radiocolin Well-Known Member

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    It's always seemed to me that collecting revenue is something governments excel at. Why is Philadelphia so bad at it?
     
  2. Jayfar

    Jayfar I'm very oldĀ®

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  3. Brian616

    Brian616 Well-Known Member

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    You've gotta think that some otherwise law-abiding people will protest AVI by just not paying their taxes. Seems like you would get away with it for at least a decade, if not more.
     
  4. raider.adam

    raider.adam Well-Known Member

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    For an interesting correlation (I know, does not equal causation) to think about.

    Throughout 2009 Council was working towards a Tax Amnesty (second one since 1986). 2010 they offered one.
     
  5. Hospitalitygirl

    Hospitalitygirl Resident Ornery Bitch

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    I am seriously contemplating doing this. It seems as though those of us that pay all of our taxes, regularly and on time are the ones that are the complete and supreme suckers here.

    I don't know how anyone defends Nutless any longer.

    Cue BRoss in 10...9...8...
     
  6. bootsywannabe

    bootsywannabe Banned

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    Appeal your assessment and kill AVI. Time to send a message to the political class.

    Hey if everbody appeals his/her assessment, AVI is DEAD! We have till March 28th to appeal I gather.
     
  7. raider.adam

    raider.adam Well-Known Member

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    Why would that kill AVI?
     
  8. OffenseTaken

    OffenseTaken Well-Known Member

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    I've always been curious about this myself. The obvious answer is that Philadelphia politicians love collecting revenue, just as long as it comes from Harrisburg or Washington, or from Philadelphians who aren't their friends. The irrigation of funds from other sources makes their job extremely simple, because it hides the negative consequences of their reckless policies (or deflects the blame for those consequences, perversely, toward the very people who are bankrolling their recklessness).

    But this doesn't explain why that revenue model appeals to Philadelphia's politicians so much more than those elsewhere. The problem we're accustomed to (if we don't come from this city) is that elected officials get designs on public money that, if left unchecked, get too big and ambitious. That's why they love getting state and federal help, but they'll collect as many revenues as they can from their own jurisdictions first.
     
  9. Politburo

    Politburo Well-Known Member

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    Is there any significance to the baseline of 1980? Seems like someone is borrowing a trick from sports broadcasts, where you simply draw a line wherever you need to to come up with a 'statistic', and just ignore everything before that because it's inconvenient.

    Not that that makes the situation acceptable, am more just curious if 1980 has significance in the history of property tax.
     
  10. seand

    seand Well-Known Member

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    Some of this is, to be fair, likely the direct result of the economic downturn. I.E. a lot of recently out of work individual homeowners becoming first time small potatoes property tax delinquents.

    Why Nutter didn't respond to the fiscal crisis with a concentrated effort against the speculators and slumlords with a long track record of failing to pay, on the other hand, is a complete and utter political failure.
     
  11. phillycat

    phillycat Well-Known Member

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    I could be wrong, but is part of the reason that the property taxes have been so low in Philly?

    It seems like collecting taxes can be expensive because there is a pretty strict legal process for creating liens and repossessing houses. All of that takes money and time. Sometimes it isn't clear who owns the property, if they are still alive, or if they are some slumlord trying to make it hard to find them. When your property taxes are stupid low, it can take many years before you actually owe enough money for it to be worth the city's time and money to figure out who owns it, then chase you down and try to collect it. And if they go all the way to repossessing the house, then what do they have? A house that no one wants to buy in a rundown area - and it is now their responsibility to keep it up. Yes, they should send it to sheriff sale, but isn't the sheriff's office a retarded patronage dump that the city has little control over?

    In that Inqy article, even the worst offenders barely owed enough money to pay a couple days of lawyer fees. Just paying someone for a few days to chase down the owner could cost more than many of these places owe in taxes. So with lots of these little problems, there generates a very large problem.

    Which is just another argument for having a "floor" for property taxes. If you are paying less than a thousand dollars a year in taxes, and you aren't paying a mortgage, it will be many years before you owe more taxes than it will cost to make you pay them, and there's very little leverage to make you do it.
     
