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Lamb Calls For Higher Homestead Exemption

Pittsburgh’s top financial watchdog says the city and school district should increase their homestead exemptions when the new property values go into effect next year.  Pittsburgh Controller Michael Lamb sent a letter to Pittsburgh Mayor Luke Ravenstahl, members of Pittsburgh City Council, Pittsburgh Public Schools Superintendent Dr. Linda Lane and members of the board of the Pittsburgh Public Schools proposing the idea. 

The homestead exemption excludes a portion of the value of a resident’s primary home from property taxation.  The goal is to shift some of the tax burden away from homeowners and on to commercial properties. 

When the new property values are certified, taxing bodies must roll back their millage rates to hold income from real estate taxes steady.  In Pittsburgh, the assessed value of all the property in the city is expected to increase between 20 and 30 percent.  The 2011 City Real Estate Tax rate is 10.8 mills (or $10.80 on a $1,000 home). The 2011 School District Real Estate Tax rate is 13.92 mills (or $13.92 for every thousand dollars assessed value).

Lamb is suggesting that the city and school district adjust the millage rate based on an increase in the homestead exemption.

“This would not only provide needed relief to city homeowners but will also act as an additional incentive to attract new residents to Pittsburgh,” said Lamb.  “Our city and schools need to reverse the declines we have seen in population and student enrollment.”

Currently the City of Pittsburgh offers a $10,000 homestead exemption, which means the first $10,000 dollars of a home’s value is not taxed.  The number fluctuates for the school district, but according to the city’s website the level was set at $19,430 for the 2011 tax year.  Lamb did not suggest a new amount in his letter to the city and school district.

Under the state’s anti-windfall provisions, once a taxing body has rolled back its millage rate following a reassessment, it can take a second vote to increase its property tax income by as much as 5-percent.   If the municipality, county or school district would like to raise taxes above the 5 percent mark it would have to get approval from the courts.