Allegheny County 1.7 mill property tax hike passes by narrowest margin

Allegheny County Council ended a two-month budget stalemate Tuesday, voting to raise the county property tax by 1.7 mills, or $1.70 per $1,000 in assessed value, to fund a $1.17 billion operating budget for 2025.

The budget, which gained the approval of the bare minimum 10 out of 15 council members required for passage, is a compromise between County Executive Sara Innamorato’s initial proposal which raised spending further with a 2.2 mill tax increase, and last week’s counterproposal from council members that would have raised taxes just 1.35 mills.

“This budget is everything that we need, but not everything that we want,” Innamorato said after the vote. She said it allows the county to avoid layoffs, hiring freezes and cuts to vital programs. She pledged to “audit every dollar” spent and seek new efficiencies and modern policies to save taxpayer dollars in the future.

“But you can’t do that if you’re worried about keeping the lights on,” she said. “And if we would’ve been anything lower than the budget we passed today, we would have been in a state of austerity and struggling to maintain, and we wouldn’t have the opportunity to take time to step back and innovate.”

Councilor Nick Futules, who voted to advance the 1.35 mill proposal last week, was overcome by emotion as he explained his support for the 1.7 mill increase.

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

“I’ve been here 17 years and I think this is the most difficult thing I’ve ever done.”

Voting in favor of the budget were council members Jack Betkowski, Futules, Dan Grzybek, Bethany Hallam, Paul Klein, Michelle Naccarati-Chapkis, John Palmiere, Bobby Palmosina, Anita Prizio and DeWitt Walton. Voting against it were Councilors David Bonaroti, Sam DeMarco, Suzanne Filiaggi, Bob Macey and President Pat Catena.

DeMarco, before voting against the budget proposal, criticized the administration for not alerting council to the county’s financial challenges until October. Filiaggi said that constituents from her district who contacted her opposed the tax plan by margins of 10 or 20 to 1. DeMarco and Filiaggi are the only Republicans on council.

Bonaroti, a Democrat, said raising taxes more than necessary could cost his party at next year’s council elections, potentially leading to future regression in the funding included in the budget passed Tuesday.

Catena said this year’s budget was the “most difficult since county council was created” in 2000.

“I refuse to say that the sky is going to fall because my colleagues and I might be different,” Catena added. “We might disagree at times but we want to move the county forward.”

Tax hike seen as inevitable

Almost every party in the two-month standoff acknowledged that some level of tax increase was necessary — though most balked at Innamorato’s 2.2 mill ask, which would have increased the county’s millage rate by about 46%.

The county did not raise taxes at all during the entire 12-year tenure of former Executive Rich Fitzgerald, who governed from 2012 through 2023. This was sustainable while there were annual increases in the county’s assessed value, but the COVID-19 pandemic’s impact on commercial real estate put a stop to that, and the county found itself running a deficit in each of the past few years.

“The agreed-upon budget will begin to chip away at the fiscal challenges we inherited from the previous administration,” Innamorato said.

At-large councilor Hallam, a Democrat, said Innamorato “inherited a huge mess” from her predecessor.

“No one wants to raise taxes but we had to,” Hallam said Tuesday. “The county truly cannot operate without a tax increase this year.”

Hallam predicted that raising millage by 1.7, rather than a smaller increase, will prevent the county from needing another increase next year.

Human services funding restored

A key difference between Innamorato’s original proposal and council’s rebuttal was in the Allegheny County Department of Human Services [ACDHS] — by far the largest county department and one of the most far-reaching, providing services to the county’s most vulnerable residents.

The council counterproposal included $23 million less for that department than Innamorato’s budget, though that difference was mostly attributed to state matching funds. Of that $23 million, most would have come from state matching funds, which are provided at a 4-to-1 ratio, county budget officials said.

Some council members, including Grzybek, decried the cut, likening it to an employee leaving a generous 401(k) match on the table.

The compromise budget restores almost all of the ACDHS funding Innamorato requested.

ACDHS leadership sounded the alarm in November, warning that council falling short of Innamorato’s proposal could lead to cuts to violence prevention work, childcare services, emergency shelters, eviction prevention and more.

Catena had criticized the administration for “fear mongering” to get their budget priorities passed, pointing to an overall increase in ACDHS’ budget, though a much smaller one than was originally foreseen.

Dozens of social service providers lobbied council to restore the funding in November, and some returned on Tuesday to thank members for doing so.

Another key sticking point was how much to put into the county’s rainy day fund. After recent deficits all but drained the fund, Innamorato proposed to put $33 million away this year. The compromise proposal envisions putting $23 million into the fund.

Other features of the compromise budget:

• Almost every department will have a larger budget than in 2024, except for slight decreases for the offices of the county executive, court records and property assessments; and larger decreases for juvenile court placements and County Council
• A slight increase in Information Technology spending, down from a $4.5 million increase Innamorato sought
• A $2.5 million increase for Children Initiatives, about half what Innamorato’s budget called for
• No increase to the county’s homestead tax exemption. Innamorato’s proposal called for an increase from $18,000 to $21,000.

Charlie Wolfson is PublicSource’s local government reporter. He can be reached at [email protected].

This article first appeared on PublicSource and is republished here under a Creative Commons license.