Allegheny County’s Local Economic Revitalization Tax Assistance (LERTA) program was created with a worthy goal: to encourage investment in deteriorating properties by temporarily reducing the tax burden on new construction and major improvements.

In theory, the LERTA program helps spur development where it wouldn’t otherwise occur, revitalizing communities that have historically not received adequate investment. In practice, however, the program has drifted from its intent, too often subsidizing development that would happen anyway, while depriving municipalities and school districts of much needed revenue.

At its core, the problem is a lack of scrutiny. In recent history, tax abatements have been granted almost by default, so long as the developer met the minimum requirements of the LERTA program. Take the most recent LERTA passed by Allegheny County Council, for example. The property in question is in Central Oakland on McKee Place, hardly an area that requires additional incentive for development.

Furthermore, the property was previously home to townhomes which, despite perhaps meeting the legal definition, would not meet any reasonable description of deteriorated. The new 11-story, 227,000-square-foot, 159-unit apartment building that is being built in their place is a welcome addition to a neighborhood in which additional housing stock is desperately needed. However, a development in such a sought-after area, especially one that is already well underway, is not one that should be subsidized by taxpayers.

The tax increases by the county last year and the City of Pittsburgh this year were both widely publicized. What has been given less attention is the similar difficulties that suburban municipalities and school districts across the county have faced, with 28 of 42 school districts raising their millage rates this past year.

These budget difficulties aren’t unique to Allegheny County, either, with Fayette and Westmoreland counties recently passing 25% and 32.5% tax increases, respectively. The recent federal funding cuts and 135-day delay in delivering a state budget have only served to exacerbate the difficulties that local governments have been facing with rapid inflation, aging infrastructure and cessation of covid funding.

Given these difficult economic headwinds, it is all the more crucial that local governments take advantage of every dollar possible to ensure that critical functions like our courts, emergency services and public works are appropriately funded. Failing to do so will result in one of two outcomes: Our residents will be forced to bear an ever-increasing share of the tax burden, or our government programs will no longer meet the standard that our residents rely on.

Reforming doesn’t mean eliminating the LERTA program altogether. When used carefully, targeted tax abatements can be a powerful tool that incentivizes development, expands economic activity and increases long-term tax revenue, but they must be tied to outcomes, not assumptions. Allegheny County should move toward a more selective, data-driven approach that answers a basic question before granting any abatement: Would this project happen without public assistance? If the answer is yes, we are just giving more profit to developers at the expense of county taxpayers.

Dan Grzybek (District 5) and Jordan Botta (District 13) are Allegheny County Council members.

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