Millage on land

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A June 9 article stated that Pittsbugh City Council was debating the recommendations under Pennsylvania’s Act 47 program for distressed municipalities (“Recovery Plan for City Leaves Sides at Odds”). Council is looking at a real estate millage increase.

A potential choice is between two millage increases. One is on the value of unimproved land. The other is on the value of the building or other improvement. Beginning in 1914, Pittsburgh had a higher millage rate on unimproved land. The lower millage on improvements encouraged desirable construction and expansion of buildings. The millage rates were equalized in 2001.

A return to a higher millage rate on unimproved land in 2015 would have desirable effects in addition to the augmented revenue for the city. The most valuable land is owned by wealthy individuals and corporations. They have prospered from insufficient assessment and taxation of the land throughout many past years. Owners of vacant lots would be motivated to sell them at reduced prices, making them available for new owners who would develop them.

Millage should not be increased on improvements. Most homeowners have a well maintained and adequately taxed house on a small plot of land in an inexpensive residential neighborhood.



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