Department of Revenue Marks Continued Progress on Boosting Collections and Curbing Tax Delinquency
(Philadelphia) – The Department of Revenue today announced several milestones in its effort to boost collections and curb tax delinquency in Philadelphia.
Among the key signs of progress are that collections for the General Fund exceeded estimates for FY17 by over $10 million, and that strong Wage, Earnings, Net Profits, and Liquor Tax collections drove a 3.3% gain in tax revenue collected over FY16.
Meanwhile, the City is improving customer service and assistance programs to prevent tax delinquency before it happens, and is strategically increasing enforcement to reduce the amount owed. Nearly 9,000 properties were removed from the delinquency rolls in the past year. In terms of principal owed, Real Estate Tax Delinquency has fallen 31% from 2013 – 2017. The Department of Revenue in Fiscal Year 2018 has been particularly focused on data analysis, which will continue these trends without requiring new funding.
“We know that 95% of property owners pay on-time,” said Mayor Kenney. “But it is important that we have stepped up our efforts to bring the remaining 5% into compliance, and we’ve been aided by ideas put forth by Council members Allan Domb and Mark Squilla. We will continue to work with them on these essential efforts.”
Across all tax types, the number of delinquent tax accounts reduced by almost 50% and principal dropped by 43% from FY08 to FY17, reaching record lows. Business Income and Receipts Tax delinquency has declined by 40% in the last 5 years, attributed to increased billing frequency and targeted used of collection tools, like the Commercial Activity License (CAL) Revocation program.
“Challenges remain, but delinquency – particularly for the Real Estate Tax — continues to decline,” said Revenue Commissioner Frank Breslin. “We will continue to be both aggressive and compassionate as we ensure work with taxpayers who may face challenges. These efforts bring vital resources to the City and School District of Philadelphia.”
Better data sharing at the federal and state levels resulted in Revenue assessments of over $21 million of delinquent accounts in FY17 by detecting income reported to other governments but not Philadelphia. Moving forward, the City will continue to use data analytics to score accounts and predict the most effective enforcement tool.
Additionally, Revenue has expanded its efforts to enroll homeowners into payment plans, attending 135 public events last year, and adding key staff to improve processes and assist taxpayers who are struggling. In 2017, the department revised terms for payment agreements on business and income taxes, allowing for more flexible plans that businesses and individuals can stick to. Furthermore, to reduce Real Estate Tax foreclosures and to protect homeowners, Revenue collaborated with City Council and community stakeholders on improvements to the Owner-Occupied Payment Agreement (OOPA) procedures and policies. These new OOPA policies will launch this year.
The City has been making it easier for taxpayers to pay on time, and about 9 out of 10 do. For customers that are behind, Revenue is getting smarter and faster with enforcement – collecting nearly $200 million in delinquent taxes and more than $40 million in delinquent water bills in FY17.