“About 100 city employees were a decade or more behind on their property-tax payments.”
An Inquirer analysis finds about 2,000 city workers are behind on their taxes at a time when every penny counts.
For 13 years, Democratic ward leader George Brooks’ wages have been paid by Philadelphia taxpayers. He’s now making $64,539 a year in a senior patronage position at the Register of Wills Office.
And yet, according to city records, Brooks has failed to pay his property taxes for more than two decades, racking up a $15,000 debt to the city.
“I’m working on that. I’m making arrangements,” Brooks said in a 20-second phone call that he quickly cut short.
An Inquirer analysis of Philadelphia tax and personnel records found about 2,000 city workers and employee spouses who were past due on their real estate bills, including about 1,000 who are more than two years behind.
Together, city employees and their spouses owed about $5 million in unpaid property taxes.
That is a tiny fraction of the total debt Philadelphia home and business owners owe the city in property taxes. More than 100,000 properties – ranging from commercial towers to tiny trinities – are considered technically delinquent. The collective debt stands at $425 million, which does not include as-yet-unpaid 2009 bills.
Critics such as City Controller Alan Butkovitz blame the unpaid bills on “a culture of unaggressive collection” that he says is epitomized by the city’s failure to reliably collect what it is owed even from its own employees.
“The city has a big heart in dealing with its debtors, but the problem with being generous to a few is that you’re being unfair to the many who do pay their bills, and who depend on city services being fully funded,” Butkovitz said.
Nutter administration spokesman Doug Oliver said the city was trying to change that culture, largely by increasing the number of tax-delinquent houses offered at sheriff’s auctions from a historic norm of about 25 a month to 125, with the goal of reaching 200 a month.
Even at that increased rate, though, it would take 41 years for the city to sell all the houses and businesses on its delinquency rolls, and that assumes all other property owners in the city stay current on their taxes.
“This is about striking the right balance between aggressively pursuing the revenue the city needs and also not wanting to eviscerate large swaths of communities through mass foreclosures,” Oliver said. “But we concede that the right balance has not been met, and we want the message to be clear that all property owners have an obligation to pay your property taxes.”
Philadelphia’s need to collect on its debts has rarely been greater.
On Friday, the city announced it was so short on cash that it would temporarily stop paying vendors. And this year’s grim budget features a sales-tax hike and actuarial acrobatics designed to kick pension payments down the road. Even that plan is at risk, however, as it still needs the approval of skeptical state legislators.
“It is not lost on us that, at a time when we have very important proposals in front of legislators in Harrisburg that we desperately need approval on, we must do everything we can to collect these outstanding debts,” Oliver said.
And yet, as of June 1:
About 100 city employees were a decade or more behind on their property-tax payments.
Seventeen city workers, including Brooks, had debts dating back more than 20 years. Two owed delinquent taxes that topped or rivaled their salaries, and about 50 more had past-due bills that amounted to 25 percent or more of their yearly pay.
Several dozen delinquent employees were working in the very city agencies – the Law and Revenue Departments and the Board of Revision of Taxes – that are responsible for setting property values and collecting property taxes.
At least 160 active employees were already behind on their property taxes when the city hired them.
One police recruit hired Nov. 17, 2008, had property-tax debt that totaled nearly $28,000. She was one of five officers hired that day with delinquent tax bills.
About 20 of the past-due and delinquent employees are City Council aides, including one who owes $96,868.58, more by far than any other city employee.
The city says it has begun a crackdown on workers who owe back taxes, a step it took only after The Inquirer and Butkovitz independently requested data on tax-delinquent employees.
In a letter dated May 29, Revenue Commissioner Keith Richardson and City Solicitor Shelley Smith warned tax-delinquent city workers that they had to settle their debts or reach payment agreements by June 30. Those who did not, the letter warned, could have their paychecks garnisheed by the city.
Since then, Oliver said, 108 formerly delinquent city employees have paid their bills in full, and 425 have entered long-term payment plans.
If the city tries to garnishee wages, it would likely be opposed by municipal unions that question the city’s legal authority to deduct property-tax payments directly from employee paychecks.
“We believe everybody should pay their taxes. But I do not think the city should be applying special rules or regulations to its workforce beyond what it would do to the average taxpayer,” said Cathy Scott, president of District Council 47 of the American Federation of State, County, and Municipal Employees, which represents the city’s white-collar workers.
Scott noted that the vast majority of the city’s 28,000 employees pay their taxes in full and on time. But she noted that city workers were not invulnerable to the sort of familial, health, and financial stresses that can afflict any taxpayer.
