This article was originally published by NEXTpittsburgh news partner PublicSource. PublicSource is an independent, nonprofit newsroom serving the Pittsburgh region. You can sign up for our free newsletter at publicsource.org/newsletters.
Allegheny County Executive Sarah Innamorato proposed a $2.2 million increase in the county’s property tax rate in 2025 during her budget presentation to the County Council Tuesday evening. If approved by the Legislature, it would be the first time the county has increased its miscellaneous fee rate aside from a recent reassessment.
One mill equals $1 of tax for every $1,000 of assessed value. If the property is assessed at $100,000, the tax on $2.2 million would be $220 per year.
Since 2011, the county’s millage rate is 4.73.
“We cannot pave the way to a balanced budget,” Inamorato said Tuesday. “We have no intention of making significant cuts to the critical services that the people of this county rely on,” Allegheny County Executive Sara Inamorato said Oct. 8 as she presented her 2025 budget proposal at the downtown Allegheny County Courthouse. . (Photo by Anastasia Buzbee/Public Source)
The change does not affect tax rates set by local governments and school districts, which account for a large portion of property owners’ taxes.
Innamorato said the increase will generate about $160 million in new revenue for the county in 2025. This could be a needed boost as federal pandemic relief funds expire this year and disruptions to property tax revenue sources are reportedly threatening local government budgets and causing large budget deficits. There is. This year it’s for the prefecture.
The proposed operating budget includes $1.2 billion in spending, a 3% increase over the 2024 budget.
County Budget and Finance Director Tim Cox said Tuesday that the 2.2 million increase was calculated to eliminate next year’s projected deficit and replace the millions of dollars the county will take out of its reserves this year.
Innamorato also proposes increasing the county’s homeowner tax exemption from $18,000 to $21,000 to protect owner-occupiers from some, but not all, tax increases. County budget officials estimated Tuesday that owners would end up paying about $15 more per month than the county’s median assessed value of $110,000.
The homestead deduction reduces the taxable value of owner-occupied property.
John Petrak, executive vice president of the Pittsburgh Metropolitan Area Association of Realtors, said he believes the 2.2 million increase is too steep.
“It’s hard for me to justify an increase of almost 50%,” Petrak said. “Are there any cost savings we can consider?”
Before Tuesday’s presentation to Congress, Inamorato said the administration chose to propose an increase in livestock fees rather than cutting costs.
“So many people in this county want county government to do more,” Inamorato said. “Municipal leaders are asking us to do more” to support police, fire and social services.
Petrak said he is concerned that the change could affect not only homeowners but also renters.
“The costs that businesses have to absorb are ultimately passed on to consumers,” he said. “Landlords will end up passing those costs on. …As a result, we will probably see a slight increase in rents countywide as well.”
The tax increase requires approval from 10 of the 15 city council members. Most lawmakers remained silent during a question-and-answer session with Inamorato in Congress on Tuesday, but Republican Rep. Sam DeMarco questioned whether the budget bill included too much spending.
“I would ask you to seriously consider the difficult areas of savings and austerity measures that could be made,” DeMarco said. “So if we recognize that a tax increase is necessary, the tax increase doesn’t have to be 46 percent,” Allegheny County Executive Sara Inamorato said Oct. 8 in downtown Allegheny County. The 2025 budget proposal was submitted to the court. This is the first budget proposal her administration will submit to the County Council. Councilman Sam DeMarco sits second from the right. (Photo by Anastasia Buzbee/Public Source)
City Council President Pat Catena promised to discuss it in upcoming budget hearings, saying the Legislature will ask “tough questions” of the administration and urging the public to participate in the budget process.
“Tonight’s proposal was a $2.2 million increase,” Catena said. “We look forward to hearing your opinions.”
The end of an era of stability
Property owners in the county haven’t seen a change in millage since 2013, when rates were reset after a countywide reassessment. (Fees will be reset to comply with legislation requiring reassessments to be revenue neutral to the county.)
Former County Executive Rich Fitzgerald, who led the county from 2012 to 2023, left the tax rate unchanged but opposed a countywide reassessment, instead requiring most properties to be taxed based on 2012 market value. A base year plan was adopted.
“The previous administration could have chosen to increase taxes even more gradually after 2012, and without the (federal relief) money…they would have needed to do so years in advance,” Inamorato said. Ta.
Mr. Fitzgerald declined to comment on the matter, but some of his past public statements suggest he believed tax increases were inevitable toward the end of his term as president.
“At some point, some council or county executive is going to have to adjust millage for inflation,” Fitzgerald said during the annual budget submission to the Legislature in November 2022.
The base year system still applies, as Mr Inamorato considers whether to carry out a revaluation. She vowed to pursue this during last year’s campaign, but Pittsburgh Public Schools is trying to force her to do so in court. But since taking office in January, she has yet to make any plans to do so. A member of the audience records Allegheny County Executive Sara Inamorato presenting her 2025 budget proposal at the Allegheny County Courthouse downtown on Oct. 8. (Photo by Anastasia Buzbee/Public Source)
Although property tax rates have remained stable since 2013, this number represents only a small portion of the three-part property tax that property owners face. School and city taxes generally make up a large portion of an owner’s property tax bill, and these rates can vary depending on the local school board or city council.
For example, a $100,000 property owner in Pittsburgh will pay $473 to the county, $881 to the city, and $1,025 to the school district, for a total of $2,379 in 2024. If the county’s proposed $2.2 million increase were applied, the property owner would pay $2,599, which would be about a 9 percent increase in total property taxes.
$80 million deficit this year
Allegheny County Commissioner Corey O’Connor said last week that the county is expected to enter the end of 2024 with a $60 million budget deficit, with revenue below 2023 levels and federal pandemic aid coming off the books. Cox put the deficit even higher, at $80 million.
O’Connor said in June that the county will be spending more than it receives in 2023, marking its first deficit since 2011. At the time, he blamed the erosion of the property tax base and increased costs for the jail and health department, as well as widespread health care spending in the county. contract employee.
Cox said the county has had a structural deficit since 2021, which has only been offset by federal relief funds.
The financial woes reflect the post-pandemic pain felt by Pittsburgh and its school district. As the city of Pittsburgh plans budget cuts for next year, Pittsburgh Public Schools is considering a drastic school consolidation plan to cut costs.
All three taxing agencies have been hit by court-ordered changes to the way property taxes are calculated, leading to a wave of appeals and lower taxes for many commercial property owners. Cox estimated that the county’s total assessed value decreased by $3 billion last year, compared to typically increasing by about $1 billion a year.
Charlie Wolfson is a local government reporter for Public Source. Contact him at charlie@publicsource.org.
This article was originally published on PublicSource and is republished here under a Creative Commons license.
