Pittsburgh Controller Michael Lamb on Wednesday called for more generous homestead exemptions to help city homeowners weather new property assessments, something Mayor Luke Ravenstahl's office said it's already working on but the Pittsburgh Public Schools said it doesn't appear feasible now.
In a letter to Mr. Ravenstahl, city council members, schools Superintendent Linda Lane and school board members, Mr. Lamb called for enhanced city and school district exemptions because of burdensome tax increases some homeowners will face when new assessments effect in January.
State law requires an adjustment in the city's homestead exemption whenever there's a reassessment, and the mayor's staff is working on the issue but doesn't yet know how generous the change might me, Joanna Doven, Mr. Ravenstahl's spokeswoman, said.
The controller's office questioned Ms. Doven's assertion that the city is legally obligated to adjust the homestead exemption.
City and school district exemptions are governed by separate laws. The district's exemption is financed by gaming revenue, and a change would raise complex legal and financial issues, including possible lost revenue for the district, Solicitor Ira Weiss said.
Given the district's existing revenue shortfalls and efforts to cut expenses, an increase in the homestead exemption doesn't appear to be a feasible option now, district spokeswoman Ebony Pugh said.
Under state law, municipalities and school districts may not reap a windfall because of new assessments. Rather, they must reduce millage or take other anti-windfall measures to keep property tax revenue the same, or about the same, as it was before the reassessment.
Mr. Lamb estimated that new assessments would boost the city and school district's real estate valuation by 20 percent to 30 percent. He made no recommendation as to how much the homestead exemptions should be increased, but said homeowners would benefit more from enhanced exemptions than they would millage cuts, which also would go to owners of business properties.
Homestead exemptions are tax breaks applied to owner-occupied homes. The city's exemption is $10,000 and the school district's is $19,430. If a family's home is assessed at $50,000, its city tax bill is based on $40,000 of assessed value, a savings of $108 at current millage rates, while its school district bill is based on $30,570 of assessed value, a savings of $270.47 at current millage rates.
"There are a lot of people in Pittsburgh who have lived in their homes for a long time. Their homes have increased in value significantly, and they feel the pinch. The cost of home ownership for these people is beginning to get exorbitant. This is one way we can help them," Mr. Lamb said.
Ms. Doven said the mayor's office agrees that it must help homeowners as much as possible and views an adjusted homestead exemption as one way to do that.
Joe Smydo: firstname.lastname@example.org or 412-263-1548.