Analyzing Penn Hills’ Proposed Tax Increase
Preliminary indications from the Penn Hills School District is that taxpayers will be facing a school tax hike for 2016-17, the degree of which is not yet known. Since school districts are operating in the Act 1 era, where districts are annually given a tax increase cap/ceiling and hikes over that cap/ceiling either head to the Department of Education for an exception (common) or to the voters for an up or down vote (rare) and there is homestead school property tax relief via casino gaming funds, which for 2015-16 was estimated by the state to be $191 per homestead in the Penn Hills School District. This amount has stayed relatively flat since the first year gaming funds for homestead relief was made available (2008-09) when the estimated homestead relief was $189.
That year was also the year when the school district increased millage by 6% (millage rose from 23.39 to 24.81. Following the 2013 Allegheny County reassessment, when the district set millage at 23.47, millage went up in 2014-15 and 2015-16 to where it currently sits at 24.8. According to the article, the median value of a home in Penn Hills is $68,000. Assuming a home with at that value is assessed fully at $68,000, and, assuming for whatever reason the home does not qualify for a homestead exemption (let’s assume that it is a single family home that is rented out, thus making it something other than a primary place of residence) that home is paying $1,686 in school taxes (based on 24.8 mills) and that would rise to $1,788 if the millage went to 26.3.
But if a homestead in Penn Hills qualifies for the gaming relief (which lowers the assessed value that the property is taxed upon; it does not cut the millage) that median value home would be assessed at $60,322 (based on taking what the home would pay at $68k, lowering that by the estimated relief, and then backing that out based on the millage) and would be paying $1,496 to the school district this year. Taxes on that homestead, assuming gaming relief remains about the same, would rise $90 at 26.3 mills.
Since 2013’s reassessment, if the median value home was taking homestead relief for school taxes every year the school tax bill in Penn Hills will have risen $171 if the 2016-17 millage hike takes effect (from 23.47 mills to 26.3 mills).