- The budgets for all funds are balanced using a combination of ongoing revenue sources and available reserves.
- The budget assumes a property re-assessment that will result in an increase of 5 percent over real estate revenue received in 2012. Because of the reassessment and “anti-windfall” legislation, we expect that the millage will actually decrease from 5.43 mills to 4.4 – 4.89 mills, depending on the results of appeals.
- There is no increase proposed in the earned income tax rate or deed transfer tax rate.
- There are also no proposed changes to the sanitary sewer fee or stormwater fee.
Thursday, November 1, 2012
The 2013 Manager's Recommended Budget is now online
The 2013 Manager's Recommended Budget has been posted online here. The good news is that:
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52 comments:
The reduction in millage being "good news" needs to be taken with a great deal of qualification. Those homeowners faced with a large increase in their 2013 assessment will still be paying more than they did in 2012. In my own case 28% more, assuming the millage is reduced to 4.89 mills. Of course, if I lived in one of those nice Virginia Manor cottages I could expect a tidy savings.
An article in The Almanac shows that Upper St. Clair Township commissioners will hold a public hearing Nov. 5 on a proposed $18.8 million budget for 2013 which lowers the real estate tax rate from 4.6 mills to 3.9 mills due to the Allegheny County reassessments.
Too bad the district won't go after those underassesed homes in VA Manor, RG. Our millage could be more in line with USC's if they did.
Elaine
*under assessed.
Elaine
A lot of very loud residents in VA Manor are asking for turf and facilities. The problem is that everyone else has to eat the bill!
EG:
A lot of people are complaining about how "unfair" the 2013 assessments are, and how they favor the so-called "rich" in Mt. Lebanon. Within the context of the assessment system they are correct. But people should be squawking about the residential real estate tax itself. It is an archaic, arbitrary, and complicated system that needs to go. Real estate taxes are paid out of INCOME. Those with high incomes pay a lower RATE of real estate tax, on average, in Mt. Lebanon.
Although I have some issues with it, I would rather pay a higher EIT and eliminate the real estate tax; those with high incomes will pay more, and those with lower incomes will pay less (which is probably why it would not be popular in the "power circles"). But a straight percentage applied to incomes in unquestionably more fair than the current voodoo system we have now.
137 Hoodridge is for sale for $1,100,000, the assessed value is about 1/2 the sales price. Why are we paying half of Walton's taxes?
46 Hoodridge is now for sale at $1,650,000 with a 2013 assessed value of $575,000 or so.
Great idea Elaine! Raise the EIT and eliminate the property tax. I like that.
Ditto on EIT and property tax!
ditto 10:07
double ditto!
Speaking of folks with doe to burn, lookie here -
http://www.eckertseamans.com/content.aspx?ContentID=17&View=Detail&ReleaseID=508
OMG! Maybe he can just donate the turf to the community?
Holy Jesu-! How much does he make?
Whomever orders the turf gets the bill! I'm with you Elaine! Raise the EIT!
You'd think selling the naming rights to the high school stadium or wildcat/middle field would be a cake walk.
A couple of things. Raising the EIT is not my idea.
This isn't about Dave Franklin.
Elaine
Dave Franklin's compensation is nobody business, agreed.
It would be great if he could lend his considerable expertise in finding some concern to buy naming rights on any of the facilities.
Has he, does he want to, again is his business, not ours.
I suspect and believe PK found there isn't as much value for some firm to attach their name to these facilities as some parties would have people believe.
There is an alternative to the EIT. The proposal to pay for schools through an increased sales. Though that is scary since centralizes control in Harrisburg rather than locally.
The Mt. Lebanon website has a comparison chart for 2012 millage rates and EIT rates.
http://www.mtlebanon.org/index.aspx?NID=254
Elaine
Should read-- "There is an alternative to the EIT. The proposal to pay for schools through an increased sales 'tax'."
Either one seems better than property assessments which are expensive to run and never seem fair.
102 Hoodridge sold for $1,125,000 and is assessed at $444,500.
If the three Hoodrige properties were assessed anywhere close to their asking price that would be nearly $56,000 in additional annual revenue to the school district.
Nah, smarter to go after some poor snook trying to get his assessment lowered by $10,000 or $20,000.
ARGHHH! In mine of 1 November 2012, the last line reads: "But a straight percentage applied to incomes in unquestionably more fair than the current voodoo system we have now." It should read: "But a straight percentage applied to incomes is unquestionably more fair than the current voodoo system we have now."
It's a b**** to get old!
The school EIT is stuck at 0.5%.
Raising the EIT will only benefit the municipality.
A question for the experts:
Should we expect the same percentage decrease in millage in the MTLSD's budget to be approved in May?
Elaine
Even more of a decrease, Elaine.
The School District is limited to the Act 1 limit of 1.7%, much lower than the 5% for the municipality.
I don't get it. Why wouldn't the SD go after the under assessed?
