So! We have these ‘Property Taxes’…

It should be starting to occur to people:

A 0.25 mil increase in the property tax would cost individual property owners $25 annually per $100,000 of assessed value, while raising $3.25 million annually, in this case for Carnegie Libraries of Pittsburgh (source).

As of this early date, nobody is indignantly recoiling from the concept. There is a comprehensible rationale for the tax increase, after all, and the cost is not very onerous compared to it.

So hypothetically and presumably, a 1.00 mil increase in property taxes would cost owners $100 per $100,000 in assessed value and raise $13 million annually for, let’s say, the City of Pittsburgh.

$13 million with which the City might be enabled to pave a few streets, demolish some rat traps, and fix some pools — that is, here and now, during the 3 to 5 years it will take before our pension fund runs out NO GOD NO WAIT I MEAN while we all address meaningful pension reform, maintain our pay-as-you-go capital budget and approach our debt drop-off in 2017.

The take we might generate from a one mil property tax hike is just a bit shy of the $15 million we hoped to generate with the 1% tax on college tuition. That $13 million also lies roughly in line with figures quoted in the recent past for various budget gaps, capital budget reductions, final solutions, forever elusive non-profit PILOT arrangements, pledges of diverted future revenue et cetera.

$100 on the other hand is a couple new tires, or a frightfully austere night for the family at PNC Park (bringing-a-flask austere), or a fraction of one’s insurance deductible should the deterioration of public services lead to a problem in one’s home.

The conventional wisdom has been that, “If we raise property taxes, there will be a ‘whoosh’ as the city empties out and collapses.” However when contemplating sums like $100, one begins to wonder if that is really code for, “If I agree to raise property taxes, my next opponent will have something easy and interesting to say against me.”

Thus for most who are in a position to decide, it’s preferable to see taxes raised only upon a deus ex machina forcing us — that is, a “state takeover”, legal ruling or similar. Problem is, awaiting the arrival of an outside force takes much longer — time during which problems fester, deterioration becomes decay, decay becomes disease, and real emptying-out might actually be occurring more subtly as a result.

Mayor Ravenstahl deserves credit for having actually advocated raising revenues — via a tuition tax, yes, and via an infrastructure lease (no plan for parking rate increases was contemplated prior to the Mayor putting higher rates on the table in that way). However the easiest, most forthright, and perhaps the most painless way to collect more revenue remains a strict taboo, a ghost story.

It may not have to be property taxes, but there are not a plethora of options. If we understand that we need more money, it might be best to commence doing what is necessary to assemble more money — rather than jockeying around the periphery and politically gaming the endgame, the deus we all sense is coming. It might even be a good way to be remembered — ultimately — as the one who was serious.

24 thoughts on “So! We have these ‘Property Taxes’…

  1. Minuteman

    Good post. Only a couple of bloggers are talking about Pittsburgh's municipal funding crisis. People can't be bothered to put issues like this into the context of their lives. It's easy to get fooled, close to government machinations as many of us are, into thinking that we have a well-informed, enlightened citizenry, but the ugly truth is that we just don't, and the moments of truth are on the horizon and quickly nearing. $25-$100 a year to fund really important (to all of us) municipal assets and services is jack squat when it comes right down to it…but wait until Pintek gets his grubby tonsils on it, it'll be as if Tom Murphy himself is at your doorstep trying to jam a 2×4 wrapped in sandpaper down your throat. It's nice to see some robust Council support for a revenue-raising initiative though…we certainly don't see that every day, but then again there are the usual few sitting it out…

  2. Anonymous

    Maybe we need an ala carte tax system. You get a choice of where your tax dollars go. East Enders want to pay more for libraries, but maybe folks in the South Hills would rather have more streets paved. The CLP task force started it, so let's go full out and break it down.

  3. MH

    Everybody knows they only pave a street if a committee member lives on it but anybody can use the library.

  4. Bram Reichbaum

    Shawn – Which “they?”

    Minuteman – Thanks for that. When I saw 1 Comment pop up last night, my first though was, “Oh, here it comes…” I think you're dead on about Pintek for example, but remember if he declined to attack a tax increase and took a nuanced view, his everyday audience would jump straight down his throat, “Why have you forsaken us?”

