P-G: Property tax rate expected to drop in Mt. Lebanon

Mt. Lebanon property owners could pay less in real estate taxes next year if the recommended $29.6 million municipal operating budget is approved this winter.

Manager Stephen Feller said the municipality expects the tax rate will decrease from its current 5.43 mills to between 4.4 and 4.89 mills because of Allegheny County reassessments and state anti-windfall rules, which require governing bodies to lower millage rates to reflect higher overall property values.

Read the full article:

• www.post-gazette.com/stories/local/neighborhoods-south/property-tax-rate-expected-to-drop-in-mt-lebanon-661197 (Pittsburgh Post-Gazette)

Allegheny Institute examines Mt. Lebanon School District's fiscal predicament

The Allegheny Institute released a new policy brief today. The subject? The fiscal woes of the Mt. Lebanon School District: School District Seeks Answers.

Since the brief looks into a subject both important and interesting to Mt. Lebanon residents, I'm going to reprint it below (courtesy Allegheny Institute).

Allegheny Institute for Public Policy

March 21, 2012
Policy Brief: Volume 12, Number 16


School District Seeks Answers

(March 21, 2012) — Cut personnel, raise taxes, or dip into the savings account. Those are the choices facing one of the largest school districts in Allegheny County. As the 2012-13 fiscal year approaches, Mt. Lebanon is grappling with the question of how to deal with a $2 million deficit. The deficit could increase to $3 million depending on the ruling on a grievance filed by teachers regarding retroactive benefits for substitutes who become full time teachers.

With the level of state education funding stalled, the past few years of rapidly rising costs have caught up with the District – a scenario that is likely developing in many districts. In Mt. Lebanon the trends in several key measures have definitely been unfavorable over the last ten years. Enrollment is down while employee benefits and property tax levies are up substantially.

Based on the audited financial report available on the District’s website, from 2002 through 2011 enrollment fell from 5,616 to 5,268 (-6%). Over the same period full-time equivalent employee headcount rose 3.5 percent. The categories of supervisory and student services personnel were both up 16 percent while instruction and support/administration are up 2.5 percent and 1.6 percent, respectively.

Astonishingly, the audited data show fringe benefits have jumped from $6.4 million to $13.9 million (114%) during the 2002-11 period, pushing the ratio of fringe benefits to salaries in the District from 20 percent to 34 percent in 2011. If the $1 million grievance settlement is awarded the fringe benefits to salaries ratio will almost certainly rise even further. Total outlays climbed 42 percent over the period, boosting per pupil expenditures by 52 percent. Note that from 2006 to 2011, SAT scores were flat, although still well above state and national averages.

Will the District raise property taxes? Been there and done that. Notwithstanding the County assessment freeze that was touted as a way to curb property tax increases, audited financial data show that after reducing the property tax rate from 20.76 mills to 18.12 in the 2002-03 year, Mt. Lebanon school tax millage rate was raised every fiscal year since except for 2007-08 and 2011-12. For 2011-12 the tax rate is set at 26.63 mills, almost 50 percent higher than the 2002-03 rate. By comparison, the average Allegheny County school district rate for this year is just over 23 mills according to the Pennsylvania Department of Education.

Since there was no reassessment during the period, the change in the adjusted net property tax levy – from $38.8 million in 2002 to $55.8 million in 2011 – is largely accounted for by the millage change. Meanwhile, the Municipality of Mt. Lebanon (which is geographically the same as the School District) raised its millage and the County rate was left unchanged. Thus, the property taxes paid to the District by Mt. Lebanon property owners climbed much faster than the taxes paid to the municipality or County.

To cover a $3 million shortfall, the Mt. Lebanon Board would have to raise millage by 5.4 percent on current assessed valuations, well above what is allowed by the Act 1 index. However, the reassessment coming in 2013 makes the situation more complicated. Due to the reassessment, the total assessed valuations in the District are expected to rise by 30 percent next year. Thus, the District must roll back the millage rate to hold the total tax collections at the increase allowed by Act 1 index – either 1.4 percent or 1.7 percent, depending on which index the Department of Education determines the District will use to comply with Act 1. Nothing precludes the District from raising taxes up to that index and it can seek an exception from the Department of Education to raise the millage higher. It can also place a referendum on the ballot asking voters to approve a larger rate hike. In light of all the tax increases in recent years, raising the millage any amount is highly questionable, but to ask for 5 percent higher taxes by a filing for an exception or using a referendum could ignite a firestorm of protests, especially from owners whose property assessments go up by well over the 30 percent average increase in the District.