Elaine
I may be new to Mt. Lebanon but this seems kind of crazy. Why should people who do not work and instead live off investments or other things not touched by EIT live tax free in Mt. Lebanon. It is an absolute nightmare to even entertain such a thought. You would beshifting the entire burden of municipal and school services to something in the vicinity of 65-70% of the population. The EIT currently brings in about 45% of the municipality's tax revenue and an even smaller percentage of the school districts. You would have to increase the EIT by something approaching a factor of 6 to raise the requisite revenue for both entities. You may not like the property tax system, and it does have flaws, but you have to recognize the vital purpose it serves.
Skip Ecole
Mr. Ecole:
As the system stands now, you are correct - on both counts concerning the EIT and the property tax flaws. However, in shifting to a tax on income Mt. Lebanon could adopt a change in its system to account for total income, and not just earned. Also, commercial properties might still pay a real estate tax of sorts, since that property is being used to generate a profit. There are several other ideas being proposed in Pennsylvania, and in other states as well - particularly out west. But it needs to be recognized that all residential property taxes are paid out of income, interest, or capital gains. "That's where the money is." A person's residential property generates no income unless it is sold.
The point is that trying to fix the property tax assessment system is a little like Gorbachev trying to fix communism. It is the system itself that is the issue, and not this continuous bickering over how much a person's house is worth before it's sold.
As I mentioned, I'm not exactly comfortable with the EIT as it stands, but it's a point of departure; and it's time to consider how we might eliminate the property tax, and get the conversation started.
We will have to wait to see if the school district follows suit.
By law they can see an increase up to the Act 1 index limit. They are supposed to lower their millage to that point.
You can bet that if I was on the board that I would lower it to a zero increase in revenue and start where I should be starting instead of having a backdoor 2% tax increase on unsuspecting residents.
Here's an odd proposal somewhat similar to the windfall limit the SD lived under.
Why not a windfall limit on home sales. Take the Hoodridge property that sold for $1,125,000 but was assessed at $444,500. Why not some sort of 'windfall' tax based on some calculation on the difference between the assessed value vs the sold value. That way the owner would get away with NOT paying there fair share in annual property taxes.
Now this would require some figure and more regular assessments, but it wouldn't be a shocker since in the Hoodridge example the homeowner is reaping nearly $600,000 over what the county is saying the fair market value of their home was.
Conversely, let's say a home was assessed at $200,000 and sold on the open market for $175,000.
Then the homeowner souls get a rebate on the overassessed taxes paid.
Workable, I don't know, maybe the experts could analyze?
Should read: "That way the owner would [not] get away with NOT paying there fair share in annual property taxes."
There are several critical guiding principles that we should never lose sight of:
1. Taxes Flow Bottom-up - It's not what the government takes from us in taxes, rather it is what we are willing to give the government to fund itself.
and
2. Optimal Tax Equity - Every person should pay entirely for what they consume.
Wouldn't it be nice if each student funded their own education? We could eliminate community-wide taxes completely. Each family would be fully responsible to finance the education of their kids. Their kids consume the education - their kids can pay completely for what they consume.
This is exactly how students attend private colleges - they pay their own way.
I'd like to see that concept extended to the public school system in Mt Lebanon.
Better yet, how about the school board lives within its means? Now, there's a concept!
1:13 AM,
Are you trying to make a joke?
Do I have this correct?
The school district will spend $150 to birddog and fight their constituents reassessment appeals. The excuse being they don't want anyone taking advantage of the system.
So let's take a look. Let's say an average homeowner thinks the $250,000 reassessment on his home is perhaps $50,000 too high.
If he wins his appeal his home is taxed on a value of $200,000 x 27.13 mills = $5,426.00/yr.
If the school district wins and their home stays at $250,000. X 27.13 mills = $6,782.50/yr.
The difference between the two values is $1,356.50. Over 5 years that adds up to $6,783.80.
Now then the school district which has the authority to appeal reassessments won't go after under assessed homes (at least not yet).
So what are they missing pit on.
We're told a Hoodridge home assessed at $443,500 just sold for $1,125,000. Wouldn't the recent sale price be the "fair market value"?
$1,125,000 x 27.13 mills = $30,521.25/yr in school district revenue.
$444,500 x 27.13 mills = $12,,059.29/yr.
If the school district appealed the assessment on this property and won they'd get $18,461.96/yr in additional revenue.
Over 5 years they'd net an additional $92,309.80 in revenue.
If the school district wins and holds the other reassessment to the $250,000 value over 5 years they net $6,782.80!
Can anyone explain to me why they'll watch over reassessments where the home owner might be lobbying for a $50,000 - $100,000 reduction, but totally ignore obvious under assessments in the neighborhood of hundreds of thousands?
I must be stupid (or my math is flawe) because I can't comprehend the wisdom here.
I would think it would work the same for the municipality also.
Correction...
If the school district wins and holds the other reassessment to the $250,000 value over 5 years they net an additional $6,782.80 in revenue!
Actually, the school district's participation in these appeals is even less sensible than you believe. That's because it's a reassessment year. As a result, every time the school district pays $150 to participate in one of these appeals, that fee buys nothing. The outcome of the appeal will have no effect on the school district's tax revenues: The required revenue-neutrality adjustment to the tax rate will undo any appeal gains.