  12. billy ross

    billy ross Well-Known Member

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    Because they haven't put the Parking Authority in charge of it. Yet.
     
  13. seand

    seand Well-Known Member

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    All of this is true but there is no reason why the city can't do very simple things to harass folks who don't pay year after year, like if you are repeatedly delinquent, no permits, rental licences, no business licences, etc. Most cities succeed at doing this, low taxes or high. Its not rocket science.
     
  14. mixiboi

    mixiboi Philly Remixed

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    My god, imagine that if you didn't pay 3 years of Property taxes you get your house booted...lol.
     
  15. eldondre

    eldondre Well-Known Member

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    If they did, collection rates would skyrocket, people would get double billed, and the city wouldn't see much additional revenue
     
  16. BarryG

    BarryG Well-Known Member

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    Yes but there needs to be some kind of deterrent. A single deadbeat may not be worth it but if enforcement scares others into paying, it is.
     
  17. bootsywannabe

    bootsywannabe Banned

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    Detroit's tax collection rate is 47% and dropping very, very fast (if that's even a correct number).

    It's worth taking a look at these articles to see how quickly property values can drop when your city government is run by crooks.

    Would you pay $3000 a year in property taxes when your house is worth only $7600. That's how our tax rate in Philly got so high - because property values dropped through the floor. It's a vicious cycle.

    Half of Detroit property owners don't pay taxes | The Detroit News | detroitnews.com
     
  18. thesomersteam

    thesomersteam Well-Known Member

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  19. sharkey

    sharkey Well-Known Member

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    Why is a dollar collected from an investor worth more than a dollar from a homeowner?
     
  20. sharkey

    sharkey Well-Known Member

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    City already does what you are suggesting. Keep in mind, though, that people may own properties through diffferent entitities. If one entity is delinquent it does not affect the others.
     
  21. Sharkfood

    Sharkfood Well-Known Member

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    I was told flat out by Alan Butkovitz that John Street has a policy that no one in the city will ever lose their home because of delinquent taxes.
    That explains how we got off track (Rendell was collecting in excess of 90% of taxes); what I can't explain why the problem has worsened
    under Mayor Nutter. Even Street's policy doesn't begin to explain the poor collection rate because as the Inquirer pointed out, 57% of the arrearages
    are owed by non-owner occupants.
     
  22. StrangeTanks

    StrangeTanks Well-Known Member

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    Of course Street said that...you guys have a short memory...
    Tax Enforcing Mayor of Philadelphia Owes Back Taxes | Tax Foundation

    And don't think Rendell was any better. Rendell claimed to have collected so much in back tax because he arranged to sell the debt for pennies on the dollar to various banks and legal firms. Poor RE collection has been a plague on this city for decades, not years.
     
  23. seand

    seand Well-Known Member

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    You seemed to have missed the point that I was emphasizing going after people who were delinquent over a long period of time. Also there is a substantive difference between someone falling behind on their own home because they temporarily in a bad financial situation and someone who is making a profit on owning a building while they are simultaneously also stiffing the city on that very same property. Of course they are different.
     
  24. raider.adam

    raider.adam Well-Known Member

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    Except when you have people not paying taxes for multiple years, it is more than a temporary bad financial situation. Even more so when it extends way before the economic downturn.

    Also, as people have pointed out, the ones who are sincere about that situation can get on payment plans. I think you may be a bit too sympathetic to the amount of homeowners not paying taxes.
     
  25. seand

    seand Well-Known Member

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    I'm not saying not to collect from owner-occupants who fail to pay year in, year out. I'm saying that if someone is both profiting from owning a building (rather than living in it themselves) and also not paying taxes on it year in, year out, they obviously should be on the top of the list for collections in terms of priority. If for no other reason than they are the low hanging fruit and are more likely to pay-up or sell in a timely fashion than an owner-occupant.

    57% of tax delinquents are non-owner occupants. They are the majority of people stiffing the city. Clearly the biggest failure is in this area.
     
    #25 seand, Mar 25, 2013
    Last edited: Mar 25, 2013
  26. Jayfar

    Jayfar I'm very oldĀ®

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    City seeks vendors to continue tax lien sales | Philly.com
     

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