CITY HALL. An amnesty proposal by City Council that would cut tax delinquents a break on penalties and interest received initial approval Thursday, clearing the way for a program that officials believe could bring in $30 million to $40 million.
Tax amnesty programs have sprouted up in cities throughout the country during the recession as a way for quick influxes of cash, but some economists aren’t so sure if the short-term gains outweigh side effects.
One such effect is that taxpayers who owe thousands to the city have decided to wait until the program begins early next year, city Revenue Commissioner Keith Richardson said last week, which has slowed tax revenue in recent months.
But supporters like Controller Alan Butkovitz have said the program would prevent further cuts to city services. The city is owed more than $1 billion in back taxes, including millions in real estate and business privilege taxes.
“I’ve been pursuing this initiative based on the highly successful results of the amnesty program recently undertaken by ... New Jersey, which generated $700 million paid in back taxes over a relatively short period of time,” Butkovitz said when debate began in September.