Tom,
If there is no gain to the District from the appeal, why pay Dominik Gambino's office $150 per appeal to argue against residents' assessment appeals?
I think you will find you are missing some information and you need to dig a little deeper.
John Ewing
John, I have no idea what the school district gains. If you believe that you have the explanation, I'd love to hear it.
If you pay SD taxes on a $250,000 instead of a $200,000 assessment the district reaps $1,356.50 over the lesser value.
But there is a cap on how much the district can gain from the windfall.
What I am curious about are there enough high priced UNDER assessed properties (quick glance of Tom's study suggest there may be) that they hit the cap much "sooner" and therefore need to reduce the millage rate for everyone - say drop 27.13 mills to 26.83 or there abouts.
Am I correct in my assumption?
Tom and John,
I checked this out and ran the numbers for the three step process:
1) individual appeal of county assessment
2) millage rate adjustment for 1.7% tax windfall limit
3) District appeal of under-assessed properties next year
This simplified analysis does not take into account the $150 Gambino fee or gambling revenue homestead exclusions.
The two scenerios are 1) the individual loses their appeal of the county assessment
2) the individual wins their appeal of the county assessment
There are two properties in the District, a) was $1000 before the assessment, and b) was $500 before the assessment. Millage was 1%.
Tax revenue was $15.
The assessment increased a) by 30% to $1300, and increased b) by 60% to $800.
b) appeals their assessment but loses.
$15 + 1.7% Act 1 limit = $15.26
New taxes would be $21.00, but millage gets reduced from 1% to 0.72%
The following year, the District appeals a) assessment, wins and gets it assessed at $1600.
a) $1600 + b) $800 * 0.72% = $1728
-------------------------------
b) appeals their assessment and wins for new assessment of $600.
For some reason, the board of property appeals considers it a win even though it's still higher.
$15 + 1.7% Act 1 limit = $15.26
New total property value is $1300 + $600 = $1900.
New taxes on would be $19.00, but millage gets reduced from 1% to 0.80%
The following year, the District appeals a) assessment, wins and gets it assessed at $1600.
a) $1600 + b) $600 * 0.80% = $1760
This example shows the District nets $32 more by losing the individual's county assessment appeal, after the windfall adjustment and appeal of underassessed properties.
David Huston
Mr. Huston I follow your calculation, BUT you don't address situations like the Hoodridge property that was assessed at $444,500 but sold for $1,125,000.
Reassessments are supposed to be based on Fair Market Value. What is a better measure of that than what the property actually sells for?
Here's something else to consider. Again the recently sold $1,125,000 Hoodrigde property.
The county reassessed it at $444,5000.
Most likely the sellers realtor assessed it around $1,125,000 +/- to list it. Or you had a buyer willing to pay way over the aseased value.
Then the buyer's, unless they paid cash or put down a huge amount, bank or mortgage company evaluated the agreed price as reasonable fair market or they wouldn't have approved the loan.
12:34, yes, I did address the Hoodridge situation.
It is like property a).
Propery a) is underassessed, and appealed by the District next year, after the Act 1 limit is applied to prevent the assessment tax windfall by reducing millage.
The part you don't understand is, even though the Act 1 limit should be applied a second time, after the District appeals under-assessed properties, but it won't be.
Also, there is no guarantee Posti will uphold her promise to appeal underassessed properties next year.
David Huston
Ah, I think I see what you are driving at now. Thank you.
If I'm following you, the district (or the muni) could wait out the Act 1 cap to expire, then drop the manner on these under assessed properties... correct?
Another question. Didn't Baldwin Township ignore the Act 1 limit the previous reassessment and nothing was done to stop them?
Wouldn't the obvious defense for the under assessed property owner be: "if we were so under assessed why didn't you appeal 2013's valuation?"
Say on Hooddrige again, if $444,500 was OK in 2013. how can the district say in 2014 the property jumped in value by $600,000?
And if the cdistrict does somehow prevail how they let 2013s value stand? Wouldn't that activate the Act 1 limit?
2:40, you need to understand, individual homeowners can only appeal during a reassessment year, but the school district can appeal anytime.
Also, the district only has to readjust millage due to the Act 1 limit during an assessment year.
http://www.pbi.org/resources/extras/7269_assessment_july/Windfall.pdf
Mt. Lebanon School District has a history of reverse appeals between reassessments:
http://www.post-gazette.com/stories/local/neighborhoods-south/mt-lebanon-resident-asks-school-board-to-drop-appeals-455355/
Check out the status of SB1309 mentioned here:
http://www.mtlsd.org/district/stuff/2009/psbalegislativereport10.11.12.pdf
David Huston
http://www.alleghenycounty.us/reassess/SalesbySD/MtLebanon.pdf
This would helpful for the district, doncha think?
Elaine
The above is sale price vs. reassessment.
Elaine
Thank you Mr. Huston - enlightening.
If homes on Hoodridge are under assessed, aren't homes in Virginia Manor under assessed too? Perhaps those who live in Virginia Manor should contribute for new fields and turf. Are you listening Mr. Franklin?
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