Based on the certified County Assessment Roll for 2017, Allegheny County’s taxable value was $77.7 billion. That’s an increase of 1.4% over the 2016 certified amount. Since there was no reassessment conducted for 2017, changes in taxable value are the result of appeals, improvements, new construction, corrections to records, etc. We have written previously about the details of the County’s certified values since the 2013 reassessment (here and here).
The increase by municipality shows that for 2017 the big increases are concentrated in the western suburbs of the County, with Findlay (8.6%), Robinson (4.3%), and south Fayette (4%) seeing taxable value growth at the top. The northern suburbs of Marshall (5.6%) and Ohio (4%) rounded out the top five. Decreases in taxable value were concentrated in the eastern suburbs of Wilmerding (-15.7%), Rankin (-4.2%), and East Pittsburgh (-3.9%).
Since the 2007-08 school year, West Mifflin School District has been educating students from the City of Duquesne who would otherwise attend high school in Duquesne, were there still a high school there (a few years later, 7th and 8th graders joined in the arrangement). The terms of that deal were spelled out in state legislation, as was the payment arrangement for West Mifflin. After trying to resolve issues over funding via negotiation, West Mifflin filed a lawsuit in May of last year.
That lawsuit was decided yesterday by the Commonwealth Court. In short, the court stated that the proper place for a remedy is with the state Department of Education, not the courts. Though there were six counts alleged by West Mifflin, this blog will look at the argument over per-pupil reimbursement.
The law established that for a school district of the third class with a board of control that eliminated its high school, the Secretary of Education would “establish the per-pupil tuition rate that a school district…shall receive for each reassigned student in a regular or special education program”. From 2012-13 forward that rate was the greater of $10,000 or the product of the prior year tuition and the greater of the percentage increase in total budgeted revenues available to a distressed school district or the Act 1 index. In other words, the court opined, it is not Duquesne that is determining the payment, but the Secretary. West Mifflin, in this part of the lawsuit, argued that the Secretary did not follow the second part of the formula, “… using the greater of either Duquesne’s total budgeted revenue percentage increase or the Taxpayer Relief Act Index when calculating Duquesne’s tuition rates.” On this part, the courts pointed to the Administrative Agency Law as a remedy to challenge the tuition determination.
“West Mifflin’s real claim lies with the amount of tuition it receives for Duquesne students. This is a matter that must be addressed to the Secretary and, thus, Count I must be dismissed as to Duquesne” wrote the Court. So it appears that the next step for West Mifflin in this dispute is to take up the matter with the Department of Education.
A newspaper article this week includes quotes from the new chairs of the respective gaming committees in both chambers on the topics of Internet gaming and the casino host fee for counties and municipalities. The House majority chair gave his opinion that he feels it is doubtful Internet gaming will have any impact on the 2016-17 fiscal year (that concludes June 30th).
“It’s just not going to happen. I never thought it was going to happen when we approved the budget…I anticipate that we’re going to have a shortfall.” We wrote about slowing revenue last year.
There was a bit more bullishness on getting a casino host fee fix. According to the article the fact that places that do not host casinos wanting a share of host fee money may have been an issue. Perhaps there was/is a desire to make the host fee more like the Marcellus Shale Impact Fee, where counties with drilling activity receive money but all counties get an allocation.
Here in Pittsburgh the Rivers Casino came to a voluntary arrangement with Pittsburgh for $10 million and, according to a casino spokesman, a deal with Allegheny County for its host fee (about $5 million or so) is being worked out.
At this week’s board meeting directors of the Pittsburgh Public Schools received the findings of an evaluation completed by the Council of Great City Schools, which an article noted “…is likely the most comprehensive look at the district in recent history …”
In fact, the Council completed an evaluation of the District in 2006: the report can be found here, and our Policy Brief on the 2006 evaluation can be found here. A search of the Council’s website shows four studies on Pittsburgh in the last eleven years. It is also worth noting that the District received a report in 2013 as part of a “large scale visioning process”.
What does the Council’s 2017 report show? At 175 pages there is a lot in there, but it should come as no surprise that the district’s enrollment is smaller (24,190) then it was in the 2006 report (35,146). However, the District’s enrollment fell at a greater rate than the state (31% vs 5%) based on the 2006 Council data. The pupil to teacher ratio is about the same, 14 students per teacher, as it was in 2006 (13). There is plenty of data about academic performance, benchmarked against the state and against other districts the Council analyzes.
So will this be the report that the District utilizes going forward? Maybe, but was that not the case with previous reports as well?
With lightning speed following the seating of the new Republican controlled legislature, Kentucky has become the 27th state to enact Right to Work legislation. The Governor signed the bill on January 7. Missouri could be close behind.
Not only did Kentucky pass Right to Work—which means no worker can be forced to pay union dues as a condition of employment—the legislature as also eliminated the right of public employees to strike. And it is considering repeal of the Commonwealth’s prevailing wage law. If it does it will have carried out the trifecta the Allegheny Institute has called for in Pennsylvania for many years.
