Pittsburgh Public Schools consider increasing revenue from property taxes
With many property assessment appeals still unsettled, Pittsburgh Public Schools Superintendent Linda Lane is recommending the school board raise the total revenue received from property taxes after 11 consecutive years of steady taxes.
The money generated by the increase -- $3.2 million -- would go in an escrow fund to pay refunds due to property owners who win future appeals.
The increase in revenue would come even as the millage falls because of a countywide reassessment that takes effect in 2013.
Under the reassessment property values in the city have increased by roughly 50 percent, according to school officials. The state school code prohibits school districts from reaping a windfall from the reassessment. So, it must reduce the rate so that it generates the same revenue on the higher values as it did on the lower values.
Beyond that, the district is limited to an index set by Act 1, which is 1.7 percent. In the preliminary example, the allowable increase amounts to 0.15 mill.
The current millage is 13.92. The equivalent millage with the new property values would be 9.33. If the index of 1.7 percent is added, the rate would be 9.48.
One mill amounts to $1 of tax for each $1,000 of taxable property value.
Whether the change would be an increase for an individual taxpayer would depend on how the individual's property value changed in the reassessment. Some may find their taxes lower, some higher and some about the same.
School solicitor Ira Weiss said, "The rule of thumb is if someone's property increased in assessment at or less than the rate for the city as a whole their school tax bill will be less than it was last year."
Budget manager Ronald Joseph said the district estimates that the reduction in assessed values in pending appeals could reach $400 million, which would result in a loss of revenue of $3.6 million.
"The fact is we've got a significant number of appeals still pending," said Ms. Lane. "They'll still be pending in January. That impacts the board's ability to vote a millage rate that is appropriate."
At a board committee meeting tonight, board members asked questions, but member Bill Isler was the only one to express a strong opinion during the meeting.
"To me it is a smart way to go because what you do is you protect yourself in case of appeals, "Mr. Isler said.
Even without the concern over pending appeals, the proposed preliminary budget for 2013 has a deficit of $9.86 million. If the current course doesn't change, the deficit is expected to grow so much that the district would use up its fund balance and run out of money in 2015. On top of that now is the additional burden of potentially successful reassessment appeals.
"Because of our projected finances right now, it's a much higher risk. I think it would be frankly irresponsible of me not to advise the board of this particular risk and propose a way to mitigate it," Ms. Lane said.
The board cannot readjust the millage after the appeals are resolved.
The district expects the value of property in the city to reach about $20.5 billion for 2013, an estimated increase of about 50 percent.
First Published December 4, 2012 7:12 pm