Pittsburgh schools proposes choice: on taxes

Pittsburgh schools proposes choice: on taxes

Pittsburgh taxpayers could be facing a triple whammy on their taxes this January.  The city’s portion of the deed transfer tax is set to increase 0.5 percent; today voters are deciding whether to add a special 0.5 mill for parks; and this morning it was announced that the Pittsburgh Public Schools (one of three districts that operates on a calendar year budget and also includes Mt. Oliver Borough) might increase school property tax millage from 9.84 mills to 10.07 mills. 

That would be within the district’s Act 1 index so it won’t trigger a referendum or require state permission through an exception.  It would be the first increase since 2014 when millage increased from 9.65 mills (2 percent). 

But the superintendent and the district’s financial officer say there might be another way.  That would involve ending the tax shift of 0.25 percent of the district’s portion of the wage tax to the city that was mandated under Act 187 of 2004.  That was put into place so that a city resident who would pay a 3 percent total wage tax (at the time, 1 percent to the city and 2 percent to the district) would not see an increase in the overall tax rate and the city would benefit by gaining revenue. 

The question will be did the General Assembly intend for the shift to be permanent (the law had a three-year shift, from 2007 to 2009, and says the 0.25 percent was for “2009 and thereafter”) or one that was a temporary measure while Pittsburgh was in Act 47 (that law changed in 2014 to place time limits on the duration of distress)? 

At stake is $18.2 million based on 2019 collections.  The district’s wage tax collections after that portion is shared with the city is budgeted at $129.8 million.  The city expects to finish 2019 with $102.8 million in wage taxes, which would be $84.6 million without the shift.  That would be something the city would have to make up or balance through spending reductions.