Clearly the District is at a point of having to make some hard decisions, a situation similar to the ones facing other schools and local governments as they seek to balance the interests of taxpayers, students, and employees. That’s the Board’s job. The present situation should not come as a surprise. We noted in a Policy Brief over two years ago (Volume 10, Number 9): fringe benefits and debt service were projected to rise in a budget forecast, and taxes would rise as well. The forecast projected that state assistance would rise to more than $21 million by 2015: the preliminary budget for 2012-13 anticipates $14 million in state sources. That means state appropriations to the District would have to rise 50 percent in two years to meet the forecast from two years ago. That is quite unlikely given the state’s fiscal situation. It is possible some additional funding will be coming with much of that going to the school employees’ pension fund.

The District is hiring a consultant to look for a way to raise revenue other than from taxes. The Board might want to work with other districts to change the retirement system to a defined contribution system for new hires or unvested employees. Cutting costs should be a top priority. There is always a way to find cost reductions if one looks hard enough. Granted, union contracts and state laws can make that difficult in some areas, but if a 4 percent spending reduction cannot be found, then the Board is not trying very hard.


Jake Haulk, Ph.D., President
Eric Montarti, Senior Policy Analyst

Policy Briefs may be reprinted as long as proper attribution is given. For more information about this and other topics, please visit our website: www.alleghenyinstitute.org

If you wish to support our efforts please consider becoming a donor to the Allegheny Institute. The Allegheny Institute is a 501(c)(3) non-profit organization and all contributions are tax deductible. Please mail your contribution to:

The Allegheny Institute
305 Mt. Lebanon Boulevard
Suite 208
Pittsburgh, PA15234

New Court-Ordered Assessments for Mt. Lebanon are now online

The county has just posted to its web site the new, court-ordered assessments for Mt. Lebanon. You can search for your new assessment here: Court Ordered Reassessment Values.

Please remember that these assessments won't take effect until the 2013 tax year, at the earliest.

Also, don't freak out if your assessment is higher. Most properties will have their assessed values go up. What matters is how much yours goes up compared the community as a whole.

I hope to do a deeper analysis shortly, when I can get some more data, and then I’ll post more on how the new assessments are likely to affect Mt. Lebanon – and you. Stay tuned.

Trib: Municipalities find different ways to make ends meet

Many municipalities have opted not to raise their property taxes this year or have reduced proposed tax increases, instead turning to fees, fund transfers and other taxes to help cover expenditures.

In Mt. Lebanon, 2012 will be the first full year of collecting an $8-per-house stormwater fee initially approved as part of the 2011 budget to pay for upgrades to storm sewers, gutters and curbs. The fee is expected to raise about $1.3 million this year, some of which will go toward services tangentially related to managing runoff, such as clearing debris from storm drains, street sweeping and reconstructing curbs as part of the municipality's road reconstruction plans.

Read the full article:

• www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_775017.html (Pittsburgh Tribune-Review)

P-G: New Mt. Lebanon budget includes tax increase

Mt. Lebanon commissioners approved a $33.2 million operating budget Tuesday that increases the real estate tax rate.

The commission approved raising the rate by 0.67 mill, to a total of 5.43 mills. As the budget stands now, property owners will pay $543 next year for a home valued at $100,000, up from $476 in 2011.

Read the full article:

• www.post-gazette.com/pg/11356/1198462-55.stm (Pittsburgh Post-Gazette)

P-G: Raja got one too many tax exclusions

A homeowner in Allegheny County may receive a homestead exclusion for only his or her primary residence. For two years, D. Raja, the Republican candidate for Allegheny County executive, received the tax reduction on two residences.

