Pittsburgh public school officials are raising early warnings about ongoing property tax appeals, which could lead to a reduction in the district’s revenue.
Pittsburgh Public Schools chief financial officer Ron Joseph told board members Monday that many of the properties that provide a significant portion of the district’s tax revenue are under appeal.
“Going into the budget year, if those appeals are being contested for prior years, and assessments were lowered, then we would be on the hook for paying appeals for prior year refunds, but then also our tax base will be lowered,” Joseph said.
A Common Pleas Court ruling from 2022 ordered that the county reduce its Common Level Ratio — a measure that determines property taxes based on county assessments — from 81.1% to 63.53%.
That number dropped again to 54.6% at the start of this year, according to Pennsylvania’s Department of Revenue.
Already last month, the Tower at PNC Plaza, the U.S. Steel Tower and Three Gateway Center each won their assessment appeals, representing a combined $200 million in reductions.
“That's something that has the potential [to] — and will in all likelihood — affect our real estate tax base and the amount of real estate revenue that we can hope to bring,” Joseph said.
He added those reductions, among dozens of other high-end commercial appeals, could affect the district’s financial projections for 2025. School board members hope to begin that budget process next month.
It’ll also be the first year that schools nationwide won’t have federal pandemic aid to fall back on. Districts must use their last round of Elementary and Secondary School Emergency Relief funding, also known as ESSER III, before the end of September.
As of the end of 2023, PPS officials have spent or earmarked roughly 47% of the more than $100.2 million allocated to the district through ESSER III. That means the district must spend another $50 million before Sept. 30, or risk sending back the remaining funds to the federal government.
“[The] only time will return money is if we've exhausted all possibilities to spend money in a legal fashion that is allowable by the entities and meets all of the criteria and scrutiny,” Joseph told the board.
The district is required to allocate at least 20% of its funds toward remedying learning loss. Other expenditures include new curricula aligned to state and national standards, K-12 tutoring and HVAC installations and repairs.
“Most of those items are for one-time expenditures, such as upgrading our infrastructure, laptops,” Joseph said. “So, things that we'll probably have to worry about once those replacement cycles come due.”
Joseph said the district was careful not to use its ESSER funding on hiring staff, given that doing so would put the district at risk of massive layoffs once the funding expires.
He added that most of the money allotted to maintain district staff were designated for 2022 and the first half of 2023, when those positions were phased out through attrition.
School board members will still have to consider whether to allocate new funding sources to certain programs currently covered by ESSER dollars, such as the district’s summer learning program.
PPS chief accountability officer Ted Dwyer said that program, as well as after-school programs funded through ESSER, are currently undergoing a districtwide evaluation.
