Bellevue tax cut questioned

A proposal by new Bellevue Council president Tom Fodi to re-open the borough’s 2018 budget and decrease the property tax millage rate received a lukewarm response from many of his colleagues on council during Tuesday’s pre-council meeting.

Fodi noted that the borough has had a year-end surplus of around $250,000 each year for the past few years. He suggested eliminating that by decreasing the property tax millage rate by a half mill, from 4,89 to 4.39.

Bellevue’s borough millage rate is actually on the low end when compared to the rates in other municipalities. Locally, Emsworth charges 3.9 mills and Ben Avon’s rate for 2017 was 4.38, while Ben Avon Heights levies a tax of 7.9 mills, and Avalon’s millage rate is 9.83.

The major difference between taxes in the local communities is the rate imposed by the school districts. While Avonworth’s millage rate is 18.67, Northgate’s is 24.7867.

Council member Linda Woshner said that while a tax cut always sounds good in the short term, council needed to look further down the road at the major infrastructure maintenance and repair projects that will have to be funded. The borough already is aware of six-figure projects at West and East Bellevue stations, Woshner said, and the state and federal stormwater mandates will soon be added to the sanitary sewer mandates already being addressed by the borough. In addition, she said, the borough needs to continue repaving and maintaining its streets. If anything, Woshner said, Bellevue should increase its reserve funds for capital improvements instead of cutting the budget surplus that will pay for the work.

Council member Val Pennington pointed out that the cut proposed by Fodi would actually have little impact on property owners, but could come back to haunt the borough when the bills for capital improvements come due. He noted that the owner of a $200,000 home would save about $100 per year with the cut, while the owner of a property assessed at $100,000 would realize a savings of about $4 a week. Was that worth eliminating a street project, he asked?

Council member Anya Pikul said that she agreed with Pennington, while Anthony DiTullio noted that the borough is currently carrying $5 million in bond debt, and should not be cutting taxes until that debt is eliminated. Council member Tom Hrynda said that the problem was with Northgate’s high millage rate, and it was unlikely to come down. As for Bellevue’s millage rate, “I think we should leave it alone,” Hrynda said.

About the only support for the proposal came from council member Jodi Hause, who said that she had purchased a home in Bellevue five years ago. Soon after the sale, she said, the assessed value of the property was increased to reflect the purchase price, rather than leaving it at the lower value assessed prior to the purchase. Allegheny County assesses properties at fair market value. Hause said that a lower tax rate would encourage more people to buy homes in Bellevue.

Woshner, however, said that home sales in the borough have been brisk, but that many real estate professionals expect that bubble to burst precisely because new home buyers are paying much higher than the assessed value of a property, and when the assessment is changed to reflect the new market value, the homeowners find out they can’t afford to pay taxes at that rate.

Council took no action on the proposal.