His campaign said the error was the result of a miscommunication with his accountant and construction problems that had delayed his moving plans. His accountant filed the papers with the county to remove the homestead exclusion from one of his residences on Tuesday, said Mark Harris, Mr. Raja's campaign strategist.

Read the full article:

• www.post-gazette.com/pg/11159/1152093-455-0.stm (Pittsburgh Post-Gazette)

P-G: Mt. Lebanon Schools approve no-tax-increase budget

The Mt. Lebanon school board approved a district budget for 2011-12 on Monday night that includes no millage increase.

The $78.3 million budget was passed by a vote of 6-0. School directors Dan Remely, Elaine Cappucci and Larry Lebowitz were absent from the meeting, according to a news release from the district.

Board members and administrators had said in previous meetings this year that, after passing a 10.5 percent property tax increase for the 2010-11 budget last year, they didn't want to raise taxes this year.

Read the full article:

• www.post-gazette.com/pg/11144/1148821-100.stm (Pittsburgh Post-Gazette)

P-G: Mt. Lebanon School District holds line on taxes

The first draft of the Mt. Lebanon School District base budget for 2011-12 includes no millage increase.

The estimated $78.3 million budget maintains instructional programs, superintendent Timothy Steinhauer said at the school board meeting Monday night. Although the budget proposed by Pennsylvania Gov. Tom Corbett last week meant a reduction of more than $1 million for Mt. Lebanon, Mr. Steinhauer said the district had planned for a reduction in state revenue and found savings through refinancing of 2004 bonds and further cost efficiencies through recently negotiated contracts, including the teachers contract.

Read the full article:

• www.postgazette.com/pg/11074/1132133-100.stm (Pittsburgh Post-Gazette)

P-G: No big tax rate increase foreseen in Mt. Lebanon

Mt. Lebanon School District taxpayers can probably expect a small -- or no -- property tax rate increase for the next school year.

The district should be able to keep its tax rate increase for 2011-12 within the 0.37-mill maximum allowed by the Act 1 index, finance director Janice Klein told the school board Monday night.

That is her recommendation after initial budget planning for the coming school year.

Read the full article:

• www.post-gazette.com/pg/11013/1117485-55.stm (Pittsburgh Post-Gazette)

P-G: Mt. Lebanon approves tax decrease

Mt. Lebanon taxes will decrease slightly for residents after the commission passed a budget Monday night that lowers the real estate tax.

The commission voted 4-0 to pass the budget, which reduces the real estate tax rate from 4.89 mills to 4.76 mills. Commissioner Dan Miller was not present at the meeting.

The 2011 spending plan recommended by municipal Manager Steve Feller in November proposed increasing property taxes by 0.48 mills to fund the street reconstruction program.

Read the full article:

• www.post-gazette.com/pg/10348/1110636-55.stm (Pittsburgh Post-Gazette)

The Town-Hall Meeting (Updated 3)

Updated 2010-08-28 15:57: linked to the P-G’s coverage of the protest.
Updated 2010-08-28 16:04: linked to moderator Anthony Moretti’s post on the meeting.
Updated 2010-08-28 16:34: linked to LeboCitizen.com’s audio recording.


Protesters gather outside of the municipal building


Panel members (left to right) James Fraasch, Matt Kluck, Eleanor Carpenter, and Frank Gamrat. (Moderator Anthony Moretti not shown.)

From 9:30 to 11:00 AM on Saturday, 28 August, 2010, a group of about 80 people filled the Mt. Lebanon municipal chambers for an invitation-only meeting styled after a town hall. The topic: the Mt. Lebanon economy and taxes.

Protesters were gathered outside, apparently under the impression that the meeting was some ploy to stop the high-school project. (The project was mentioned only briefly during the meeting and, even then, was described as mostly a done deal.)

Inside, a panel of four was presented to the community as having insight into different aspects of Mt. Lebanon’s economy. The panel members were James Fraasch (school-board director), Matt Kluck (municipal commissioner), Eleanor Carpenter (real-estate agent), and Frank Gamrat (economist and senior research associate for the Allegheny Institue). All panel members said they were offering their opinions and not acting in any official capacity. Anthony Moretti moderated the discussion, presenting questions from the audience and keeping the conversation moving.

