Realtor proposes 1 percent solution for Philly tax woes

Philadelphia Mayor Michael Nutter and City Council are debating how high or low the real estate tax rate can be set to fund city services without slamming property owners. 

The lowest number being debated is 1 percent, but many are skeptical it would produce enough money to run the city.

The head of a realtors’ group says he can make that number work.

Allan Domb, president of the Greater Philadelphia Association of Realtors, says the city needs to stop collecting delinquent taxes itself, and farm out the work to a third party.

“In other cities across the country that have privatized it’s 95 percent collection rate,” said Domb.  “The Center City District, which I realize is a different level of collection, collects 99.2 percent. So we suggest privatizing collection of taxes to get it to 95 percent and the last five percent is sold like a tax lien sale certificate like the state of New Jersey.” 

The city is only successful about 85 percent of the time.  Domb says turning collections over to a third party is usually more efficient, because the company is working on commission and is motivated to bring in as much money as possible.  And since fees to collection agents get paid by those who owe the back taxes, he says this method does not reduce how much flows to city coffers.

City Council is working with the Nutter administration to find new ways to improve tax collections.