This story was originally published by PublicSource, a news partner of NEXTpittsburgh. PublicSource is an independent nonprofit newsroom serving the Pittsburgh region. You can sign up for their free newsletters at publicsource.org/newsletters. By Charlie Wolfson, PublicSource October 8, 2024 Allegheny County Executive Sara Innamorato proposed to increase the county’s property tax rate by 2.2 mills in 2025 during her budget presentation to County Council Tuesday evening. If approved by council, it would be the first increase to the county’s millage rate outside of a reassessment in recent memory. One mill equates to $1 in taxes for every $1,000 assessed value. If a property is assessed at $100,000, 2.2 mills would come out to $220 per year in tax. The county millage rate has been 4.73 since 2011. “We cannot cut our way to a balanced budget,” Innamorato said Tuesday. “We’re not going to drastically cut critical services that the people of this county rely on.” Allegheny County Executive Sara Innamorato presents the proposed 2025 budget on Oct. 8, at the Allegheny County Courthouse Downtown. Photo by Anastasia Busby/PublicSource. The change won’t affect tax rates set by municipalities and school districts, which together make up a bigger portion of property owners’ tax bills. Innamorato said the increase will generate about $160 million in new revenue for the county in 2025. That could be a needed boost with federal pandemic relief funds expiring this year and turmoil in the property tax revenue stream threatening local government budgets and reportedly causing a major deficit for the county this year. The proposed operating budget includes $1.2 billion in spending, a 3% increase over the 2024 budget. Tim Cox, the county director of budget and finance, said Tuesday that the 2.2-mill increase was calculated to close an expected deficit for next year and replace millions of dollars the county will draw from its reserve funds this year. Innamorato is also proposing to increase the county’s homestead exemption from $18,000 to $21,000, shielding owner-occupants from some, but not all, of the tax increase. A county budget official estimated Tuesday that for the median assessed value in the county — $110,000 — an owner would end up paying about $15 more per month. The homestead exemption reduces the taxable value of owner-occupied properties. John Petrack, executive vice president of the Realtors Association of Metropolitan Pittsburgh, said he thinks a 2.2-mill increase is too drastic. “It’s hard for me to see the justification of a close to 50% increase,” Petrack said. “Is there a cost savings that could be looked at?” Before Tuesday’s presentation to council, Innamorato said her administration chose to propose a millage increase rather than cut expenses. “So many people in this county are asking county government to do more,” Innamorato said. “Municipal leaders are asking us to do more” to help police, fire and social services. Petrack said he is concerned the change could have consequences for renters as well as homeowners. “Any cost a business has to absorb eventually gets passed onto the consumer,” he said. “The landlord eventually will pass those costs on. … That will probably result in a small increase in rental rates countywide, also.” The tax increase must be approved by 10 of council’s 15 members. Most members stayed quiet during a question-and-answer session with Innamorato during Tuesday’s council meeting, though at-large Republican member Sam DeMarco questioned whether the proposed budget includes too much spending. “I would just ask that you really examine hard areas of potential savings or austerity measures we can take,” DeMarco said. “So if we recognize that there has to be a tax increase, that it doesn’t have to be 46%.” Innamorato said the tax increase will bring in an additional $160 million. This is her administration’s first budget proposal to County Council. Councilor Sam DeMarco sits second from right. Photo by Anastasia Busby/PublicSource. Council President Pat Catena promised discussion during upcoming budget hearings and said council would ask “tough questions” of the administration, and he urged the public to participate in the budget process. A “2.2 millage increase was the proposal this evening,” Catena said. “We’d like to hear from all of you.” End of stable era County property owners have not seen a millage change since 2013, when rates were reset after a countywide reassessment. (Rates are reset to comply with laws requiring reassessment to be revenue-neutral for the county.) Former County Executive Rich Fitzgerald, who led the county from 2012 through 2023, kept the rate steady while also opting against another countywide reassessment — instead using a base year plan in which most properties are taxed based on 2012 market values. “The previous administration could have chosen a path of more incremental increases since 2012, and in the absence of [federal relief] money … they would have needed to do so years ago,” Innamorato said. Fitzgerald declined to comment for this story, but some of his past public statements suggest he saw a tax hike as inevitable toward the end of his tenure as executive. “I will tell you that at some point, some council and some county executive is going to have to do an inflation adjustment on the millage,” Fitzgerald said during his annual budget presentation to council in November 2022. The base year system is still in place, as Innamorato weighs whether to conduct a reassessment. She vowed to pursue one while campaigning last year, and Pittsburgh Public Schools is trying to compel her to do so in court. But she has yet to lay out plans for one since taking office in January. A member of the audience records Innamorato as she presents the proposed 2025 budget. Photo by Anastasia Busby/PublicSource. While the property tax rate has been steady since 2013, the figure is just a slice of the three-part property tax faced by property owners. School and municipal taxes are generally a bigger portion of an owner’s property tax bill, and those rates can fluctuate depending on local school boards or municipal councils. The owner of a $100,000 property in Pittsburgh, for example, would owe $473 to the county, $881 to the city and $1,025 to the school district in 2024 — a total of $2,379. If the county’s proposed 2.2-mill increase were applied, that owner would owe $2,599 — an increase of about 9% in their total property tax bill. $80 million deficit this year Allegheny County Controller Corey O’Connor said last week that the county is on track to end 2024 with a $60 million budget deficit, with revenues coming in below 2023 levels and federal pandemic aid off the books. Cox estimated the deficit higher, at $80 million. O’Connor said in June that the county spent more than it received in 2023, its first deficit since 2011. At the time he blamed the eroding property tax base and cost increases in the jail and the Health Department, and the county’s widespread use of contract employees. Cox said the county has been running on a structural deficit since 2021, only offset by federal relief funds. The fiscal trouble echoes post-pandemic pain felt by Pittsburgh and its school district. Pittsburgh is lining up budget cuts for next year, while Pittsburgh Public Schools is considering a sweeping school consolidation plan to cut costs. All three taxing bodies were battered by a court-ordered change in how property tax bills are calculated, which led to a wave of appeals and lower tax bills for many commercial property owners. Cox estimated the county’s total assessed value has dropped $3 billion in the last year, compared to a typical annual increase of approximately $1 billion. Charlie Wolfson is PublicSource’s local government reporter. He can be reached at [email protected]. This article first appeared on PublicSource and is republished here under a Creative Commons license. The post Your Allegheny County property taxes could be going up. Here’s what you need to know appeared first on NEXTpittsburgh.