Pittsburgh schools to vote on 30% lower tax rate

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The Pittsburgh Public Schools board next week will vote on a property tax rate that decreases the millage by nearly one-third but increases the revenue the school district will receive.

At an agenda review meeting Wednesday, the board reviewed a proposal to reduce the property tax millage rate from 13.92 mills to 9.65 mills, which is about a 30 percent reduction.

The district is able to reduce the millage rate because the recent countywide property assessment resulted in increased property values. In addition to that, district officials plan to raise total property tax revenue by 1.7 percent -- $3.2 million -- to create a fund to cover pending assessment appeals. Board members listened to the presentation but made no comments on it during the meeting.

The percentage of reduction is similar to a proposal announced this week by Mayor Luke Ravenstahl for city property taxes.

Whether the taxes of an individual property taxpayer go up or down depends on the final result of the reassessment. Overall, property values in the city went up 48 percent. If the value of a particular property went up more than that, taxes will increase. Taxes will decrease if the value went up less than that.

One mill of property tax amounts to $1 on each $1,000 of assessed value.

In addition, the board is poised to increase the homestead and farmstead exemption from $19,937 in 2012 to $28,685 in 2013. This applies in certain cases, such as owner-occupied homes, in which taxpayers are exempt from property taxes for that portion of their property value. State gaming revenue provides funds for the exemption, but the increase primarily is the result of the change in property values, not increased gaming revenue.

The district is not permitted to reap a windfall on the increased property values, but it can increase revenue by up to 1.7 percent under what is known as the Act 1 index. The proposal calls for using the full 1.7 percent to set up the fund to cover appeals that may be won by property owners. District officials estimate such appeals could cost as much as $3.6 million in revenue.

District officials have been concerned about the impact of appeals because the district already is anticipating a deficit in 2013, and, without a fund to cushion the blow, appeals could make the deficit worse.

If a homeowner's house had an assessed value of $100,000 after any applicable homestead exemption, he or she would have paid $1,392 in property taxes. If the property value was unchanged in the reassessment, the taxpayer would pay $965 under the new rate.

At the proposed rate, the property tax would generate $194.1 million for the district. Last month, the board passed a $521 million budget for 2013.

Most school districts budget on a school year, but Pittsburgh uses a calendar year.

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Eleanor Chute: echute@post-gazette.com or 412-263-1955.


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