Philadelphia Targets Tax Delinquent Workers Yet Ignores All Others

An article in the Philadelphia Inquirer today notes how the city is preparing to go after municipal workers for being delinquent in their property taxes. However, the amount of back taxes from real estate owed by city staff--$5 million--is only a small fraction of the total, which is estimated by the newspaper to be about $425 million. This amounts to about 1% of the money owed to the city, a drop in the bucket compared to the bills due from decades-old tax deadbeats that have been warehousing valuable real estate across the city. To deal with this issue effectively, Philadelphia must do two things.

First, instead of simply picking on city workers, the city needs to finally develop an aggressive policy on real estate tax collection. Properties that remain in default for 2 years should be either fast tracked for tax sale or have a lien applied if the owner occupies the property and can show hardship qualifications. This will provide rapid turnover of property to get it back into productive hands and add essential revenue into the the city's coffers.

Second, a look at the delinquency database will show that a large majority of properties with back taxes are residential. Because of this, the city should look to provide substantial tax relief to its residents, which can most effectively be done through the land value tax. This would provide savings to almost 80% of the city's residential properties and shift the burden to more high-valued commercial, industrial, and vacant properties.

Philadelphia should be lauded for its effort to enforce tax accountability, but it should direct its efforts in making everyone--not just people on its payroll--pay their fair share. Taking these two steps will reduce existing delinquencies and shift the tax burden accordingly so that future delinquencies will be prevented.