Friday, November 08, 2013

Reassessment math forever

Some curious story to me today on city of Pittsburgh finances:PG:  Pittsburgh property tax revenue fails to reach projections. Trib: Pittsburgh tax revenue off by millions, hike possible

So the story goes that in the current FY/CY 2013, there may be a shortfall in real estate tax collections on the order of $3.5 million, and the story makes it sound like it has something to do with reassessments?  Write that number down and keep reading.

In FY2012 (i.e. the previous year before any impact of assessments), the projected revenue for current year real estate taxes was $130.578 million, but the city only collected $126.821 million in the end. So a shortfall of several million that could not have been attributed to reassessment math? (table 10, page 115 of the city's CAFR).  My quick math there says the shortfall last year was over $3.75 million, which is actually a bit higher than the projected shortfall in the story today for FY2013.  Did anyone think of writing a story like this at the end of FY/CY 2012, let alone with data only from mid-year?  Curious.

Anyway, is there a reassessment math story here?  or is the story that they expecting to come in coming in closer to the projections than they did the very previous year?

There is technically this issue of delinquent collections which is another line in the budget, but those show even more volatility over the last decade, and even more discrepency with regards to projections, all having nothing to do with reassessments by definition.  The point is the discrepency between projections and collections  last year is right in line with the numbers in today's story, actually less right now.  So the implied causality with reassessments is a more than a stretch.  Maybe they were more or less aggressive with collecting delinquent taxes?  Maybe there were more or less delinquent taxes to collect upon?  We all know there is a lot of new redevelopment of formerly dead parcels going on? Maybe that is the story?


Anonymous Michael Lamb said...

Good pick-up. But more a reflection in a change in the way budgeted revenues were recorded. We should add a footnote to that table. The budgeted number for 2012 is a projection of all taxes collected so includes the prior year collection projections. We will make the change in future cafrs. Current year budget projections for 2012 were actually $128,770,493. Still more than the $126,821 million actually collected but not as big a shortfall.

The problem is that in 2013 it appears we will collect closer to $120 million. I do think that can be attributed to the assessment.

The budget office made it very clear that they were being very conservative in their estimates of the impact of the assessment and the millage reduction/homestead exemption increases and that it might result in a better than anticipated windfall for the taxpayers.

Hard to argue now that city leaders weren't forewarned.

Friday, November 08, 2013 1:54:00 PM  
Blogger C. Briem said...

Thanks for all that.

I'll note that the CAFR table I reference does appear to have seperate budgeted and receipt #'s for delinquent taxes in 2012. In fact, it looks like in 2012 actual delinquent tax collections came in well above projected ($5.5mil vs. $3.5mil). So if the $126 million number is actual a sum of current and past year collections.. then the shortfall in last years current year tax revenues is much higher than 3.75 million. Over 5.75 mil?

There is a far bigger story in this in some ways, forgetting assessments or upcoming budgets. Property tax revenue in the city of Pittsburgh has been amazingly flat over the last decade? No matter all the construction in the news, or other developments. Just an almost flat line in revenues.

Saturday, November 09, 2013 6:46:00 AM  
Blogger C. Briem said...

note why I go into that. Only current year revenues can possibly be impacted by reassessments. If there is any impact from past year (delinquent) taxes then it is not related to the tax bills this year.

Saturday, November 09, 2013 6:54:00 AM  

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