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Mayor proposes 30 percent tax rate decrease because of reassessment

| Monday, Jan. 14, 2013, 1:24 p.m.

About half of Pittsburgh property owners could get a reduction in their real estate tax or a steady tax bill this year under a plan that Mayor Luke Ravenstahl announced Monday.

He also announced a review of nonprofits that don't pay property taxes.

Because the court-ordered countywide reassessment increased overall values by nearly 49 percent, Ravenstahl will ask City Council to cut the tax rate from 10.8 to 7.65 mills and increase the homestead exemption and a discount for low-income seniors. The move follows state law that keeps communities from getting a windfall during reassessments.

“We're doing our best to make sure homeowners are not being impacted by this,” said Ravenstahl, an opponent of the reassessment.

Allegheny County in December decreased its millage from 5.69 to 4.73 mills. Ebony Pugh, a spokeswoman for Pittsburgh Public Schools, said the district might announce its new millage rate this week.

Pittsburgh Finance Director Scott Kunka estimated that 30 to 40 percent of city property owners would get a tax decrease under Ravenstahl's proposal. He said taxes for 10 to 12 percent could be unchanged. He said he would have more definitive numbers after about $2 billion in outstanding assessment appeals are settled.

The tax bill on a home with an assessed value of $100,000 would drop from $1,080 to $756 under the new millage rate, Ravenstahl said.

He proposed increasing the homestead exemption from $10,000 to $15,000 and the Senior Tax Relief Credit from 30 percent to 40 percent of a property's assessed value. The credit applies to people age 54 or older with a household income of less than $30,000.

City Controller Michael Lamb, a likely mayoral candidate who called for a homestead exemption increase in September, said he needed more information before commenting on the millage rate.

“We should increase the homestead exemption, so I'm glad that they did that,” he said.

Council President Darlene Harris of Spring Hill and Councilman Ricky Burgess of North Point Breeze said they support the mayor's plan because it benefits seniors and lower-income residents.

Ravenstahl said the city would examine large nonprofits, including UPMC, hospitals and universities, to see if they meet legal requirements for tax exemption. If they don't, Pittsburgh will challenge the exemptions in court.

The county is undertaking a review of all nonprofits, but Ravenstahl said the city's examination would be separate and more limited.

The city has been trying to extract more money from nonprofits for years, saying about 40 percent of city property owned by government entities and charities is tax-exempt.

Dana Yealy, chairman of the Intergovernmental Cooperation Authority, one of Pittsburgh's two state-appointed financial overseers, said he prefers to avoid confrontational methods such as court challenges for nonprofits.

The Pittsburgh Public Service Fund, an umbrella group representing city nonprofits, declined comment, as did the University of Pittsburgh and West Penn Allegheny Health System.

UPMC spokeswoman Susan Manko said the hospital system pays real estate taxes on 49 percent of its property. Hospital campuses, which are “unquestionably tax exempt” by law, make up the remaining 51 percent, she said. She added that UPMC last year provided nearly $250 million in charity care for which taxpayers otherwise would have paid.

The reassessment increased the city's total property value from $13.6 billion to $20.2 billion. After taking out tax-exempt properties, the city is calculating taxes on $16.9 billion in assessed value, he said.

Tax bills will go out next month.

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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