About Nutter’s Promise To Go After Those ‘Raggedy People’…

Michael Nutter (cred: CityPaper)

A nice little soundbite for sure from our mayor:

Now there are some other trifling, raggedy people around here who can actually pay, who don’t pay…

And from the Jan Ransom & Sean Collins Walsh article in this morning’s Inky, the mayor sounds serious, right?   This is the time we’re going to go after the deadbeats, right?  Right???

Of course you know me–this quip from Michael Nutter is utter bullshit.  There’s some establishment pieces in the way of property tax collection reform.  The biggest one:

The Sheriff’s Department is a universe of of laziness.

The only real way that works that convinces tax deadbeats to pay up is when you make a real threat to take the deed away from a property owner.   When you do that, the opportunity to sell the property in the future is lost forever.   Property is the same thing as cash when it comes to most of the investors who hold over 70% of the delinquent tax balances in Philadelphia.

But tax sales only happen in Philadelphia a couple times a month at the most, and never more than 150 to 200 properties in one sitting ever actually make it to a Sheriff’s Sale.   The phone calls and letters are ignored by most investors because they have known longer than anyone that the City of Philadelphia is never really serious about property tax collection.

City Council also has one hand tied behind its back.   When it comes to the Sheriff’s budget, City Council gets the authority to set how much money goes to fund that row office, but it doesn’t have the authority to tell the Sheriff how to spend most of its money.

And Michael Nutter?   He has even less power to tell the Sheriff what to do.   He could launch a public campaign to trash the current Sheriff, Jewel Williams, for not revamping the Real Estate Unit and holding more auctions every month.  No one on City Council has mentioned sitting down closely with the Sheriff’s Office staff to come up with a plan for making the Sheriff’s pipeline bigger to handle more cases, identifying property investors’ property in the Sheriff’s sale pipeline first, or coming up with a delinquent landlord strategy that gets rental properties into Sheriff’s sale and in the hands of a new investor willing to keep the taxes current while protecting tenants’ rights.

None of that.   The $40 million that Nutter announced he will be spending?   A call center and more collections agency activity.  Maybe if GRB Law and Linebarger, the two collections law firms the City uses for property taxes, can use the money to load the courts with more foreclosure actions, perhaps this will be effective.  Perhaps.

So, I hold a very jaded view about Nutter’s announcement.   A workaround to get past the Sheriff’s office exists in the form of the Land Bank, which allows the City to take tax delinquent property and strip the deed without the need for an auction so City Council, sitting over the Land Bank board, gets to decide what happens with delinquent property.   But the Land Bank is only intended to consolidate property the City already owns and only acquire premium properties where it’s clear there’s interested parties that want the property.

That leaves the Sheriff’s Office stuck with tax sales on property that’s not necessarily premium, and of course the bank foreclosures that it’s required by Pennsylvania law to carry out.

So, this is a much more complicated topic than just some “raggedy people”, and it’s why Nutter’s announcement is not going to amount to much unless there’s some concrete proof, in numbers and dollars collected, to show for it.