Pittsburgh City Council gave preliminary approval on Monday to legislation that would create a ten percent tax on billboard advertisements, setting up a final vote on the new excise tax at next Tuesday's Council meeting.
The bill's sponsors, Councilwoman Natalia Rudiak and Council President Darlene Harris, say the tax would bring in two to four million dollars annually. They argue the tax is warranted because billboard owners pay very little in taxes for the small properties on which the large structures stand.
The tentative Council approval came over the objections of Lamar Advertising, which operates hundreds of billboards in the Pittsburgh area.
Lamar legal counsel John Camin said the company will sue Pittsburgh in federal court if the law goes through, even though a similar tax in Philadelphia was upheld by state courts. He said the proposed legislation is different enough from Philadelphia's tax to engender new legal arguments.
"First, the [Philadelphia] tax was in effect for a total of eight years. That was part of [a lawsuit] settlement," said Camin. "The permit fees were actually reduced for the signs as part of this tax. My understanding is that before, they were $650. They're now down to $50 a billboard."
He said the proposed tax in Pittsburgh would violate constitutional property rights. Camin said if the bill were to pass, the tax would hamper business and commerce in Pittsburgh.
Councilmen Ricky Burgess and Bruce Kraus suggested that the bill's sponsors hold off on the final passage of the bill for a little while, in hopes that the city could agree to a compromise with local advertising companies in the meantime.
At a public hearing last week, an overwhelming majority of speakers supported the billboard tax proposal. One speaker warned, however, that Council should not "fall in love" with the new tax revenue and issue permits for more billboards as a result.
