Millage rates still make for taxing debate
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Allegheny County reassessments have brought lower tax bills to hundreds of thousands of homeowners -- and, OK, higher taxes to hundreds of thousands of others -- but the bills may still be too high for all.
It could be months before we know. With thousands of appeals still pending -- many as big as a shopping mall -- trying to nail down an honest millage rate is about as easy as stapling Jell-O to the wall. Yet some are trying.
County Controller Chelsa Wagner hasn't budged from her belief that the county needs to drop its property tax another half-mill, from 4.73 to 4.23. Each mill means a dollar in taxes for every $1,000 in valuation, so cutting a half-mill would mean $50 to a homeowner in a place that the county says is worth $100,000.
Not exactly life-changing money, but who couldn't use another 50 bucks?
Ms. Wagner is not stopping with the county. Soon, the controller's website will post a "Windfall Watch" for all 130 municipalities. Visitors can see what the property tax rate in their community ought to be, and compare that to their tax bill.
If the rates don't come down they can be challenged in court, Ms. Wagner said. Short of that, she noted the controller has subpoena power to find out more.
County Executive Rich Fitzgerald entered office fighting the reassessments and now opposes any additional cut in the millage rate. He says it's premature. County council cut the rate by more than a mill in December, and Mr. Fitzgerald says that was enough.
I have no slam-dunk evidence to say he's wrong. As he says, property owners' appeals keep shrinking the pie. Two months ago, he said, it looked like reassessments had kicked the total property valuation in the county up 35 percent, and that's been trimmed since to 30 percent.
Fair enough, but it's also true that the county raised the millage rate 21 percent the year before these assessments took effect. If anyone should have wiggle room to cut, it's the county.
The county portion of the property tax bill gets less attention because it's generally a fraction of what's paid to the municipality and school district. But Carnegie Mellon University economist Robert Strauss' website, propertytaxestimator.net, shows municipal and school district tax cuts being deeper and wider than the county's.
Don't believe that, harried homeowner? Then take a look at your tax bill and see if it parallels mine. Despite a 26 percent increase in the assessment of my North Side home, my city taxes have gone down 12 percent and my school taxes 14 percent. Meantime, my county taxes have risen 5 percent and are up almost 28 percent since 2011 due to the county's millage rate increase prior to new assessments.
Mr. Fitzgerald says the county's increase came because it was broke after a decade without a tax hike. On an annual basis, the increase worked out to less than 2 percent a year, he said. Unlike the city, which got a revenue bump from an increase in the occupation tax, higher parking rates and such, the county's highly dependent on this single source of income.
Yes, but it's also true that sticker shock comes from reassessments being delayed for so long. For a decade, some homeowners paid more than they should have and some less because the old assessments were so far from reality. (Yes, even further from reality than new assessments, taken in total.)
State law says the county is entitled to zero windfall from this process; its millage rate multiplied by its valuation must reap only the same revenue that was brought in before the reassessment.
Maybe further appeals will bring valuations down on enough skyscrapers so it's the city and schools that find themselves short. Mr. Fitzgerald promises he will go to county council to cut the millage rate if it turns out he and his Democratic council allies have set it too high. We'll be watching.
Correction: This story has been updated to give the correct address for the website created by CMU professor Robert Strauss. It is propertytaxestimator.net.
First Published March 7, 2013 12:00 am