Tax collections are coming up short in Philadelphia.
Tax collections through the end of March only totaled $492 million compared with $505 million the year before, Philadelphia City Controller Alan Butkovitz said. The problem, he said, may be the high number of people appealing their new property tax assessments, which have been redone across the city.
“Under the city ordinance, people were able to pay their old taxes rather than their newly assessed taxes until their appeal was decided,” Butkovitz said Wednesday. “And there’s a big backlog in tax assessment appeals.”
Even though $13 million doesn’t seem like a lot in a multibillion-dollar city budget, Butkovitz said it could be.
“In terms of the near future, it doesn’t cause an immediate crisis,” he said. “But over the course of the five-year plan, the city gets down to a $20 million fund balance so $13 million of what you are supposed to get is a big deal and the city being in deficit at some point over the five years.”
Mayor Michael Nutter’s spokesman said the administration’s budget assumed a drop in tax collections due to the appeals. Philadelphia is doing a better job of collecting back taxes, he said, so that will help with the bottom line.