  5. rich10e

    and how do was properly address property tax increases without discussing the ever increasing gobbling of property by Pitt in Oakland, CMU in Oakland and Point Park in downtown…and i'm happy to see these expanding universities becasue i believe they are great for Pgh, but what about the $$$$???

  6. Kris

    Any thought to State level reform?
    Compare other states with flat taxes and less exemptions vs our current system. I am opposed to taxes that are to narrow in scope. The tuition tax only affected college students, increase in mils only affect property owners, sin tax – only smokers and drinkers. Sales tax affects everybody. If you want to be fair- be fair and raise a taxes that affect everybody and not a small or very small population which nets a small gain.

  7. C. Briem

    Compare other states with flat taxes and less exemptions vs our current system.

    Don't you have this backwards? Isn't Pennsylvania one of the few states that still has a flat income tax. Almost all states have at least somewhat progressive taxes???

  8. SteelCityMud

    I don't oppose raising taxes, but before we do, it seems that we need a better accounting of what we have. There have been many reports that indicate that Pittsburgh is sitting on old accounts that contain unused funds and that no accounting for them exists.

    Further, if we are able to place a measure on the ballot to tax ourselves to support a library, why can't we do the same to tax UPMC? 100 bucks per property won't do a whole lot to deal with the pension issue, but a tax on UPMC and the property it holds could make a significant dent.

    Also, why is Ravenstahl able to get away with sitting on the funds the City has already promised to the library. I don't want a new tax until I know that my representatives will actually have a say in how it is spent!

  9. Anonymous

    I'm bugged by Dowd's fear mongering, all-or-nothing rhetoric. On the other hand, it's become common knowledge he's angling hard for the CLP director job, so his words may be carrying less and less weight.

  10. Anonymous

    Bram, this post is a poster for why the library tax is bad. Yes, $25 per $100,000 ain't so bad. Yes, $100 per $100,000 aint the end of the world. But…..$125,000, on top of already some of the highest taxes in the region, and then the next tax that comes down the line and we are back to the killer and uncompetitive taxes that drove everyone out of the City in the first place. In case you didn't see, the City population is STILL declining. It is already too easy to move to the burbs and take advantage of the City, but pay lower taxes, send your kids to better schools and much more by way of services for the lower taxes you pay. In fact, you get a fully functioning library that doesn't seem to need more money.

    Besides, it isn't just the $25 or $100 on your house that is important. The fact that CLP supporters keep saying that is indicative of their intent to misguide people. The tax will hit commercial property owners much harder. You know that new $400 million green tower PNC wants to build? Well, the CLP tax along is an additional $250,000 in City taxes. Start adding everything else up and you get the picture why Southpointe is booming. The best example are startups. Lots of them move to Cranberry (yes, believe it) or other burbs because an extra $100,000 in City taxes (property, payroll, income) means a couple employees. The City simply cannot raise any more taxes on anyone unless it is uniform across the region. The attitude expressed in this piece had killed the City in the past and will kill it again.

  11. Minuteman

    Really, it would be AWESOME if all the folks that expected a vast array of municipal services and cultural attractions to be tendered to them for nothing actually DID pack up and move to Cranberry, or El Salvador, or whatever. I hear the Nazi colonies in South America are offering tax-free move-in incentives and free beds in their TB wards, should be a good fit.

    Meanwhile, let the folks who are happy to support the city and the great things in it continue to come in and set up house and shop. Let these folks look over the tax situation and determine how best to step forward with reform and appropriate reconstruction with an eye towards healthy, sustainable growth in the long term.

    There are lots of folks who love the city and are happy to roll up sleeves and work to support it. It's a great place worth fighting for, and the process of renewal is a great thing to take part in. If we have to shed lots and lots of folks who will NEVER be happy and expect everything to be gift-wrapped and handed to them, then hell, let's let it happen already. Good stinking riddance.

