Suing The City To Fix Real Estate Taxation

(February 2011)  

I love this city far too much to take pleasure in seeing my name squared off in its opposition -- Brett Mandel v. The City of Philadelphia. But, real estate taxation in Philadelphia is a crime that has victimized too many for too long. In Philadelphia, property values for tax purposes have no connection to what properties are actually worth and inequities exist from house to house, block to block, and neighborhood to neighborhood. For years and years, some neighbors have been forced to pay higher tax bills than they should. Owners of modest row homes often pay more than owners of expensive townhouses and there is no rhyme or reason to who pays what. It is past time for change, and if our elected leaders do not have the courage to take on this challenge, then I am proud to join with other citizens to ask the courts to right this wrong.

(Why sue? Because real estate assessments are so out of whack, it's as if they are set on a zany game show. Click here to view the video.)

I do not take this step recklessly or impulsively and I certainly do not make this move as a first step.

More than a decade ago, as the Director of Financial and Policy Analysis for the City Controller, I authored proposals to address these nagging problems. In researching a consideration of Philadelphia's tax structure, I quickly encountered the evidence that the valuation of property for tax purposes had been characterized by unsound administration and violation of state law for decades.

As a government official, I crafted a plan to fix what is wrong with real estate taxation. In 2003, when voters established the Philadelphia Tax Reform Commission, I was honored to be appointed to the body and served as the chair of the Real Estate Tax working group. I led our efforts to craft a plan to make Philadelphia real estate taxation fair and understandable, to achieve the administrative competence to oversee property valuation, and to protect vulnerable homeowners from unreasonable tax increases in the transition to a fair system of real estate taxation.

As an activist, I crisscrossed the city to explain why we must act to address these problems. After serving on the Tax Reform Commission, it was clear to me that tax reform would only become a priority for Philadelphia's leaders, if Philadelphians demanded action. I left my position in city government to create a citizens' organization to promote civic engagement and the policies to move Philadelphia forward. I informed about these problems, hosted a citywide conference to educate about these issues, and used gimmicks and stunts to call attention to real estate tax unfairness.

I thought we were actually going to see change in 2008 when the media lavished attention on real estate taxation, the property-assessment bureaucracy made strides toward reform, and my organization's threat of a lawsuit brought these matters to a decision point. I had raised enough funding to pay one of the city's best real estate tax lawyers to draft a lawsuit to ask the courts to declare the system illegal and compel the city to make change. However, going into negotiations with the city to head off the lawsuit, I knew I did not have the funding to actually file the lawsuit pay the cost of litigating and I feared that without a court's intervention, nothing would change.

Thanks, in part to the threat of the lawsuit, the city adopted official policies to fix what is wrong with real estate taxation. With the city "agreeing" to make change and without the funds to go to court, I had to accept that step as progress. I declared a muted victory, knowing that there was no guarantee that the city would actually make the changes that were promised. Nearly three years later, it is clear that promises are not enough.

Despite governance changes that have brought the real estate assessment system under direct mayoral control and despite many positive pronouncements from our elected officials, real estate taxation in Philadelphia is as unfair as ever.

In fact, we have taken a step backward. Last year, the Mayor and City Council adopted Philadelphia's first Real Estate Tax increase in two decades. Knowing that Philadelphia's real estate tax system is unfair and almost certainly illegal, our elected leaders' decision to increase the tax rate by 10 percent is appalling.

Our neighbors continue to be victimized by this unfairness, paying too much year after year while our leaders allow the system to remain broken.

I am proud to join with citizens from all corners of the city to stand up and demand action. We are asking the courts to declare our current assessment system illegal, to prevent the city from collecting revenues from the 10-percent tax increase, and to stop the city from taking properties through Sheriff's sale until the system is fixed once and for all. I encourage you to visit to learn more about this effort, to read the actual lawsuit, and to get involved with this important fight. Fairness, justice -- and now a collection of citizens -- demand change.