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Pittsburgh won't cut tax rate — yet

| Thursday, Jan. 17, 2002, 12:00 p.m.

Despite stories of residents with inexplicably higher property tax assessments in 2002, Murphy administration officials said Wednesday that Pittsburgh falls within the state cap for increased revenue — and may end up with less tax money than projected.

Mayor Tom Murphy is afraid that appeals on the newest round of assessments — only now appearing in homeowners' mailboxes — will be so numerous that the city might have to give back much of the windfall that the revaluation could generate.

"You can't spend that money if in effect you're going to have to give it back," Murphy said. "So to rush to cut taxes right now — without understanding where the increases are or how many appeals we're going to have — is really not a responsible way to manage government."

Murphy said he would probably appeal the assessment on his own house. The mayor's property was assessed at $89,000 last year, but he won a reduction to $45,000. The county raised the value back to $70,000 this year.

Allegheny County Executive Jim Roddey said he would talk with Murphy about "things we can do" regarding property taxes but added that he would refrain from getting involved in a political debate.

"The problem with the assessment process is that, for the last 20 years, it has been politicized," Roddey said. "Politicians love to jump in, and that's why assessments have been such a mess. We've had political interference for too long. There are plenty of people out there making all sorts of statements about things, and I am not going to get involved."

City Council members discussed property tax assessments yesterday with representatives of the county and the Pittsburgh Public Schools. The council voted to create a panel to study reducing or eliminating property taxes in Pittsburgh.

Deputy Mayor Tom Cox said the administration will have its financial advisory panel in place by the end of the month. Murphy has said he wants the group to look at the city's overall financial picture and consider ways to replace property taxes.

Under the new assessments, raw property values throughout Pittsburgh rose more than $1.3 billion. That number does not account for exempted properties, tax discounts or thousands of pending appeals, Finance Director Ellen McLean told council members.

The city might owe more than $10 million on appeals this year and still owes $3.2 million on appeals from last year, according to the Finance Department's estimates.

Under that scenario, the city would generate $123.9 million from property taxes this year — nearly $2 million less than originally projected. McLean said the administration would not propose changing the 10.8-mill tax rate.

After hearing those estimates, council members quickly backed off earlier demands to cut the property tax rate. Under state law, no local government can get a windfall of more than 5 percent from a reassessment. McLean said the city will be well within that limit.

McLean said the city will start to mail its tax bills.

"The problem is in the assessments themselves, not in the billing," she said.Despite stories of residents with inexplicably higher property tax assessments in 2002, Murphy administration officials said Wednesday that Pittsburgh falls within the state cap for increased revenue — and may end up with less tax money than projected.

Mayor Tom Murphy is afraid that appeals on the newest round of assessments — only now appearing in homeowners' mailboxes — will be so numerous that the city might have to give back much of the windfall that the revaluation could generate.

"You can't spend that money if in effect you're going to have to give it back," Murphy said. "So to rush to cut taxes right now — without understanding where the increases are or how many appeals we're going to have — is really not a responsible way to manage government."

Murphy said he would probably appeal the assessment on his own house. The mayor's property was assessed at $89,000 last year, but he won a reduction to $45,000. The county raised the value back to $70,000 this year.

Allegheny County Executive Jim Roddey said he would talk with Murphy about "things we can do" regarding property taxes but added that he would refrain from getting involved in a political debate.

"The problem with the assessment process is that, for the last 20 years, it has been politicized," Roddey said. "Politicians love to jump in, and that's why assessments have been such a mess. We've had political interference for too long. There are plenty of people out there making all sorts of statements about things, and I am not going to get involved."

City Council members discussed property tax assessments yesterday with representatives of the county and the Pittsburgh Public Schools. The council voted to create a panel to study reducing or eliminating property taxes in Pittsburgh.

Deputy Mayor Tom Cox said the administration will have its financial advisory panel in place by the end of the month. Murphy has said he wants the group to look at the city's overall financial picture and consider ways to replace property taxes.

Under the new assessments, raw property values throughout Pittsburgh rose more than $1.3 billion. That number does not account for exempted properties, tax discounts or thousands of pending appeals, Finance Director Ellen McLean told council members.

The city might owe more than $10 million on appeals this year and still owes $3.2 million on appeals from last year, according to the Finance Department's estimates.

Under that scenario, the city would generate $123.9 million from property taxes this year — nearly $2 million less than originally projected. McLean said the administration would not propose changing the 10.8-mill tax rate.

After hearing those estimates, council members quickly backed off earlier demands to cut the property tax rate. Under state law, no local government can get a windfall of more than 5 percent from a reassessment. McLean said the city will be well within that limit.

McLean said the city will start to mail its tax bills.

"The problem is in the assessments themselves, not in the billing," she said.

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