Would a half a mill decrease in a property tax rate cause Allegheny County to march in front of a bankruptcy court a la Detroit? Probably not: after all, counties in Pennsylvania can’t file for bankruptcy because they don’t fall under Act 47 guidelines which apply only to municipalities and even if a county had serious fiscal issues approaching insolvency the state could still place as many restrictions on filing as they wanted to.
So it was probably hyperbole when the County Executive noted in an article last week that had the County set its 2013 millage at 4.23 mills as opposed to 4.73 mills (where it is to stay in 2014) that “this county government would be bankrupt”. Earlier in the year the Executive and the County Controller had a skirmish over the correct millage rate.
Based on the County’s certified values and their millage rates over the past three years (2011, 2012, and 2013) without counting any homestead exemptions, delinquent collections, refunds, etc. the revenue generated in those years was $282 million, $352 million, and $367 million. Net property taxes—what the County actually gets after it accounts for the homestead exemptions, collects delinquent taxes, and issues refunds—rose in those years (in millions) from $271.4 to $323.6 to $331.7. The 2014 amount is expected to be $335.5 million.
For the 2013 current levy, if the County used a 4.23 millage against the certified valuation ($74 billion as of September) the take would have been $314 million; about $37 million less than what would actually come in at the 4.73 millage. That’s about 5% of what the County plans on spending for its operating budget in 2014. And that would not have prevented the County from passing a tax increase in order to avoid the courtroom.
