Pittsburgh City Council on Monday introduced four bills related to 2015 property taxes, one of which would raise the tax rate by 0.5 mills to 8.06 mills.
That means the city will collect an additional 50 cents for every $1,000 a piece of real estate is worth.
“For a home worth $100,000, it’s about $40/year,” said Kevin Acklin, chief of staff to Mayor Bill Peduto.
If that math seems off, it’s because of the Homestead Exemption program, which allows homeowners to reduce the taxable value of their home by $15,000. A $100,000 home would be taxed as if it was worth $85,000, resulting in each mill of taxation actually bringing 85 cents, rather than one dollar, into the city.
“We think it’s something, and we hope that Council will agree with us, that is necessary to restore that income stream to the city that was cut in the past,” Acklin said.
Acklin is referring to the decrease in the rate under former Mayor Luke Ravenstahl, from 10.81 mills to 7.56 mills. The 2013 cut was meant to be revenue neutral in the wake of property value reassessments, but an expectation of higher property values led to a $6.7 million shortfall in actual revenue compared to projected revenue.
“This is really a restoration of the property tax cut that was done before all of the reassessment numbers came in, so it’s a correction that’s necessary,” Acklin said. “We’re presently collecting less in real estate taxes than we were 10 years ago.”
City Council President Bruce Kraus said they voted to hold a public hearing before moving forward with the legislation. A date for the public hearing has not yet been set.
“I always like to wait to have a full discussion so that I’m making an informed decision, but what I know about the bill so far, and in discussions with the Mayor, I do believe that I will ultimately support (it),” Kraus said.
If approved, the millage hike is expected to produce an addition $4.5 million in property tax revenue for the city.