A Good Idea, Good Partners, and Small Seed Funding Goes a Long Way to Save Syracuse taxpayers $1.47M
In recent months, a few tax delinquent Syracusans got a handwritten letter from Mayor Ben Walsh. The message was polite and simple: Please pay your taxes.
Walsh and other city staffers sent hundreds of handwritten notes to people with tax liens on their homes. They urged owners to pay up and explained what immediate action was needed to keep their home and avoid more fees. It was part of an experimental program thought up by two academics at Syracuse University. And it worked.
Over four months, the city collected $1.47 million in overdue property taxes from owners who got those courtesy notes. Hundreds of people got current on their tax bills, saving them from tax liens, interest costs and foreclosure.
Those letters were the brainchild of Leonard Lopoo and Joseph Boskovski, who run a think tank at SU's Maxwell School called the X Lab. They use data, behavioral science and real-life testing to find better ways for governments and non-profits to operate.
Earlier this year, they partnered with the city to figure out how to lessen foreclosures and step up tax collection. They studied decades of research that shows how people categorize and process communications. Generally, they found, people have automatic, programmed responses that help them quickly navigate daily tasks like sorting mail. People rely on signals and generalizations to decide what's important and what's junk.
A form letter in a printed envelope from the government can be an indicator that something isn't worth reading. A handwritten letter or a note scribbled on the envelope, however, sends a signal: This is personal.
"Handwriting shows the letter deserves more attention," said Boskovski, managing director of the X Lab.
To test the results, the X Lab and city officials split tax delinquent property owners into three groups. A control group of 1,922 tax-delinquent property owners got the standard form letter in a regular envelope. Boskovski called that the "business-as-usual" group.
Another 3,844 owners, all who were late on their current bill or delinquent on past bills, received handwritten courtesy letters. A portion of those had a handwritten note on the outside of the envelope. The handwritten letters said very clearly that if the taxes weren't paid, the owner would lose his or her home. They explained that the city wanted to help them avoid that. The letters also mentioned some of the services tax dollars support: snow plowing, trash collection, leaf pickup, etc. The city collected 88 percent more tax revenue from people who received a note on the envelope than from the control group. That's an average of $684 more per property owner. The group that got the handwritten letter with no note on the envelope paid 50 percent more than the control group -- $82 more per property owner.
Walsh said the money is important, but he's more pleased to be able to help homeowners. "It's the job of the city to collect taxes...but the primary focus here is keeping people in their homes," Walsh said. "This is really just another way to make sure we're keeping people stable in their households." A property becomes seizable once it is more than two years behind on taxes. When the project began there were 2,722 properties with seizable liens. Those properties together owed about $30 million. The money recouped from seizable properties represents about 4 percent of that outstanding debt. There's another $9.6 million owed by people behind on this year's city and school taxes.
Walsh said he hopes to find more ways to utilize the expertise available at the Maxwell School (his alma mater).
The X Lab is just two years old and is designed to connect governments to the scholars at SU. Already, it has partnered with several local organizations, including Onondaga County's Family Planning Services and the Onondaga County Cash Coalition. Those partnerships, and the one with the city, have been funded with grants from the Allyn Family Foundation. The foundation gave $10,000 for the X Lab's tax revenue program with the city. Executive Director Meg O'Connell said the program empowers property owners to better protect their homes and their investments.
Maarten Jacobs, director of community prosperity for the Allyn Family Foundation, said it's part of the non-for-profit's ongoing efforts to fight poverty in Syracuse. The program, he said, will help keep people from losing their homes or facing mounting late fees and fines that come with delinquent taxes.
"This helps address it before it becomes a catastrophe," he said.