Allegheny County Controller Corey O’Connor at a campaign press conference in December 2024. (Photo by Stephanie Strasburg/PublicSource)
Declining values on Downtown towers dragged down revenue, which is set for a boost in 2025 from a rate hike enacted late last year.
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Allegheny County’s property tax revenue declined in 2024 for the first time in 15 years, according to an annual report released today by County Controller Corey O’Connor, dragged down by falling property assessments on Downtown towers.
The county spent $45 million more than it took in last year, continuing a trend of deficit spending that compelled county leaders to pass a controversial tax hike in December.
Why is this important?
Before 2023, when a lawsuit forced the county to change how it calculates assessments, the county could count on a steady increase in property tax revenue each year. That’s not true anymore, and O’Connor warned that the 2024 tax hike is not a permanent fix.
With the federal government threatening to cut back on funding for human services, economic development, affordable housing and Medicaid, the county could lose even more money in the coming years.
Thousands of people rely on the county for behavioral health care, child care, nursing homes and more. Not to mention county parks, pools, roads and the 911 call center.
By the numbers
- $5 million: the decrease in county property tax revenue from 2023 to 2024
- $46 million: the deficit in 2024, with $966 million in expenditure and $920 million in revenue
- $2.8 million: the decrease in the county’s drink tax revenue from 2023 to 2024
What’s causing this?
In 2023, a court ruled that the county had artificially inflated property assessments, allowing property owners to appeal and, in most cases, receive lower tax bills. Owners of major Downtown commercial buildings, which form the bedrock of the county’s property tax revenue, appealed en masse and collectively received tax bills lowered by millions of dollars.
Their assessed values are being driven even further down by post-pandemic telework trends, which is driving down demand and rental prices for office space.
O’Connor’s take
“While the first millage increase in over a decade may prevent immediate service cuts in the coming year, our situation remains unsustainable,” O’Connor said in a press release.
“Neither further tax increases nor a countywide reassessment advocated by some would change the dynamic of rising costs combined with the exhaustion of federal pandemic aid and assessment reductions to large commercial properties.”
O’Connor said in the release that the solution lies in growing the county tax base through economic growth. “We must focus on fostering development … Population growth that alleviates a shortage of working-age adults can open the door to new industries.”
O’Connor may soon trade the county’s headaches for the city’s; he successfully ran for the Democratic nomination for Pittsburgh mayor and would assume that office in January if he wins the general election.
What’s next?
Residents are feeling the effects of higher property tax bills after Executive Sara Innamorato and council members enacted a 1.7 mill increase last year.
While policymakers will want to avoid asking residents for another hike in the near future, cuts to government services could be on the menu. And calls for a countywide property reassessment, while not a solution to declining revenue, could only increase. A reassessment would raise taxes on a third of property owners, decrease them for a third, and leave a third relatively steady.
Charlie Wolfson is PublicSource’s local government reporter. He can be reached at charlie@publicsource.org.
This article first appeared on PublicSource and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
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