In an effort to reduce the impact of a hefty increase in property assessments -- and avoid violating a state law that a municipality can't have a revenue windfall as a result of countywide reassessments -- Pittsburgh Mayor Luke Ravenstahl is proposing a package to help property owners.
The proposal Mr. Ravenstahl unveiled Monday includes a 30 percent cut in the property tax rate and increases in the exemptions for owner-occupied homes and senior citizens. If city council approves, property tax millage would be cut from 10.8 to 7.56 mills, the exemptions for owner-occupied homes would increase from $10,000 to $15,000 and the break for senior citizens would go from 30 percent to 40 percent.
The reduction in tax millage is required as a result of new assessments that Allegheny County performed under an order from the state Supreme Court. Property values across the city went up 48 percent with tax-exempt properties included, said the mayor and finance director Scott Kunka, but with those properties excluded the city can reduce the tax rate by 30 percent and offer exemption increases without collecting more revenue.
"It's revenue neutral," Mr. Ravenstahl said. "We will not receive any additional revenue."
Mayoral spokeswoman Joanna Doven called the proposals "the best equation that would protect the most property owners." A general millage reduction applies to all taxpayers -- including corporations and commercial property -- but the exemptions reach homeowners who may need a break, the mayor said.
Also, the reduction in the millage rate doesn't necessarily mean a lower tax bill. The average assessment for taxable property increased about 32 percent, so those with a lower increase can expect a lower bill and those with an increase higher than 32 percent could get a higher bill.
Under the mayor's proposal, taxes for a house valued at $100,000 would be reduced from $1,080 to $756 this year.
Overall, the mayor said 30 to 40 percent of property owners will receive a lower bill, 10 to 12 percent will remain about the same, and the rest can expect a higher bill.
The city opposed the reassessment process because it wasn't required in every county across the state, but he acknowledged it was good news that the value of city property continues to rise.
"This doesn't mean we're supportive of the process," the mayor said. "We're making the best of a very bad situation here."
City council members and Controller Michael Lamb generally supported the mayor's tax package, which council must approve by Jan. 31 to support the city's $470 million operating budget.
Councilman Patrick Dowd, who voted against the budget because he doesn't think it funds services such as the police well enough, said he wants to review the details of the exemptions to make sure they don't reduce city revenue. He said the mayor is "exactly right" that increasing the exemptions "essentially redistributes the burden to larger taxpayers."
Mr. Lamb, who last fall recommended increasing exemptions as part of the package, and Councilman Ricky Burgess also said they were pleased to see they were included.
Mr. Ravenstahl said the package of assessment adjustments is a follow-up to the city's efforts to help property owners file assessment appeals and provide certified appraisals.
"We must make sure we are doing everything we can to protect homeowners from being taxed out of their homes, especially our low-income seniors," the mayor said.
The city automatically will add the exemption increases to those who already receive them, the mayor said. Anyone who isn't sure they receive the exemption or who wants to apply should contact the city's nonemergency 311 center or visit pittsburghpa.gov/propertytaxassist.
Anyone who needs help filing for the exemptions can schedule a meeting with a city finance employee by calling 311.
Because assessment appeals delayed setting the tax rate, city tax bills likely will be mailed by the end of February, a month later than normal.
Ed Blazina: email@example.com or 412-263-1470.