(The Center Square)— Ed Benz has owned houses in Allegheny County since 1999, but recent tax increases are eating into his profits so much he might not be able to keep them.Last year, officials in the western Pennsylvania county raised its property tax rate by 36%, to 6.43 mills from 4.73 mills, the first hike in more than a decade. This upcoming school year more than two dozen of the county’s 42 suburban school districts are poised to raise the property tax rate an additional 1-5% The founder and owner of MCF Group, a property-management firm, Benz, a 61-year-old native, owns 40 properties, all but one of which are single-family houses worth $100,000 to $250,000. He estimates those hikes have sliced his profits by 3%.“If they keep up these increases, I may be forced to exit the business,” Benz told The Center Square. Unlike most states, Pennsylvania does not require counties to reassess property on a regular schedule, such as every few years. Allegheny County, the state’s second most populous, with 1.2 million residents, has not reassessed property values since 2012. Property values have risen since then. To adjust for those changes when owners appeal their assessments, the county uses a legal formula known as the common level ratio. In 2013, the ratio was 100%. Now it’s 50.14%. That means a house with a market value of $200,000 could have an assessed value of $100,000 for purposes of an assessment appeal. Rising costsSchool district and municipal officials said the falling common level ratio has increased the number and effect of assessment appeals, reducing the property tax base. Property tax increases, they say, are necessary to address rising health care and energy costs as well as special education and staff salaries. According to a report from the Pennsylvania School Boards Association, the three most cited expenses were charter school tuition, special education, and health insurance. County Executive Sara Innamorato declined a request for an interview.The increases range from a hike of 0.329 mills in Riverview to 1.429 in East Allegheny. One mill is a dollar of tax per $1,000 assessed value. For a house worth $250,000, an increase of one mill would mean an additional $250 a year in taxes. For some owners, those added costs are making it harder to afford their properties. Mark Schinzel, a local realtor and CEO of We-Buy-Property.net, a property investment firm, said he has seen more people selling property because of tax increases. “We see more financial problems,” Schinzel said in an interview. “When I started in this business in 2018, we’d hear from a property owner say, ‘I’m selling because I’m getting divorced or a loved one passed.’ Now it’s ‘I can’t afford this house.’
Some residents say that county officials should cut spending rather than raise taxes.On June 8, at a planning meeting of the Pine-Richland School District, local resident Kathleen Ravotti urged officials to pay more attention to taxpayers, a complaint she echoed in a brief interview with The Center Square.“These taxes are ridiculous,” she said. “Officials need to right-size the district instead of paying for new programs.” The complaints are less about tax hikes scheduled to take effect this school year than the cumulative weight of previous property tax increases and rising living costs.Hidden costsDespite their frustration, homeowners and landlords have not coalesced into organized opposition to the property tax hikes.Benz is familiar with the problem. He is also president of the Active Community of Real Estate Entrepreneurs of Pittsburgh, an association for local landlords, property managers, and investors.“Some people,” he said, “don’t want to cross the government.” Instead, residents interviewed by The Center Square described quietly absorbing the higher costs, delaying repairs, considering selling property or passing expenses on to renters. “When property taxes go up, they’re not raising rates just on homeowners but renters, too,” Benz said. “Landlords pass on their costs to renters.”
