Philadelphia is losing millions over its backlog of property tax sales

Philadelphia has not held a property tax sale since April 2021, and city officials are blaming each other for the growing backlog and the loss of potential tax revenue.

Sheriff Rochelle Bilal, whose office is responsible for auctioning tax-delinquent properties, blames the Philadelphia Law Department — overseen by the mayor — for the failure, the Philadelphia Inquirer reported.  A spokesperson for new Mayor Cherelle Parker said the issue is “wholly a matter for the Sheriff’s Office.”

The sheriff said city lawyers stopped sending copies of court decrees to her office, which are required for auction authorizations. She said the office hasn’t received any decrees since the start of the pandemic, though online auctions briefly resumed in April 2021 after they were suspended in-person in March 2020.

The mayor’s office pushed back on Bilal’s assessment of the issue.

It’s not entirely clear how the backlog started. One possibility is a six-year no-bid contract awarded by the sheriff’s office to Bid4Assets, which was announced in March 2021 and which allowed the company to run the online auction process. Other companies claimed Bid4Assets received unusually favorable terms and City Hall — including then-Councilmember Parker — responded with outrage.

In the last two years, the city has gone to court to authorize the sale of over 1,300 tax-delinquent properties. But since they haven’t been auctioned off, the land is getting worse and property owners have left tax bills unpaid.

Regardless of who is to blame, the three-year pause in tax sales is having a material effect on the city’s coffers. In 2017, for instance, the sheriff’s office made $64 million in delinquent taxes and fees from the sale of more than 7,000 properties.

Property tax delinquency has surged in recent years, increasing between 2 and 8 percent every year since 2019. The city is owed about $170 million in back taxes today, a jump of nearly $40 million from 2019.

— Holden Walter-Warner

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