ThinkFest Recap: Allan Domb’s Three Steps to Righting the City’s Finances
On Tuesday afternoon, City Councilman and real estate man Allan Domb took to the stage at Philly Mag’s ThinkFest to do what he does best: talk about municipal finance.
Anyone who knows Domb knows that he’s laser-focused on a few key things that he believes will help fix the city’s budget and lift Philadelphians out of poverty. A veteran of the real estate industry, Domb often compares the City of Philadelphia to a $4 billion business. On Tuesday, he played his greatest hits.
Collect delinquent property taxes.
“This is one of my favorite topics,” Domb said. He told the audience that outstanding property-tax accounts in Philadelphia amount to about $492 million and our tax-collection rate is around 92 percent, while the national average is above 96 percent. Forty percent of tax delinquents live outside the city. To address the problem, Domb has partnered with the National Tax Lien Association to push the city to adopt some new approaches.
Correct commercial property assessments.
Under-assessment of commercial properties is sort of like a sister problem to tax delinquency: It lets property owners off the hook while screwing the city out of revenue. If a skyscraper or condo tower was valued at $5 million by the Office of Property Assessments a few years ago and hasn’t gone up while the market has gotten stronger, that’s so much tax money not going to the city and schools.
“Real estate values across Philadelphia have gone up, but our base has not changed,” Domb said. “This means our assessments, most notably the commercial assessments, have not kept pace with today’s market.”
Improve the city’s fund balance.
This is an issue that came to a head near the end of the debate over whether to enact a soda tax. The fund balance is basically the amount of unbudgeted money the city has in the bank. Even though it’s not earmarked, it’s important: the higher it is, the better the city’s credit rating is likely to be. The lower it is, the more expensive it is to borrow.
Domb’s also has ideas for addressing the city’s pension fund and improving adoption of the federal Earned Income Tax Credit. Watch his whole talk below.
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