The Mt. Lebanon Tax Office should be commended. Our June 1 tax bills ARRIVED in our mailboxes on June 1. They are so efficient!
For those of you who have recovered from the shock and are looking for something fun to do on this Sunday afternoon, I have a fun exercise for you all. The Allegheny County website, Allegheny County Real Estate Office provides a free search for mortgages. Click on "Free Search" in the gray text box. The default office setting is "Deeds." Using the drop down arrow, find "Mortgages." Every time one takes out a mortgage, refinances, takes out home equity loans, or pays off the mortgage, it is all recorded here.
Here is where the fun begins. Start looking up the names of those who vote on our tax increases. Compare the amounts of what is owed vs. the sale price of the home here. In many cases, it is obvious why we are where we are with our school district budget.
27 comments:
Convenient how that works isn't it.
School EXPENDITURES... that's EXPENDITURES... go up by $2 million and amazingly some of the very influential people somehow manage to in actuality pay less in school district taxes!
One example, the property went up about $30,000+, 2013 vs 2012. But even with that higher reassessment their school district tax went down by $200.
Were they overassessed in 2012, doubtful in comparing recent sales on the street. Underassessed in 2013 very likely.
Want to get a real quick snap shot of what is going on. Just click on the Tax information tab for any given property.
You'll be able to see county tax payments current and prior.
I removed a comment which was too personal. Astute observation, but make it more generic please.
Elaine
One candidate for school board has financial trouble.
That's OK, who betterto run a school district that has finance trouble too. :-)
Why else would it have to go begging for money!
Some beg for money all the time.
Yes Elaine. It explains alot.
Borrow, borrow, borrow, debt, debt, debt, spend, spend, spend - it's the new American way - even better when it's other peoples money!
Who cares if the mortgage is upside down?
Why put off until tomorrow what you can tax and spend today?!
We need more businessmen on the board.
There are businessmen and businesswomen. We need both!
Elaine
No doesn't anyone remember the Three Billy Goats Gruff?
What we need is one humongous goat!
A school director in another district told me in May that he has never seen so many houses for sale in Mt. Lebanon...
I was thinking that also, but most seem to turn over fast.
Though for the past several years a number of these places seem to change rapidly.
I've never been able to determine if people get disenchanted quickly, are very mobile or flipping them for profit.
Anybody ever study the 2010 US Census results for Mt. Lebanon ?
Similar to the 2000 and 1990 Census results, about 25% of residents moved into Mt. Lebanon only within the past 5 years. Only about 15% had been here for 30 or more years. This is not the permanent type of residency presumed, due largely to the families who move here for only their childrens K-12 years and immediately move out to escape the taxes. These what are referred to as "process" families pay maybe $5,000/year total in school taxes compared to each of their childrens $15,700/year cost of MTLSD education, and then they bail out.
10:09, suppose people are retired for 20 years before they die.
$5,000 in taxes for 20 years is $100,000 in taxes alone.
Who has an extra $100,000 sitting around just to throw away on taxes after they are done earning money?
Certainly not the people who will still be paying down HELOC loans.
By the grace of God, be grateful you don't have a HELOC loan.
I just had to look up HELOC. It stands for Home Equity Line Of Credit.
Elaine
Yeah, HELOC's are usually 5-year fixed that convert to perhaps a punitive subsequent variable rate, used primarily for renovations, major repairs, not mortgage debt financing of a property purchase.
It is a good thing for the HELOC borrowers that the interest rates are going down - unless they have too much debt to repay. You know, just like the school district will have too much debt. The difference is the district can reduce employees, but parents in financial trouble can't reduce their kids.
Just wait, 7:52 pm, until interest rates start climbing faster than they are beginning to right now. HELOC variable rates begin to kick in at 4% over prime or LIBOR. And when prime rates return to 4%, look out scout.
This business of "process families" (see June 3, 2013 at 10:09 AM) is a point well made, and I will go it one further by saying that it is in the municipality's interest to have a steady and predictable turnover. "Process families" generally don't complain about taxes and many of them don't vote - probably most of them, if the voting statistics over the past 20 years are any indication. Each "process turnover" results in a profit for both Mt. Lebanon and the Mt. Lebanon School District. This is why threatening to leave our little village does not concern either the commission or the school board - in fact, they're delighted. (The district does have a larger stake in any residential sale because they want the buyers to be a young family with lots of kids.)
The problem for Mt. Lebanon is that its six square miles of area is, for practical purposes, "fully developed," and there is little room for growth. Growth would allow for more people to stay and establish permanent families, but with no growth potential the pressure is now on the retired, elderly, and "empty nesters" to get the hell out and make room for more single generational residents - who will themselves move out once the last kid graduates MLHS.
Unfortunately for Mt. Lebanon, the village has "grayed" over the years - certainly since I moved here in 1975. District enrollment has been declining to the point that now only about 16% of the population of Mt. Lebanon represents school children. The unavoidable conclusion is that many former "process families" decided to become permanent residents, and some families sold their homes to childless couples or even single people - that's certainly the case on the street where I live.
Towns, like human beings, have "life cycles." Those towns that understand this fact generally change to meet the challenges that exist and not the ones imagined. A "graying" town does not have to be a dying town; IF the people who run such places are sensible to reason.
Ahhh yes Richard. But here is how senseless or shallow the thinking is of too many of the populace. For example :
There are roughly 14,000 Lebo households, of which about 3,500 are comprised of folks that are aged 65 and over. Almost all these are retired, living on semi-fixed incomes growing less than real cost of living increases. Yet these households pay school taxes, almost entirely real estate, but taxes that are and have been increasing at twice the rate of inflation. This demographic is genuinely concerned about their ability to be able to continue to afford and remain residents of Mt. Lebanon.
