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Plum Council considers slashing tax rate to counter assessments

| Wednesday, Jan. 23, 2013, 12:03 a.m.

Plum Council is eyeing a property tax rate decrease.

Plum Manager Michael Thomas said council members in a few months are expected to vote on lowering the borough tax rate from 4.3 — the current rate — to about 3.7.

A mill in Plum generates about $1.2 million.

Thomas said the proposed move is a result of the county property reassessment process. Under state law, taxing bodies cannot reap more than an additional 5 percent in revenue as a result of reassessments and must adjust tax rates accordingly. Thomas said property values overall in Plum increased 20 percent as a result of the reassessments.

“Municipalities are not permitted to achieve a windfall,” Thomas said. “As a result, the borough will reduce the tax millage (rate) by about 20 percent.”

Thomas said the exact amount of the proposed tax rate decrease will depend upon the outcome of assessment appeals currently under way at the county. He expects a council vote on lowering the tax rate in April or May just prior to tax bills being mailed to property owners.

The manager said a property owner whose home is assessed at $150,000 pays $645 a year in borough taxes. Thomas said if the property owner's assessment remains at $150,000, the lowered tax rate would result in a borough tax bill of $525 or a $120 savings.

A 20 percent assessment increase would result in no increase in borough taxes for most property owners, Thomas said. A 50 percent assessment increase on a $150,000 home would result in borough taxes increasing about $140, Thomas said.

“Some people will see nothing (increase or decrease in borough taxes), some will see a tax increase, and some will see a tax decrease,” Thomas said.

Borough council in December voted to approve the 2013 budget of $11 million that did not raise taxes and kept the millage at 4.3.

Council President Mike Doyle praised borough staff members for working to pare down the budget that initially contained a $1 million deficit.

Doyle also said some property owners have expressed concerns that their borough taxes will increase significantly.

“I have a heard a few things including that council is gouging taxpayers in the borough (as a result of the reassessments),” Doyle said.

“If someone tells you we are gouging taxpayers because of the property assessments, tell them I called them a liar.”

The Plum School Board has not made any decision with respect to the property reassessment situation and the tax rate, board member Sal Colella said. The board typically votes on its annual budget in June.

“We are doing our budget, and we will look at it,” Colella said.

Karen Zapf is a staff writer for Trib Total Media. She can be reached at 412-856-7400, ext. 8753, or kzapf@tribweb.com.

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