Thursday, January 20, 2011

Onorato's Last Stand On Property Tax

Dan Onorato is in his final year of office as Allegheny County Executive. He has stated that 1 of his top 3 goals in this final year is to stop court-ordered property tax reassessment. Gas drilling on airport land and increasing flight traffic round out the list. Securing funding for Port Authority didn't make the cut.

Allegheny County Council President is also begging the state to hold off on property tax reassessment.

Mr. Fitzgerald, D-Squirrel Hill, proposed a resolution that urges the Legislature to adopt a statewide moratorium on court-ordered reassessments and calls on new Gov. Tom Corbett, a Shaler homeowner, to support it.

So what are their arguments against reassessing?

1. Other counties don't have to reassess regularly, so why should Allegheny County? The State Supreme Court has come down in favor of regular reassessments as being the only fair method to calculate property tax. It's only a matter of time until fairness becomes the standard across the state. Why fight a losing battle? Why aren't our Legislators standing up and insisting that instead of a moratorium, the state forces regular reassessments for ALL counties? Then we wouldn't have to worry about unscrupulous folks fleeing the county for lower taxes, and we would be complying with the law.

2. Property re-assessments simply generate a windfall for local governments as property values overall tend to increase over time. Another bullshit argument. County Council member/scofflaw Chuck McCullough has introduced legislation to "soften the blow" of Property Tax reassessments by generating a "bill of rights" for property owners which would prevent egregious assessment appeals and phase in any tax increases. I say take it a step further and force municipalities to lower their millage rates to keep the total revenue stream consistent over time. It's very simple math.

3. And the most ridiculous?

As Mr. Onorato did last week, Mr. Fitzgerald said he doubted that a reassessment would bring tax relief to homeowners in struggling communities. If property values go down in a neighborhood, he said, a school district may have to raise millage to compensate.

Perhaps it's true that some struggling communities like Wilkinsburg and McKeesport wouldn't significantly benefit from a reassessment. But they also wouldn't be harmed! And more often you have struggling neighborhoods or corridors within a municipality, especially the city of Pittsburgh where the poorer neighborhoods of Homewood and Allentown (amongst many others) would clearly benefit over those more affluent neighborhoods such as the South Side and Squirrel Hill.

Why all this anger about property reassessments?

Because people who live in expensive houses in this county are being systematically under-taxed. Find me one house in Allegheny County that costs more than $200,000 and is being assessed for anywhere near its value, and I will be shocked. Yet every single house on the City of Pittsburgh chopping block is being sold at significantly less than its assessed value (often about 10% of its assessed value). All of these houses are in "struggling" neighborhoods. As a matter of disclosure, I am in the former group; though my house cost significantly less than $200,000, it has a street value of significantly more than my assessed value.

So why do I care?

Because the success of the city relies on the success of all its neighborhoods. As long as the status quo remains, then our poorer neighborhoods will continue their everlasting decline and the schism between the haves and the have-nots will only increase in the city creating more and more friction and violence. Let's put a halt to widening the schism based on unfair practices. Let's vote for people who stand up for equal rights even when their pocketbooks are on the line.

6 comments:

Jami said...

Wouldn't be harmed by a tax reassessment? my house is currently assessed at 1/3 of its value and I still pay $2,400 in taxes, living in Wilkinsburg. If my house was reassessed, it would not be worth me living here - $7,200 a year? For a house I paid $35,000 for? I would move. Out of Allegheny County.

Wilkinsburg has significantly higher taxes and if our properties were reassessed, the borough council would most likely reduce property taxes to keep people from foreclosing and moving elsewhere. Wilkinsburg already struggles with getting people to move here.

And that's probably what a lot of other communities would have to do. So what does the point end up being?

illyrias said...

That's exactly my point. In places like Wilkinsburg, you wouldn't have any benefit - though maybe it would give Wilkinsburg and others the impetus to join ranks with the city of Pittsburgh?
Everyone's taxes would go up, then Wilkinsburg would lower the mill rate to encourage people to stay and your taxes would end up staying about the same (though perhaps distributed slightly more fairly based on more current property values).

However, in municipalities which have a bigger mix of housing costs, you would see a very different result (especially the city of Pittsburgh). My house is worth more than yours yet I pay less than you in taxes??? Does that seem right? Everyone in my boat *knows* we're getting away with highway robbery at the expense of the "struggling" city neighborhoods, so when the day of reckoning finally comes, we won't have the righteous outrage to move.

Jami said...

ummm...I said that's probably what Wilkinsburg would have to do...but would they implement a new tax rate if forced to make reassessments? how long would that take? they would have to have meetings, paperwork, everything may be screwed up in the meantime. how much will that cost in tax dollars?

no, it doesn't seem right that you pay less than me in taxes, but it's because i live in a borough with a higher tax rate, not necessarily because your house hasn't been reassessed. i would definitely pay more in taxes on my property, as it's worth more than i paid for it, and would be assessed for more, whether or not the borough decided to drop the tax rate.

bottom line: this is not the time to be raising anyone's taxes. we should be encouraging people to move here, not move out. it makes no sense to raise taxes in Pittsburgh until it's wealthy enough to handle it, especially if it's not statewide.

Jami said...

Also, I agree with you that higher income earners should be taxed more -- but not through property taxes since about 95% of the people who it would affect are not wealthy to begin with.

rich10e said...

DannyO is foregoing a third term rather than do the necessary evil and raise property taxes.That'll fall on the shoulders of the next CE.

Bram Reichbaum said...

It's a good thing the IRS apparently has an easy time discovering how much people have earned in a given year; otherwise people would be demanding they be "assessed" for the amount of income they earned in 2001, since this is not the time to raise anyone's taxes and America needs to stay competitive.