The meeting was recorded and, I understand, will be viewable online early next week. (You can listen to it right now, thanks to the audio recording at LeboCitizens.com.)

If you want to know what happened at the meeting – or what all the fuss was about – I encourage you to watch the recording. My guess is that you will find it both informative and uncontroversial.

In any case, Matt Kluck, who expressed surprise at the large turnout, said he wants to hold at least one more of the town halls. Next time, he said, it would be in a venue large enough to hold everybody who wants to attend.

Read more:

• Mt. Lebanon residents protest commissioner's meeting (Pittsburgh Post-Gazette)
• Open or closed? (Anthony Moretti’s blog)

Mt. Lebanon School Taxes To Increase

Mt. Lebanon residents can expect to see a 10.5 percent increase in the school tax rate after the school board passed a $79.36 million budget Monday night.

The 2010-11 budget's tax rate of 26.63 mills is an increase of 2.52 mills over the current year's spending. Of the 2.52 mills, 2.16 mills are to cover the $69 million bond issue for the planned $113.3 million high school renovation, and 0.37 mills are to cover increased pension fund responsibilities. The base budget went down 0.01 mills.

Read more: www.post-gazette.com/pg/10145/1060601-100.stm

Read more: www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_682782.html

Mt. Lebanon School Board OKs Budget, Tax Increase

The Mt. Lebanon school board approved on Monday a proposed $79.5 million final budget with a millage rate of 26.69 mills, an increase of 2.58 mills from the 2009-10 budget.

The board passed the budget by a vote of 6 to 3, with board members James Fraasch, Faith Ann Stipanovich and Dale Ostergaard dissenting.

The millage rate hike represents a 10.7 percent increase in property taxes. The increase of 2.58 mills included a 2.16 mill increase resulting from a $69 million bond issue for the proposed $113.3 million high school renovation, a .37 mill increase for pension responsibility increases and a .05 mill increase for operating expenses in the base budget.

Read more: http://www.post-gazette.com/pg/10110/1051896-100.stm

Allegheny Institute: Mt. Lebanon School Taxes Becoming “Nightmare”

The newest policy brief from the Allegheny Institute For Public Policy is about a topic of frequent interest in Mt. Lebanon: school taxes. According to the brief, the effect of upcoming taxes on homeowners will be staggering:

In this budget forecast scenario a Mt. Lebanon household with the municipality’s 2008 median income of $77,167 and owning a home with the median value of $190,000 – that is correctly assessed – will see school real estate taxes go from the current $4,580 to $6,437, assuming the home’s assessed value stays at its current level. This will be accompanied by a $385 per year earned income school tax, more if the household is fortunate enough to have its income increase over the next five years.

Then there is the earned income tax paid to the municipality along with property taxes to the municipality and county: another $2,400 per year – assuming municipal and county tax rates do not rise. In sum, under the projected tax increases the owner of a median value house could be facing well over $9,000 in local taxes each year by 2015.

The full brief is available to the public: Mt. Lebanon Schools Becoming a Taxpayer Nightmare (PDF)

Read More:

• Future finances concern Mt. Lebanon resident (Pittsburgh Tribune-Review)
• School taxes increase 3.41 mills (Pittsburgh Post-Gazette)

Updated 2010-02-18 08:13 to include Read More section.
Updated 2010-02-18 17:21 to include link to Post-Gazette coverage of school taxes.

Districts Struggle To Fund Schools

Across Allegheny County, districts cited their 2009-10 budget year as one of the most difficult to balance. Mt. Lebanon officials approved a small increase this year -- $30 on a $100,000 home, equaling a 1.26 percent hike -- but the district's projections for the next five years are much more foreboding.

Jan Klein, director of business services for Mt. Lebanon, which is preparing to build a new $100 million high school, said school taxes could rise 19 to 45 percent by the 2014-15 school year in a worst-case scenario. Not all of the increase is tied to the new high school. Typical operating costs, such as teachers' pensions and how the district will pay for them, are responsible for a portion.

