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Council wants to avoid property tax hike in new financial plan

Bob Bauder
| Wednesday, June 18, 2014, 5:18 p.m.

Pittsburgh City Council on Wednesday gave initial approval to a five-year financial plan that recommends a property tax increase, but said council would work to avoid raising taxes for 2015.

Pittsburgh's state-appointed Act 47 coordinators — Dean Kaplan and James Roberts — recommended a real estate tax increase and a host of other revenue-raising initiatives in the plan they designed as a final solution to the city's money woes.

But council members, who approved it 7-0 with two abstentions, said the recommendations are not binding. Council is expected to approve the plan next week.

“It's a box you have to stay within, but if we can swap out option A with option B and still stay within the box, that's something we can work with Act 47 on,” said Councilman Dan Gilman.

Council and Mayor Bill Peduto oppose raising taxes and say they hope to offset the loss of about $7 million in tax revenue from last year's decrease from 10.8 mills to 7.56 mills through cost-cutting and new revenue.

“We much prefer to come out with a deal with large nonprofits in the city,” said Peduto's Chief of Staff Kevin Acklin. “We feel there is an opportunity to have an additional contribution to support the city in lieu of taxes rather than passing that off on residents.”

The plan calls for the city to increase funding for employee pensions and recommends $100 million in borrowing for capital improvements.

Council approved plan amendments on Wednesday that they hope will increase revenue.

Amendments call on the city to accept credit cards for purchase of services, promote rentals of recreation facilities and expand a program of fluctuating parking rates.

Councilman Corey O'Connor of Squirrel Hill said the city should see increased rentals of park pavilions and athletic fields if it does a better job of advertising facilities that are available.

He said a pilot program Carnegie Mellon University established increased parking sales around the campus and Phipps Conservatory in Schenley Park. Parking rates fluctuate throughout the day, inducing more people to park in the spaces, he said.

“Because there's more volume, we generate more revenue,” he said, adding that he wants to expand the program.

Council has until June 30 to vote on the Act 47 plan, but will not address spending cuts and the tax increase until it begins working on a 2015 budget, Councilman R. Daniel Lavelle said.

“That's when council will have to make the hard decisions,” he said.

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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