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Allegheny County Council proposes smaller 2025 tax hike as budget deadline approaches

The downtown Pittsburgh skyline on a sunny, clear summer day.
Keith Srakocic
/
AP

Allegheny County Council members presented a budget counterproposal Tuesday that calls for a lower property tax hike, and envisions about $70 million less in spending than was laid out in the plan County Executive Sara Innamorato presented last month.

“The job of council is to look out for our taxpayers,” said County Councilor Suzanne Filiaggi.

The new plan appears to have taken shape quickly: Councilor John Palmiere introduced amendments that some councilors said they hadn’t seen before, leaving them with little time to understand the proposal before voting on it.

The plan would raise the county millage rate to about 6.08 mills — 1.35 mills more than residents currently pay. That’s a step down from the 2.2 mill increase proposed by Innamorato.

Filiaggi acknowledged that the 1.35 mills is a “compromise number” that “doesn’t solve everything.” But she noted that even with council’s reductions, the proposal does represent an increase in spending over last year.

Council’s proposal would also keep the homestead exemption at $18,000. Innamorato had proposed a more generous exemption, one that left the first $21,000 of a home’s assessed untaxed. Innamorato argued that would take some of the sting out of a tax increase, especially for lower income households. The homestead exemption has not changed since 2013.

Under council’s plan, the owner of a home assessed at the county’s median value, $110,400, would pay about $562 in property taxes each year, or roughly $10 more each month than they currently pay.

Under Innamorato’s proposal, the same homeowner would pay about $15 more each month after taking the increased homestead exemption.

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Of the $70 million in spending reductions that council envisions, the largest share — about $28 million — would be taken from Innamorato’s plan to replenish the county’s “rainy day” fund. The county has drawn on the fund to make up for deficits in prior years: Innamorato’s budget calls for paying $33 million back into it: Council suggests using just $5 million for that purpose.

Under council’s plan, the Department of Human Services would also see a much more modest investment than Innamorato sought. The executive’s budget had hoped to increase the budget by more than $46 million, while the council budget increases funding by only half that much. But the savings to county taxpayers would be much less than that, since Human Services relies on state and federal funding which matches local dollars. That money – about $4 for every $1 the county contributes – would be left on the table.

Councilor Dan Grzybek, a supporter of Innamorato’s plan, said cutting the human services budget was short-sighted, since the amount the county saved would be far less than it would give up in outside funding.

“If I had the opportunity to access an over 400% 401k match from my employer and I wasn't choosing to take advantage of that, I would be an idiot,” Grzybek said. “And I think our budget reflects the same.”

But supporters said the smaller millage increase will be more palatable to taxpayers, and that the council proposal refrained from layoffs or cutting core county services.

“The bottom line is every department's getting more money at this point in time. If someone told me that I was getting more money for something, I'd be very happy,” said Council President Pat Catena.

“Will we have to increase taxes next year?” asked Councilor Nick Futules during a tense and at times confrontational meeting of the budget and finance committee. “Maybe. Maybe not. But [council’s proposal is] going to give us time in the year 2025 to look at this budget diligently to see where we can save money.”

In recent weeks, residents and social services providers have urged council to pass Innamorato’s budget, citing the need for additional local support. COVID-pandemic-era federal funds once used to fund some programs are drying up, and regular federal support for states and counties is expected to drop after President-elect Donald Trump enters office next year.

Innamorato has repeatedly argued that such an increase is necessary to fully fund county services, and that making investments in social services and economic development could pay off in the future.

In a letter to council earlier this month, County Manager John Fournier said an increase of only 1 mill would have “catastrophic” effects and require severe cuts.

Some council members echoed that concern Tuesday, saying that the difference between the administration’s worst-case scenario and council’s proposal is negligible.

As the price of doing county business continues to rise due to inflation and soaring service and personnel costs, even a $70 million increase in funding isn’t enough, council member Jack Betkowski argued.

“The bottom line is there's just no free lunch. You don't get something for nothing,” he said.

Innamorato spokesperson Abigail Gardner says the administration plans to review the budget amendments passed by the committee Tuesday.

“While we believe the Council-proposed 1.35 mill increase is going to fall short of what the County ultimately needs, we will work hard to negotiate with Council leadership in hopes of finding agreement on a budget that will deliver core services, critical programs, and avoid layoffs," Gardner said in a statement.

It’s currently unclear if council’s plan has the two-thirds supermajority of support required by the Home Rule Charter to approve any change to real estate tax rates. And there were complaints that councilors were being given too little time to consider such steps.

Betkowski denounced as “irresponsible” the choice to waive a rule that requires council members have at least 48 hours to read a bill before discussing it. He added that the tight timeline made it difficult for county budget experts to weigh in on the proposal.

But the deadline for council and the executive to pass a budget is fast approaching. The county’s home rule charter requires annual operating and capital budgets for the next calendar year to be adopted no later than Dec. 6.

Several experts said that the consequences of bypassing the cutoff aren’t unclear. Allegheny County hasn’t missed the deadline since the charter went into effect a quarter-century ago. Neither the charter nor the county’s administrative code spell out the consequences for failing to meet the deadline, and since the new budget doesn’t go into effect until January, there might be little immediate impact.

Still, some officials warned that failing to pass a budget could put the county in a “legal gray zone” and make it vulnerable to lawsuits. And the county solicitor’s office is reviewing its options.

For the time being, Council is expected to vote on the proposal at its last regularly scheduled meeting of the year, Dec. 3.

Julia Zenkevich reports on Allegheny County government for 90.5 WESA. She first joined the station as a production assistant on The Confluence, and more recently served as a fill-in producer for The Confluence and Morning Edition. She’s a life-long Pittsburgher, and attended the University of Pittsburgh. She can be reached at jzenkevich@wesa.fm.