Allegheny County Executive Sara Innamorato’s proposed 2025 property tax hike faces an uphill battle to gain approval from County Council, according to members.
The $1.2 billion spending plan calls to boost the county millage rate by 46.5% — up from 4.73 mills to 6.93 mills. If approved, it would be the county’s first property tax increase in more than a decade and generate about $167 million in additional property tax revenue. But county officials say it would cost the median homeowner about $15 each month.
Innamorato said it’s necessary to plug a looming structural deficit and stave off challenging economic headwinds. The county is expected to have a $81 million deficit by the end of 2024.
The county, which gets more than half of its operating budget from local tax revenue, faces an eroding tax base due heavily to downtown commercial properties winning massive reductions on their assessed values. Officials are also dealing with the rising cost of health care, agency staffing, and general inflation at the same time COVID-pandemic-era federal funds, which once offset deficits, are set to dry up.
But the millage increase proposal drew immediate opposition from some members of council, including Republican Sam DeMarco. He noted that residents are dealing with the same financial difficulties the county faces.
“The county executive told council we can’t cut our way out of a budget deficit,” he said in a statement. “[I]t’s less likely that we can tax our way out of one, especially at a time government overspending is fueling inflation and working families now find their largest, single investment — their homes — threatened with another increase.”
Council president Pat Catena, a Democrat, echoed DeMarco’s concerns.
“How do you go back to someone and tell them, ‘Your taxes are going to increase by close to 50%?’ When they're already struggling?” Catena asked.
“That's just unfortunately too much for the residents of Allegheny County to absorb with the cost of everything being high already.”
Catena said he and at least five other members of council would vote against a budget with a 2.2 mill increase, calling the proposal “dead on arrival.”
The Home Rule Charter requires at least 10 of council’s 15 members — a two-thirds supermajority — to approve any change to real estate tax rates.
Council member Nick Futules is among those opposed to the increase. He said he’s working with council’s budget manager to create a counter proposal, one with a smaller millage rate increase.
“I'm not interested in laying people off or defunding certain things,” Futules said. “But I am interested in making sure that we can at least meet our budget and try to get a little extra” for future savings.
That could mean having county departments cut nonessential spending, eliminate open job positions, or implement a hiring freeze.
In a news briefing prior to her budget address, Innamorato said her administration is looking for efficiencies. But she added, “We cannot cut our way to a balanced budget.” Her proposal retains what she described as “critical services,” like funding for the Department of Human Services and the county Health Department.
Council member Dan Grzybek said that, although he would be inclined to vote in favor of the 2.2 mill increase, he is also looking for ways to prevent a large tax hike.
“I fail to … see a reality in which there is not some sort of millage increase” based on what he’s seen of the county’s finances, he said. He added that it’s unlikely officials will find tens of millions of dollars that could be cut “in a responsible manner that doesn't rapidly degrade our county government.” And though an increase might make sense for county finances, “That doesn't necessarily mitigate the impact that it’s having on residents’ pocketbooks.”
Eric Montarti, research director for the Allegheny Institute for Public Policy, urged officials to examine county expenses in greater detail.
“Spending is what drives the need for tax revenue,” he said. “Let's look at these departments. Let's look at the functions that we carry out and what realistically can we do with the budget we have.”
Montarti added that it’s good public policy to ensure future budgets are balanced as well, and said implementing regular property reassessments could help ensure steady budgets in the future. The county has not reassessed property in over a decade, and in recent years has been compelled to pay refunds when commercial and residential property owners won big reductions in their taxable values.
Catena said there’s no one solution to getting county finances back on track.
“We're not going to tax ourselves out of this mess,” he said. “What are we going to do from a big picture perspective to raise revenue? Obviously, we need to increase the tax base. So what are we going to do as far as economic development, recruiting, bringing jobs here?”
The proposal also seemed to be causing heartburn for officials outside county council. Democrats on the November ballot privately acknowledge that a tax increase might be necessary, but fretted that the hike, proposed by a member of their party, might complicate the crucial final weeks of their campaigns.
One Democrat, state House member Nick Pisciottano, sent an Oct. 9 letter to county officials expressing “concerns … that I have received from my constituents” about the proposal. He urged officials to look at potential cost efficiencies and consider phasing in the hike over a few years.
Pisciottano is running for the state Senate District 45 this year but says the letter “wasn’t just politics. It was about reaching out to county council to provide feedback from constituents [and] talk about what we’ve done at the state level to hold the line on taxes and make sure programs are fully funded.”
At a series of budget hearings starting on Thursday, department heads can expect pointed questions about past spending and areas where the budget might be slashed.
“The bottom line is, I think what we're trying to do is come up with a millage rate that everybody can live with. So we can get to the 10 votes and not shut the county down,” Futules said.
The hearings will take place at 5 p.m. on Oct. 17, Oct. 28 and Oct. 30 in the Gold Room of the Allegheny County Courthouse. Members of the public must sign up in advance to comment on the proposal. Written comments will be accepted through Nov. 8.
Innamorato and council must approve the budget in early December.
90.5 WESA's Chris Potter contributed to this story.