Some elected officials, most prominently City Councilwoman Jannie L. Blackwell, maintain that the city should take into account the personal situations of delinquent taxpayers.
“We know who can pay and who can’t. You have to get it where you can and just accept there are some who can’t pay,” Blackwell said.
Among those who apparently cannot pay is Martin Cabry, one of Blackwell’s senior aides. Cabry, who handles zoning and community relations for Blackwell, will make $55,615 this year. His former wife, Rita Cabry, whom he divorced in 2006, is a patronage worker at the Board of Revision of Taxes, where she is paid $36,334.
Despite those salaries, the Cabrys failed to pay taxes on their University City rowhouse for 25 of the last 26 years, racking up a debt of $96,868.58, including penalties and interest.
Even allowing for Philadelphia’s traditionally lax enforcement of local tax law, the Cabrys’ house would have been seized and sold at a sheriff’s auction long ago under normal circumstances, given the size of the debt.
But as Blackwell’s employee, Martin Cabry has not been treated as a typical taxpayer.
In a phone interview, Blackwell said that she occasionally asks the city not to foreclose on delinquent properties in her district. Asked whether she intervened in Cabry’s case, she said she was “dealing with it.”
Oliver acknowledged that Blackwell had repeatedly asked the city not to foreclose on Cabry’s home.
“It’s no secret that Councilwoman Blackwell fights relentlessly for her constituents and for people that she believes needs her help. While we don’t always do what a Council person asks us to, we’re always willing to listen, and we do afford them that courtesy.”
Reached by phone, Cabry said he had accumulated the debt in part because of his divorce, his health problems (including a lung transplant), and the expensive medical treatments needed for his adult daughter, who has spina bifida.
“I’m a good worker. I believe I do a good job. There’s no good answer for being this far behind, but sometimes you get in deep and there’s not a whole lot you can do to get out,” he said.
In the hope of settling his debt, Cabry has put his house on the market. If it sells, the city will get what it is owed before Cabry receives any proceeds.
If it does not sell, the city appears ready to auction it off.
“I can say the administration will get its money through sheriff’s sale or the private sale of this property in a very short period of time,” Oliver said. “The city is no longer in the position for personal hardships to prevent us from collecting what is owed.”
Falling behind on property taxes appears to be something of an occupational hazard for Council aides.
Derek Green is one of the roughly 20 aides out of 195 full-time Council employees who owe back property taxes.
A former Council candidate, Green serves as legal adviser to Councilwoman Marian B. Tasco, the majority leader. He will be paid $112,625 this year, making him the highest-paid city worker with a significant past-due property-tax bill.
Green said he ran into tax trouble because of the financial pressures of running for Council (which required him to temporarily quit his city job) and opening his wife’s shoe store on Germantown Avenue, which was forced to close late last year.
He entered into a payment agreement with the city and is caught up on his 2006 and 2007 taxes but has yet to pay his bills for 2008 and 2009. City records show he owes $6,215, but Green’s accounting pegs it at $5,715.
“Just like any other party, city employees like myself have an obligation to make good on debts, and I will and am,” Green said.
Attempts to get further comment from George Brooks, the Register of Wills Office worker whose North Philadelphia apartment building is 22 years past due, were largely unsuccessful. After repeated phone and written messages were left at his home and office, Brooks wrote a brief e-mail saying that he had been occupied with personal business.
“However, to respond to your inquiry regarding my delinquent account, I would like for you to know that this problem will be resolved in a few weeks,” the e-mail said.
The message made no further mention of his debt, and he did not respond to an e-mailed request for more information.
Paying the Property-Tax Piper
Philadelphia property taxes are due on March 31 each year. A 1 percent discount applies to bills paid by Feb. 28.
Many homeowners with mortgages have their taxes paid directly by the bank from an escrow fund.
Delinquent homes can be sold at a sheriff’s sale, with the proceeds used to cover the debt to the city.
Penalties and interest
Unpaid taxes are past due as of April 1, but are not considered delinquent until the following January.
Penalties, interest, and other expenses can accrue quickly, outgrowing the principal debt over time.
Property owners unable to pay their debts all at once may be eligible for an installment plan. Call 215-686-6442 for more information.
The tax balance on all city properties may be looked up at http://ework.phila.gov/revapp/delinqtax/
To find city employees with past-due and delinquent tax accounts, The Inquirer obtained copies of city payroll and personnel records and used addresses and names to match employees to the taxpayers cited in a public database of all 100,000 property-tax delinquents.
Posted on Sun, Jul. 19, 2009
By Patrick Kerkstra and Dylan Purcell Inquirer Staff Writers
Source: The Philadelphia Inquirer