Property tax appeals sharply reduces revenue for Pittsburgh Public Schools

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Property tax appeals have reduced property tax revenue to Pittsburgh Public Schools so much that the average increase in property value from the county reassessment has dropped from 47 percent to 36 percent.

At a school board committee meeting tonight, Ronald Joseph, chief operations officer for the school district, said that property tax revenue is $10.3 million below the budgeted amount and appeals aren't done yet.

Attorney Janet Burkhardt told the board that some of the property assessment increases were unwarranted. She said of the neighborhoods that should not have had assessment increases did have them while others that should have had them didn't.

She said the district next year will take a "very aggressive" approach toward some properties, including those for which sales records show the assessment should be higher.

This is the first year of collecting taxes under the reassessment. The school district set its tax rate at 9.65 mills, which amounted to an increase of 0.16 mills, the most allowed by law. That enabled the district to set up a $3 million escrow fund for appeals, but Mr. Joseph said that has been exhausted.

Because the district operates on a calendar year, the board is expected to vote this month on a 2014 budget.

No decision has been made on the property tax rate. Mr. Joseph earlier presented a scenario in which, if the board chooses, taxes could go up by 1.7 percent under state law. Tonight he explained that is the base rate. An adjusted rate would permit an increase of a maximum of 2 percent, which would be 0.19 mills.

One mill equals $1 of tax for each $1,000 of assessed property value.

Mr. Joseph provided this example of a taxpayer whose property was assessed at $100,000 before the reassessment and taxed at the old rate of 13.92 mills in 2012. That taxpayer paid $1,392 a year in school property taxes.

If that house were then reassessed at the average increase of 47 percent, its value would have been $147,000 and its taxes, at the new rate of 9.65 mills, would have been $1,419, an increase of $27.

However, if the property owner appealed and the increase were reduced to the average of 36 percent, making the value $136,000, then the annual tax at 9.65 mills would have been $1,312, which is $80 less than that property owner paid in 2012 before the reassessment.

If the owner of the $136,000 property were to pay the rate of 9.84 mills in 2014, the amount would be $1,338, which is $54 less than 2012.

The reality for many property owners would be different -- higher or lower -- depending on the change in their assessments.

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


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