Is the 2013 Allegheny County Millage Rate Right?
It's a tricky bit of business to set a millage rate in any circumstance, according to one Allegheny County Council Member, but the county's court-ordered property reassessment has injected even more guesswork into the process for 2013.
On Tuesday, County Council approved a $799 million operating budget with a millage rate of 4.73. Council reduced the millage rate nearly 17 percent from the current level of 5.69 based on a web of estimates and projections tied to the reassessment.
For example, the reassessment order requires the county to earn the same amount of property tax revenue in 2013 as in 2012, known as "revenue neutrality." That requires Council to set a new millage rate based on the newly reassessed property values.
However, County Council Member Barbara Daly Danko said the first problem is that Council doesn't even know what the final revenue numbers will be from the current fiscal year.
"We're required to be revenue neutral, and we don't necessarily know exactly what the number's going to be on December 31, because we're doing a lot of refunds now based on appeals," said Danko. She said the new millage rate was based on Council's best estimate for final 2012 revenues.
Thousands of property assessment appeals still undecided
The matter is muddled further when one considers that the newly reassessed property values in Allegheny County are likely to change as more appeals are finalized in the beginning months of 2013. The millage rate of 4.73 is essentially Council's best guess as to what tax rate will bring in the same amount of money as 2012 once all the reassessment appeals are said and done.
Council could potentially tweak the millage rate during the course of the year if it seems too far off track, but Danko said she thinks that's a bad idea.
"Obviously, you don't want to shoot too high, but you don't want to shoot too low either," said Danko. "I think the best thing to do is hold it for the year. If we're way off, we could open it up, but it would take a two-thirds majority vote of Council to do that."
At the end of the year, if the property tax revenue is moderately too low or too high, Council probably would not be required to send refunds or adjust the millage again. Danko said she's not especially worried about court sanctions if the 4.73 millage rate winds up being slightly off target.
"[In] some things where you have to shoot for numbers, the courts uphold sort of a range of hitting the bullseye," said Danko. "I don't believe this has ever been tested for a range around hitting the bullseye around 'revenue neutral.' That could happen."