Senator unveils legislation to toughen Philadelphia’s tax collection

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

State Sen. Mike Stack (D., Phila.) announced a package of five bills today that would give the city more power to go after tax deadbeats.

The School District is counting on collecting an additional $28 million next fiscal year from delinquent taxes to help balance its budget, which faces a $300 million hole. Mayor Nutter included the figure in his plan to help the District balance its budget.

The legislation, Stack said, would not only help the School District but help stabilize the city’s financial future. Philadelphia’s collection rate, especially of property taxes, lags behind most other big cities.

In making the announcement, Stack said that the city is owed some $249 million in property taxes, $91.5 million in business income and receipt taxes and $47 million in wage taxes.

Thomas Knudsen, the former District chief recovery officer who is now heading up an effort to more aggressively collect taxes for the city, has said that he needs beefed-up enforcement powers from the state in order to do his job.

The array of bills would:

  • Allow municipalities to attach debtors’ bank accounts in order to collect unpaid taxes. Currently, municipalities must go to court to do this.
    Grant the city of Philadelphia power to garnish up to 10 percent of a delinquent taxpayer’s wages, an authority other municipalities have.
    Give municipalities the ability to discover, using the child-support enforcement system, which Pennsylvania banks hold funds belonging to tax delinquents.
    Allow the city to impose liens on properties outside of Philadelphia for an expanded set of claims on unpaid charges and fees, including business taxes.
    Keep Philadelphia’s taxpayer information confidential, as in other Pennsylvania municipalities. At present, that information may, in some circumstances, be obtained through the Right to Know Law.