Link: www.pittsburghlive.com/x/pittsburghtrib/s_633297.html

Tax Picture Gloomy In Tough Economy

"The stew is going bad, because of all sorts of ingredients that aren't working together," said Mt. Lebanon resident and taxpayer William Lewis.

The state shortfalls and projected increases in taxes across the board may end up driving Lewis, a 30-year resident of Mt. Lebanon, out of Allegheny County.

"We are facing a 40-50 percent increase in school taxes to pay for the $115+million high school, quadrupling of PSERS (state retirement fund) fees for schools ($5 million minimum), and underfunded municipal pension funds. There's underfunded retiree medical coverage for schools, more fees to pay for EPA sewer repairs, and the municipality is so strapped they have to borrow money to pay for street repair," Lewis said.

Mt. Lebanon parking authority can't keep up with debt payments, Allegheny County may have to reassess all properties. Now we are told the state withholding tax is going up. The average citizen cannot see any increase in services, yet all these costs keep going up and up. We were told casino revenue would lead to 'substantial reduction' in school taxes. I got a $191 reduction on a $6,000 school tax bill. That casino money was a bust," Lewis said.

Two state officials, however, say they support reductions in state spending before increasing taxes--Rep. Matt Smith (D-Mt. Lebanon) and Sen. John Pippy (R-Moon).

Link: www.thealmanac.net/ALM/Story/06-24-PA-budget-B

School Board OKs $72 Million Budget

The Mt. Lebanon school board approved a $72 million preliminary 2009-2010 budget that calls for a real estate tax hike of .3 mills.

The increase, if approved in the final budget, will mean that taxpayers will pay an additional $30 for each $100,000 in assessed value on their homes, said Finance Director Jan Klein. The new proposed millage rate will be 24.11.

Under state Act 1, which limits the amount of tax increases districts can impose, Mt. Lebanon could have raised taxes by 1 mill. The vote to approve the preliminary budget, taken last week, was 7-1, with school director Mark Hart voting against the plan and school director Ed Kubit absent.

Link: www.post-gazette.com/pg/09113/964805-55.stm

School Board Mulls Raising Taxes

School board members in Mt. Lebanon are poised to approve a preliminary budget for 2009-2010 that includes a .30 mill tax increase with cuts to some programs and travel.

This projected tax increase figure could change by the time the board approves the final budget. The preliminary budget will be on display for 30 days after April 13. The projected tax hike is .70 mills less than permitted under Act 1.

Act 1 is a state law which outlines a process school districts must adhere to if they plan to increase taxes beyond pre-set limits. The law aims to ease the financial burden for home owners by providing school districts the means to lower property taxes, especially senior citizens, via the funding provided by gaming revenue.

Link: www.thealmanac.net/ALM/Story/04-15-ML-school-budget-B

School Board Preps For Tax Hike

School board members in Mt. Lebanon have begun the process of seeking a tax increase for 2009-2010 beyond that which is permitted by Act 1, the state Taxpayer Relief Act.

While the move doesn't preclude the school board will follow through with such a hike, it leaves the option open which is what the board wants, said President Alan Silhol. Act 1 outlines a multi-step process school boards must follow if they wish to raise taxes beyond pre-set limits.

Governor Ed Rendell (D) signed the Taxpayer Relief Act (Act 1) into law on June 27, 2006. Mt. Lebanon agreed to abide by the law, which aims to ease the financial burden of home ownership by providing school districts the means to lower property taxes to homeowners, especially senior citizens, via the funding provided by gaming revenue.

Link: www.thealmanac.net/ALM/Story/01-28-ML-referendum-exmpt-B

Officials Want Solution To Keep Tax Rate Steady

Officials in Mt. Lebanon are trying to find creative solutions to make up for dwindling revenues, but some residents are unhappy with the budget cuts recommended by municipal administration.

If commissioners in Mt. Lebanon on Dec. 15 approve the proposed 2009 budget, the municipality will be one of few in the South Hills which holds the line on taxes.

Both Bethel Park and Upper St. Clair have already announced property tax hikes as high as 30 percent for 2009.

Link: www.thealmanac.net/ALM/Story/11-19-ML-budget-issues-B