Pittsburgh council votes for 20% property tax hike

Pittsburgh City Council gave preliminary approval to a 20% property tax increase Sunday morning, taking a drastic step to fill what they described as a $20 or $30 million dollar hole in Mayor Ed Gainey’s proposed 2026 budget.

Council will cast final votes on the tax hike and next year’s budget at a meeting Sunday afternoon.

The tax increase tentatively passed by a vote of 6-3. Voting yes were council President R. Daniel Lavelle and councilors Bob Charland, Barb Warwick, Deb Gross, Erika Strassburger and Khari Mosley. Voting against were Bobby Wilson, Theresa Kail-Smith and Anthony Coghill.

It is uncommon for members to change their votes between a preliminary approval and final vote. 

The six votes in favor of the tax increase would be enough to override a veto from Gainey. The mayor’s office did not immediately respond to a request for comment. Council members said they’re prepared to vote to override a veto, if necessary, on Dec. 31.

“In the last 24 hours I’ve felt basically every emotion except for maybe the positive ones,” said Charland, who said he did not want to raise taxes but that it was needed. “My district is going to hurt from this tax increase.”

The change would increase the city’s millage rate from 8.06 to 9.67 — an additional $1.61 in tax for every $1,000 of assessed value.

An unusually chaotic budget season began in November when Gainey presented a $680 million operating budget proposal to council. Council members and City Controller Rachael Heisler quickly pointed to “unrealistic” figures in the budget, particularly what they said were underestimates of how much the city would spend next year on public safety overtime and utility bills. They also faulted the mayor’s plan for not investing more in the city’s fleet of fire, EMS and public works vehicles.

Council outlined a plan to add funding to each of those areas on Thursday, but were told by their top budget aide that they would have to raise the city’s property tax millage rate in order to fund the new plan.

The increase favored Sunday morning is lower than the 30% hike suggested by Warwick in a bill she introduced Dec. 8. 

The city is poised to join Allegheny County and Pittsburgh Public Schools in raising property tax rates in recent years. The PPS board last week hiked school property taxes by 2%, from 10.25 to 10.457 mills.

Three members railed against the tax hike in pre-vote comments, saying the city has not done enough to cut spending first and didn’t use its COVID-19 relief funds properly.

“While everybody else is raising taxes around us, we need to step up and say we’re going to be the adults in the room,” said Coghill, referring to county and school taxes. “We’re going to make every effort that we can before we come with our hand out.”

Kail-Smith said the tax hike would be too hard on residents and criticized those who supported it.

“Don’t tell me next week that you care about affordable housing,” she said. “Don’t tell me that you care about poor people. Don’t tell me you care about the food justice fund. Because you are making people line up for that stuff with your votes.”

The city counted on routine growth in its taxable property value in the 2010s, negating any need to raise its rate. But the combined shock of the COVID-19 pandemic and a lawsuit that changed how tax bills are calculated stopped that growth, leaving city revenue short of its planned expenses.

Dozens of residents at a Saturday public hearing opposed the tax hike, with many urging councilors to seek more money from large, tax-exempt nonprofits such as UPMC.

“They’re plundering us,” one commenter, Friendship resident Kasey Brown, said of health care companies. “They’re a middleman. They have no place going untouched when you come and ask more and more and more of us.”

But Pittsburgh leaders have tried for decades to wrest more money from major nonprofits, continually running into Pennsylvania law that makes it difficult or impossible. 

Some landlords warned at the public hearing that the tax hike could be passed on to the city’s renters, who make up a slight majority of residents.

“These property taxes are just another nail in the coffin that forces me to price out more and more potential tenants just to break even,” said Xander Paski, who said he manages properties in the Strip District.

Warwick suggested during remarks after public comment that most landlords could swallow the rate hike without passing it on to renters.

“It would be interesting to ask your landlord, ‘What is your mortgage on my unit?’” Warwick said. “Ask your landlord … and then tell me if your landlord is just eking by.”

Kail-Smith, who voted against the tax hike and is departing council in January, said the city is already asking too much of its residents. 

“You can’t get blood from a rock. And that’s what you’re trying to do here,” Kail-Smith said.

Charland said he did not want to raise taxes, despite his vote, and that he would “fight like hell” to balance the budget in other ways in the future.

Charlie Wolfson is the local government reporter for Pittsburgh’s Public Source. He can be reached at charlie@publicsource.org.