Despite this, the WCDC continues to carry on as if that organization represents all the people of Wilkinsburg. The WCDC intends to meet with elected Pittsburgh City council members to lobby them to put the question of merger on the Pittsburgh ballot for November. The WCDC is not our elected government, and no Pittsburgh City official or Wilkinsburg resident should confuse this interest group with the Wilkinsburg municipal government.
The people who prefer “representation” by the WCDC to representation by the elected council are displeased that their group cannot win a majority of council seats in Wilkinsburg. Their concerns and issues are a minority viewpoint in the Wilkinsburg electorate. Disguising their “if we can’t control it, we are going to take the ball and leave” attitude, their lead argument for dissolving Wilkinsburg is that our real estate millage is twice the Pittsburgh real estate millage. Pittsburgh has a lower real estate millage than Wilkinsburg (rank 92 from low to high within 126 Allegheny County municipalities that use the same real estate taxation rules) because it relies instead on a particularly high earned income tax (EIT rate of 1% for city residents and 2% for the school district, with no other combined muni-SD EIT rate in Allegheny County above 1.8%).
Municipalities with lower millage than both Wilkinsburg and Pittsburgh are those with almost all high-value properties; Pine Township has the lowest Allegheny County millage at 0.998% — less than 1%. The correlation is evident– higher assessments and lower millage create tax revenue equal to or exceeding lower assessments and higher millage. The WCDC has found a “nice” way to say– we want to be in a tax base with a greater number of high value properties. “The City of Pittsburgh has a broader tax base…”
Yes, the Wilkinsburg real estate millage is too high– because some of the same people who are now promoting merger actively prevented use of tax sale to return median and lower value houses to paying taxes. There is a way to reduce the millage that respects the homes and neighborhoods of median and lower than median value. That way is to do the right thing, without disrespect to lower value neighborhoods. Eliminate abandoned property, which by definition does not pay real estate tax. Pittsburgh also tolerates abandoned property, but Pittsburgh is a bigger rug (a “broader tax bas”) under which to sweep the problem. Note that investors who buy abandoned properties at free-and-clear tax sale for low auction prices do not worry about the higher Wilkinsburg millage when the millage is applied to a low assessment.
If the Wilkinsburg combined real estate millage were a problem for every property owner, how is it that some homeowners do not apply for the Homestead exclusion, which reduces real estate tax owed by almost $400 per year? The answer is– property assessment matters, not only millage. Historically, houses in Wilkinsburg have sold for lower prices than houses across the municipal boundary. Reassessment based on most recent sale price has reflected this. Informed buyers, and realtors telling buyers the truth about property assessments, resulted in new owners paying what they could afford for the package of purchase price plus future real estate tax. When a new owner pays $435,000 for a house that sold two years before for $150,000 (true case), their problem is basically that they paid too much for a house. The lower Pittsburgh millage would soften the hit, but their assessment is still $185,200 higher than it was before their purchase price was considered in reassessment (same true case). Dissolving Wilkinsburg is not the solution to the problem of buyers overpaying for houses.
Note that more than one person who earns income can live in a house, so the meaningful comparison for a household is total tax. Take the WCDC example of a house assessed at $100,000– Wilkinsburg real estate tax $4823 compared to Pittsburgh real estate tax $2274. Assume there are two members of the household who pay EIT, each with $65,000 annual income– Wilkinsburg EIT $1300 compared to Pittsburgh EIT $3900. Combined real estate and income tax– Wilkinsburg $6123 compared to Pittsburgh $6174. Merger would increase taxes for this household.
No to merger!