Prevailing wages and the right of public sector employees to strike, especially teachers and transit workers is an affront to good governance, Madisonian foundational principles of a self- governing people, and the public weal.
Michigan, Wisconsin, Kentucky, Indiana and soon Missouri are showing the way back to economics as determined by market forces of supply and demand, entrepreneurship and liberty and away from government interference and distortions. There will be hue and cry from the unions’ aggrieved membership but their intransigence has produced slow growth, job losses and overbearing government for far too long to warrant getting their way any further.
Kentucky marks the fifth state in just over four years to adopt Right to Work. Maybe Pennsylvania will see the light and get there in the next four.
We are currently working on our latest installment of analysis on the 300 or so local pension plans in Allegheny County (see previous reports here). Overall, not much change in the plans, the data on which are collected and submitted to the Auditor General’s office, a change due to state legislation passed last year. Our analysis adds in five other pension plans in the County (the County’s plan, and four with the Port Authority).
In all (reflecting 2014 data) there were 304 plans in the County, with 80% the defined benefit type, and the remainder as non-defined benefit plans. This has changed ever so slightly from our first report in 2011 when the division was 82%/18%.
In terms of financial distress, only one plan (Clairton’s police plan) was at a level of severe distress (18% funded when dividing assets by liabilities). However, Clairton’s fire and non-uniformed plans are in better shape (114% and 77%) and thus, in the Act 44 schematic where municipalities (not plans) are ranked on distress level, Clairton is minimally distressed. 285 of the 304 plans were at a level of no distress or minimal distress.
A news article pointed out that the push to do away with school property taxes by shifting the burden to higher personal income and sales (and an expanded sales base) may be returning to consideration by the General Assembly. According to the legislation’s sponsor the change in composition in the membership of the Senate provides optimism that the proposal could pass.
In 2014 we wrote about two different proposals to eliminate/reduce school property taxes, with the Property Tax Independence Act being much closer to what has moved forward since then. A year later we examined the then-newly elected Governor’s plan to advance a tax shift and how that would impact a taxpayer in one of three Allegheny County school districts. Last year we noted how difficult it would be to allocated the money back to the state’s districts if a state-local revenue swap were enacted.
We will monitor and evaluate plans as they develop in the coming legislative session.
Scranton recently completed the sale of its sanitary sewer system to a water company, hoping to put the proceeds toward its lingering financial problems, including its severely distressed pensions. That is akin to the City of Pittsburgh’s 1995 sale of its water system to an independent authority and its planned 2010 sale/lease of its parking assets to a private operator to fund its pension plans.
Scranton’s policymakers are surprised that they fetched less than anticipated from the system’s sale. Members of Council are alternating between debt and pensions as a place to put the proceeds. In 2010 the Pittsburgh plan would have retired the Parking Authority’s debt (and presumably shuttered the operation) and then placed the remaining proceeds into the pension fund, which was threatened with a state takeover. Given Scranton’s seeming flexibility on where to put the money it looks as though a debate is shaping up.
In 2010 we wrote a report on the City of Johnstown in Cambria County, a municipality that was in the fiscally distressed Act 47 program. That year, the City had gone through a series of layoffs in various areas and enacted a sizeable property tax increase.
The City approved its 6th amended recovery plan in 2013 and that plan pointed out that the City had seen a net decrease of 16 employees between 2010 and 2013. Over a longer term, the plan noted “… the City has gone from a complement of over 209 employees in 2003 to 149 at January 1, 2013. This is a 28.7% reduction in staffing over a 10 year period”.
This past week Johnstown’s Council approved its 2017 budget without a tax increase and slightly lower than 2016’s budget. Based on figures from the recovery plan, spending since 2013 has increased around 1.5% per year in the general fund.
The City is now functioning under the initiatives recommended by the amended plan and would be subject to the changes made to Act 47 by the General Assembly in 2014.
Following the first reassessment since the 1980s, Washington County’s board of commissioners have established the County’s 2017 tax rate of 2.43 mills. That millage is based on taxing property at 100 percent of its 2015 value, rather than at 25 percent of its 1981 value, and adjusts the County’s rate from 24.9 mills.
As we pointed out earlier, moving Washington County’s value to a 100 percent pre-determined ratio (meaning a property is assessed at market value, not a fraction of it) and having a recent year of assessment provides an almost apples-to-apples comparison of taxes at the county, municipal, and school district level for Allegheny County and one of its border counties–something that is a rarity due to old assessment years and different PDR. Further flung counties in the state are of a more recent assessment year like Allegheny County, but none a border county.
With the new county tax rate, a home assessed at $100,000 would pay $243 in county taxes. In Allegheny County, assuming the home qualifies for the County’s homestead exemption ($18,000 deducted from assessed value) the Allegheny County property tax bill would be $387 ($82k x 4.73 mills), or $144 more. Similar comparisons can be done at the municipal level, and, later in 2017, for school taxes as districts in Washington establish their millage rates for the 2017-18 school year upon the reassessed values.