  12. Bram Reichbaum

    That reminds me of the words accompanying a Rob Rogers cartoon on the website the other day: “Surely the city can come up with a better way to generate some revenue.” It's always at that point in policy criticism that people set down their pens with apparent satisfaction.

    Similarly, today Samantha Bennett starts out with, “The pension fund needs to be bailed out, of course…” and then doesn't give that a second thought as she slams the parking rate increases.

    Maybe we need to pass a law requiring that all media opinion be revenue-neutral?

  13. Anonymous

    I fully support a tax to keep libraries open, but I need a guarantee that library board meetings will be open to the media and the public in the future.

    If MORE public money is gong into CLP, the public should be able to know what's going on.

  14. Anonymous

    Ah, minuteman, the problem is that the City doesn't have enough money with the people that have set up shop. That is the problem and is why the City has it's hand out to the State. All thud people that bailed to the burbs control the suburban legislators. Bram, your last comment is not far off from my point though. I agree we need new revenue. I agree the City is worth fighting for. However, any tax that is on City residents only should be off the table, plain and simple. Despite minuteman utopian society, the City is uncompetative from a tax and services standpoint and it is getting worse. If minutemen want to give the city 10% of their income in taxes to the City no one stopping them. luke's tuition tax wasn't a terrible idea. Neither was the parking lease. If anyone else has creative solutions they should step up. Problem is that minutemen will shoot done those ideas and then seek raise property taxes while Rome burns.

  15. Bram Reichbaum

    Anon 2:20 – You write, “However, any tax that is on City residents only should be off the table, plain and simple.” I don't like taking things off of the table per se, but I take your point very seriously. The problem with many solutions which lean on non-residents, unfortunately, is that we are precluded from doing so without their political consent. In the case of the commuter tax, that's literal, in the case of tuition and maybe the lease, it is less literal. As to where to go from here, I confess I always had a weakness for the not-for-profit water rate hikes and hospital bed taxes.

    C. Briem – By deigning to comment under this post without further comment, is to warrant that you are in general agreement with my “3 to 5 years” assertion. Perhaps you'd like to advise people on the over/under, if “taking care of it in advance” (by any party) is considered a push.

  16. deegazette

    The school board has been proud of not causing or calling for a tax increase in 10 budgets. That record won't likely hold for much longer. Could this be a first-come-first-served situation or the first need to raise taxes addressed?

  17. MH

    Given that enrollment keeps dropping and assessed property values don't, I don't think the school board has any grounds to be proud that they haven't raised taxes.

  18. Bram Reichbaum

    Eek, deegazette! I didn't fully consider that, in light of the Corbett era.

    Maybe we really should reopen institutional water and/or beds. There were 4 “options” once upon a time, of which tuition didn't fly. Got to figure this is an opportune moment politically.

  19. Anonymous

    Why is everyone upset about the taxes they pay as city residents? Did I miss the bus somewhere? I pay less in taxes living in the city than I would in the suburbs; I get my trash and recycling taken care of; police, fire, EMS; parks, access to pools, street sweeping (sometimes), snow removal, etc. Am I missing something?

    If I moved to Cranberry I'd be paying more in taxes and getting fewer services.

    Yes, I pay a higher wage tax. But in the end it would balance out anyway.

    This way, I have close access to everything mentioned above plus a vibrant nightlife and a community in which I don't have to get in my car just to get to a store.

  20. Anonymous

    School board cuts this year with school closures will amount to $7 or $8 million in savings. The district is projecting at least a $40 million budget gap in 2012. Some folks are saying this could be as high as $100 million. Those are BIG numbers for residents. If taken via property tax increase, it could amount to $400 – $1,000 tax increase.

  21. Jack Napier

    Property tax reform across the state is the only way to fix the education mess. We need to adopt a system like either Maryland or Michigan, both run by state, take this out of the hands of the local counties.
    We also need a commuter tax for our illustrious suburban friends, that would mean that areas such as Cranberry and Southpoint wouldn't be as attractive as they are now.It's time that people in Allegheny County realize that the city is the hub of the region, how goes Pittsburgh so goes the region.
    This little tax would also provide a bump in ridership of the Port Authority and make that system a little sturdier as well.


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