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Allegheny County Council passes 2025 budget with ‘compromise’ 36% tax increase

Trees outside the Allegheny County Courthouse.
Katie Blackley
/
90.5 WESA

After weeks of sparring, Allegheny County Council’s budget committee chair and County Executive Sara Innamorato reached an agreement to raise the county’s property tax rate to 6.43 mils — 1.7 mils more than residents currently pay, or a roughly 36% increase.

Announced just hours before council’s Tuesday meeting, the compromise tax hike is lower than Innamorato’s initial 2.2 mil increase proposal, but higher than a rival 1.35-mill hike offered by council. The compromise will balance the budget and “begin to chip away at the fiscal challenges we inherited from the previous administration,” Innamorato said in a statement.

“This budget is everything that we need, but not everything that we want,” Innamorato said after the vote.

Council voted Tuesday evening to approve the plan by a 10-5 margin, just clearing the two-thirds supermajority required by county law to approve a change to real estate tax rates. Democrats David Bonaroti, Robert Macey, and Pat Catena voted against the millage increase, as did council’s two Republicans, Sam DeMarco and Suzanne Filiaggi.

The tax hike is the county’s first in more than a decade. It leaves the homestead exemption at $18,000, rather than at a higher level that Innamorato had initially proposed to ease the tax burden on homeowners.

Under the plan, the owner of a home assessed at the county’s median value ($110,400) would pay about $594 in property taxes each year, or about $13 more each month than they currently pay.

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The plan restores funding that Innamorato proposed adding to the Department of Human Services: Doing so will allow the department to take full advantage of state and federal matching funds that might otherwise have been left on the table. Innamorato said the compromise plan also allocates money for emergency rental assistance and child care programs.

The budget also avoids laying off county employees, and provides money for the county’s “rainy day” fund, bringing it to what the statement called a “serviceable level,” about $23 million. Prior years’ budgets have drawn down that savings account to balance the books, and Innamorato sought to replenish it to the tune of $33 million; council’s plan put only about $5 million into it.

The adopted $1.17 billion operating budget trims about $26 million from Innamorato’s initial proposal. Most departments will have larger budgets in 2025 than they did in 2024. Some, including the offices of the county executive and county council, and the county’s Kane Community Living Centers, will see decreases compared to Innamorato’s initial proposal.

In the statement, Innamorato cautioned, “We will have to manage the budget carefully to maintain long-term fiscal health. … [M]y administration is committed to work with Council and departments to find efficiencies in 2025 and increase transparency, so taxpayers understand where their money is being spent.” She added that the budget puts the county in a “strong fiscal position to manage upcoming labor negotiations and other future fiscal challenges.”

“I am pleased to bring this 2025 budget process to a close in a manner that provides for no layoffs of county employees, increases funding for law enforcement and public safety personnel, and maintains services for the residents of our county,” said county council budget chair Robert Palmosina in the statement.

Social services providers who spoke at Tuesday’s meeting overwhelmingly supported the budget. Council members who voted in its favor also cited the need to fully fund DHS, the District Attorney’s and public defender’s offices, and the county elections division.

“A lot of these core county programs are suffering right now because they have such tremendous caseloads that they have to deal with,” said Dan Grzybek, a Democratic member of council who voted in favor of the millage increase. “This 1.7 mil budget accomplishes getting them to a more sustainable position.”

“How can you say no to senior citizens that need us? How can you say no to children? It's difficult,” council member Nick Futules said through tears. “It's not an easy choice when you have to raise taxes and you have to deal with the people that pay them and the people that receive the benefits.”

But other members were more critical of the compromise. Bonaroti, who voted against the millage increase, said it was proof that Innamorato’s initial 2.2 mil proposal was unnecessary.

“The world didn’t end” when it wasn’t approved, he said.

Bonaroti supported the council's 1.35 mil proposal. He warned that the City of Pittsburgh and Pittsburgh Public Schools could still raise taxes in the future, which will put additional pressure on struggling residents. And, he noted, the county still has a “significant revenue problem.” Expenses continue to rise while cratering assessment values for commercial properties Downtown have dramatically reduced property tax revenue, and the federal funds from the American Rescue Plan Act used to shore up those losses are expiring.

“It's not easy” to tell residents their taxes will be going up “because it doesn't solve the problem,” Bonaroti said, adding that it could cost fellow Democrats in future elections and set the stage for future funding cuts.

DeMarco criticized Innamorato’s administration for bringing the county’s structural deficit to council’s attention “way later than it should have [been],” and throwing county-funded social services providers into a panic about potential cuts.

Filiaggi called for additional transparency in future budgeting efforts.

Still, other council members noted that similarly positioned local governments have also raised taxes over the last five years. Council member Paul Klein said taxes have grown as much as 50% in cities like Atlanta, Jacksonville, and Tampa.

Council member Bethany Hallam pointed a finger at Innamorato’s predecessor, former county executive Rich Fitzgerald, and laid the blame for the county’s current predicament with his administration.

“An unavoidable reality of government is that taxes are critical for the provision of the services on which we all collectively rely,” she said. “Ultimately, we have to try to find a balance between providing the services upon which our residents rely and maintaining the revenue that we need to do all of those things.”

Budget chair Palmosina said the county still has “a tough road ahead of us.” It’s unclear whether there will be another tax increase next year (though supporters of the 1.7 mil increase said they hope it will stave off additional tax hikes for the foreseeable future) and Allegheny County could be facing a countywide reassessment, either initiated by county leaders or mandated by the courts.

In any case, Innamorato said after the vote, if council had passed “anything lower than the budget that we passed today, we would have been in a state of austerity and we would have just been struggling to maintain, and we wouldn't have the opportunity to take the time to step back and innovate.”

This story was updated to include new details about the county council vote and other additional information.

Updated: December 4, 2024 at 10:55 AM EST
This story was updated to clarify Bonaroti's statement about potential future tax increases for city residents.
Updated: December 4, 2024 at 8:33 AM EST
This story was updated with the increased amount of taxes a property owner would pay each month.
Julia Zenkevich reports on Allegheny County government for 90.5 WESA. She first joined the station as a production assistant on The Confluence, and more recently served as a fill-in producer for The Confluence and Morning Edition. She’s a life-long Pittsburgher, and attended the University of Pittsburgh. She can be reached at jzenkevich@wesa.fm.