Reassessment poses a tax challenge for McKeesport
With the discount period for real estate taxes coming to a close, McKeesport officials want residents to understand apparent changes to their property tax bills.
“We did not raise taxes in McKeesport,” Mayor Michael Cherepko said, noting that council members and city hall employees have been questioned by residents who have higher bills in 2013. “The biggest misunderstanding is that, because residents receive a city tax bill, some people are under the impression that we raised taxes, but in fact, Allegheny County has been going through a reassessment process for several years.”
When municipalities set their real estate tax rates for 2013, they were to factor in reassessed property values that went into effect this year.
Several communities decreased their tax rates to stay within a 5 percent windfall that state law allows in the year after a reassessment. On the county level, that caution prompted Allegheny County Council to approve a budget that lowered its taxes from 5.69 to 4.73 mills, a fraction more than the 2011 rate of 4.69 mills.
During last week's council meeting, president Darryl Segina asked when McKeesport's millage rate was going to be set, because he had fielded calls from concerned residents.
Solicitor J. Jason Elash explained the millage rate was held at 4.26 mills on buildings and 16.5 mills on land when council adopted the city's 2013 budget in November, clarifying that residents may have been asking if the city is prepared to revise its millage based on new assessments.
“Can you give me an update on the millage itself and where we stand with where we are going to locate our millage,” Segina asked.
City officials explained that property tax bills were mailed early in the calendar year, because the city's tight budget of $17.9 million depends on early tax revenue.
“There's not a lot a city like McKeesport can do,” Elash said. “You can't afford to operate without tax revenue.”
Council could not postpone approving the city's millage rate, because that would have prevented bills from being distributed. With the bills sent out and some already paid, the city will have to back-track if the 5 percent windfall is exceeded.
“The adjustment will be made once all of the appeals are filed within the city,” Cherepko said. “We want to make sure that we are not short-changed, and all of the residents will be made whole in one way, shape or form once we adjust the millage before the end of the year.”
Real estate taxes are due at a discount by April 15, at face value on June 17 or at a penalty rate later in the year.
Councilman A.J. Tedesco asked if residents who pay their bill before the millage rate is revised would be entitled to refunds. Cherepko said there are several options to resolve overpayment, including a credit on 2014 tax bills.
“We have an overwhelming amount of appeals, and the appeals are winning for the most part,” Cherepko said. “The (assessments) are being dropped by a significant amount of money.”
The deadline for appeals was listed on the Allegheny County website as April 1.
“From my understanding, they're not even close to being done with the appeal process,” Elash said.
Cherepko said assessed property values seem to be inaccurate, prompting a high volume of appeals.
“There's no consistency,” he said. “You can have three or four vacant lots in a row, with one assessed at $1,500 and another assessed at $10,000. It's just not right.”
Tedesco agreed the assessment process is flawed — something he illustrated by describing two houses in his neighborhood.
“I have a house that's been abandoned for 20 years across the street from me. They have it assessed at $15,000,” he said. “One house up from me was sold for $40,000. They have that assessed at less than the abandoned house.”
Jennifer R. Vertullo is a staff writer for Trib Total Media. She can be reached at 412-664-9161, ext. 1956, or firstname.lastname@example.org.