As required by state law because of an overall increase in property values, both Pittsburgh Public Schools and the city of Pittsburgh are on course to reduce property tax rates by about 30 percent for calendar 2013.
The school board Wednesday night unanimously approved reducing the rate from 13.92 mills to 9.65 mills.
Pittsburgh City Council Wednesday gave preliminary approval on a unanimous voice vote to Mayor Luke Ravenstahl's tax proposal that will drop the millage rate from 10.8 mills to 7.56 mills. A final vote is set for Tuesday.
Whether the taxes of an individual property owner will go up depends on how the property fared in the countywide 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 amounts to $1 of tax on each $1,000 of taxable assessed property value.
In the case of the school district, even though the millage rate is lower, the total revenue to be collected is 1.7 percent higher than what the old rate provided, an additional $3.2 million.
The board also increased 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 on that portion of their property value.
State gaming revenue provides nearly $15.6 million for the school district -- which includes Pittsburgh and Mount Oliver -- to offset exemption, but the increase primarily is the result of the change in property values, not increased gaming revenue.
The proposal for the city calls for increasing the exemption from $10,000 to $15,000.
In addition, the city proposal increases a tax break for senior citizens from 30 percent to 40 percent.
By law, neither the city nor the school district can reap a windfall by the overall increase in property values. Thus, millage had to be lowered.
Pittsburgh Public Schools officials calculated a "revenue neutral" rate on the values of existing property and then added 1.7 percent, which is permitted under what is known as the Act 1 index.
This money is intended to create a fund to cover pending assessment appeals. District officials estimate such appeals could cost as much as $3.6 million. The school board last month approved a $521.8 million general fund budget with an operating deficit of $9.8 million.