Here is a recent
story looking at how Detroit’s property tax is hurting its economic prospects.
From The Detroit News: Orr seeks to lower Detroit's property taxes to attract residents
beliefs to the contrary, the Pittsburgh School District's property tax rate is not high
relative to many other districts in Allegheny county. (13.92
mills) In fact one of the city’s immediate neighbors, the Wilkinsburg SD , has one of
the highest property tax rate sin the state (school
district: 36.67 mills). Yes, I know there is a higher income tax rate, but hold that thought for just a minute.
Now go read a story I meant to get back to is this in PG (May 31) : Ferlo hosts talks on 'unsustainable' Wilkinsburg education. Read the reaction Sen Ferlo got when he merely suggested the
possibility that it is worth thinking about the Wilkinsburg school district being merged into the
Pittsburgh School District. This is to a crowd in
Wilkinsburg, not the city of Pittsburgh.
They don’t like the idea and it took a bit of political courage to even
float the thought. It's a lot more painful than crazy bloggers suggesting such things. I suspect he knew the response he would get.
What I wonder about is whether anyone has
pointed out just how much $$ the residents of Wilkinsburg would save if indeed
they merged the municipality with the city of Pittsburgh. You might think that the prospect of lowering property tax rates by over 62% would at the very least not be frowned upon.
How much $$ does this really work out to? So using the market valuation that correlates to those millage
rates… Wilkinsburg has approximately $358
million in taxable property value. Going from 36.67 to 13.92 mills would save Wilkinsburg residents a fair bit. Potentially as high as $8 million annually (36.67 - 13.92) mills * $358 million.
To complete the calculation you at least need to add the additional income tax you get hit with as a city of Pittsburgh resident. Wilkinsburg SD collects a 0.5% earned income tax, while the Pittsburgh SD collects 2%. If Wilkinsburg collects on the order of 870K in earned income tax now (on par with that the borough of Wilkinsburg gets from its own 0.5% income tax), it would go up by roughly $2.6 million to approx. $3.5 million. Still seems like a good financial deal. The benefits go beyond the first order calculations of course. You just have to believe the high property tax rate is pushing down investment and keeping real estate values low. Might real estate values jump quickly if property tax rates dropped so much? Could be quite an equity windfall being passed up as well.
What it all gets to is just how much people don’t like any
hint of school district consolidation. Folks are clearly willing
to vote with their pocketbooks and pay the price of staying separate. Thus whenever you see the argument that
regionalism leads to efficiency, it may be true, but equally discounted by many voters out
there. You need to go beyond the
financial if you want to make the case for anything like this.