Then, in addition to a growing number of "process families", there are a large number of young resident families with children who are advocates for more families with children to move into Mt. Lebanon. The more the merrier. Because we're "built out" there's no room for growth, so the young families believe the old empty nester's should move out and make room for the younger generations with kids. "If you can't afford to live here, move out" seems to be their attitude.
Here's a fact that the young ones don't like to hear or appreciate - 75% of Lebo households do not have children in MTLSD schools. Guess then who's paying most of the school bill ? Lets also assume that the 3,500 senior households each pay $5,000/yr. in real estate taxes to MTLSD. Then lets assume that 1,000 of the senior citizen households decide they can't afford to live here any longer, take the hint and move out of Lebo, and are replaced by 1,000 young families each with 1 school age child.
The average annual cost of a MTLSD education per student is about $15,750. The 1,000 additional students - and there is available school & classroom space if the added families settled in all 5 Wards and there was a reasonable age distribution - would then add some $15,750,000 to the District's annual operating budget. However, these 1,000 families would be contributing only $5,000,000 in tax dollars ($5,000 X 1,000). And, there would no longer be the 1,000 empty nester's subsidy of $5,000,000 that funded the original student body costs.
To fund this deficit - $5,000,000 of former empty nester subsidy + $10,750,000 of added students unfunded costs - real estate taxes would have to substantially increase . It would take about 6 to 7 mills to fund this $15,750,000 per year gap.
This sort of tax increase in turn would likely drive out perhaps another 1,000 senior citizen families, and so on. And real estate values would plummet !
Now, what if there were an average of 1.5 or even 2 children added per family of move in's ? Or, how about considering only incremental instead of full costs per student ? How about transfer taxes, how about EIT differences ? OK...do all that, but the fundemental reality does not change.
Be careful out there. You may very well get what you wish for.
Bill Lewis
Bill:
As one of those "over 65" folks you mention, I concede yours of June 6, 2013 at 12:39 AM - thank you for your well thought out analysis. But I still can't shake the thought that the "powers that be" would argue that the new families, plus those residents who are already here, would likely be well-off and could afford to "pay the increased freight." I'm also thinking that the directors are banking on an increase in Commonwealth funding somewhere down the road. In short, I doubt if our school board puts much thought as to how the rate of expenditure vs. growth affects the future of the community.
We keep electing people who are under the delusion that Mt. Lebanon is "rich." It is not. It is upper middle-class. I'd like to take these people out to the Hamptons in Long Island where I used to live and show them what "rich" actually looks like.
RG
Love the analysis, Bill. Something else to consider is that as the district needs to raise taxes to educate the hoped for move-ins, those taxes will also chase away businesses. We've already seen the lack of interest in $500,000+ condos at Washington and Bower Hill. The land down at Castle Shannon & Mt. Lebanon is also empty.
With all the amenities, a main street with great restaurants, new theatre, Rolliers, the T one would think it would be a magnet for wealthy professionals w/o kids, but it's not. Wonder why?
Look at all the vacancies in Uptown. Do we need more restaurants and massage parlors in Lebo? What ever happened to the pole dancing teaching place? What about the high-end condo's that never happened, again for a second time? The Denis will never reopen, will it? What's up with the hotel, it was supposed to open in March? The 607 building next door is essentially empty and even possibly tax liened? And the local propaganda machine would have us believe all is well in the bubble!
If you are not familiar with The Mt. Lebanon Game, the rules are simple: (1) If you move to Mt. Lebanon, you may claim 100% of the benefits of living in Mt. Lebanon, including a very expensive public education for every child in your family. (2) What you pay for those benefits, however, is determined not by the value of the benefits you claim but by the value of your property. That’s it. Those are the rules.
If you study the rules, it’s easy to arrive at the winning strategy: buy a modest property and then claim a lot of benefits – especially public education.
Pick any other strategy, and you end up paying for benefits that mainly go to other people. Yes, you receive some secondary social benefits from your subsidy, but for the most part you’re paying for stuff that does not go to you.
I need to be clear that I’m not making any judgments here. I’m just explaining the rules of the game and their economic implications. In fact, I’ve advised friends with young families to move to Mt. Lebanon. “It’s a steal,” I tell them. And it is.
For now.
But the problem with “steals” is that they are rarely sustainable. Right now in Mt. Lebanon, about 80% of the benefits go to less than 30% of the households. That gives the remaining 70% of households, who pay $5 in property taxes for every $1 in benefits they receive, a strong incentive to move somewhere else, somewhere quaint and charming and walkable but also equitable. (And those places do exist.)
Now this is the point where someone will say, “Well, who cares if they move? That just makes more room for young families to move in and make Mt. Lebanon vibrant.” The problem with this thinking, however, is that as more young families move in, the steal becomes less of a steal, and eventually young families will choose other places to live, as well.
For example, let’s pretend that enough young families have moved into Mt. Lebanon to occupy two thirds of households. To pay for their benefits, the annual tax bill for living in Mt. Lebanon would nearly double – for everyone, including these new families. And while our school district is good, it’s not that good. What young family would choose a Mt. Lebanon education at twice the price over Upper St. Clair or North Allegheny for half as much? So it’s hard to believe Mt. Lebanon could ever sustain even two thirds of its households being young families.
Thus the idea that, as “The 70%” move out of Mt. Lebanon, young families will keep on moving in to replace them – that isn’t going to happen. What is more likely to happen is that property values will start to stagnate, especially on the upper end, as fewer households – young families included – find Mt. Lebanon competitive with what they can get elsewhere.
But these things take time. For now, you can still win at The Mt. Lebanon Game – if you play it right.
Tom, didn't your excellent assessment of the reassessment indicate that, at least according to the county, high end properties may be stalling?
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