Three takeaways from this story:
- If Wilkinsburg is annexed by Pittsburgh, the Wilkinsburg School District would be absorbed by Pittsburgh Public Schools and residents would pay the much lower Pittsburgh school property tax millage.
- Home value reassessments are possible on a case-by-case basis but a sweeping, boroughwide reassessment is unlikely.
- Annexation would greatly reduce Wilkinsburg residents’ property taxes, but their income and deed transfer taxes would increase. This could cause an overall tax increase for renters.
Wilkinsburg’s unusually high property tax rates have long been a pain point for its residents. A local group focused on economic development is pitching annexation of the borough into Pittsburgh as a solution to that.
While there are many complex issues to sort out when weighing annexation (municipal employee contracts, schools, development and zoning to name a few), it is clear that Wilkinsburg residents’ property taxes would drop significantly if it happened.
Much of the reduction would be caused by the Wilkinsburg school district being absorbed into Pittsburgh’s school district — which four local lawyers and others involved in the process told PublicSource is a legal certainty if annexation takes place.
PublicSource took a closer look at local tax obligations to find out how they might change for Wilkinsburg residents if the push for annexation is successful. Property taxes would decrease significantly, but income taxes would rise from 1% to 3%. Just 35% of Wilkinsburg housing units are owner-occupied, and the property tax savings would not directly flow to the borough’s many renters.
Which rates apply?
Property tax rates have three components, each set independently: the county rate (the same for every homeowner in Allegheny County), the municipal rate and the school district rate.
Wilkinsburg homeowners pay 48.23 mills, or $48.23 in taxes on every $1,000 of their property’s assessed value. So if a resident’s home is valued at $100,000, they would owe $4,823 in property taxes each year.
That $48.23 includes $4.73 for Allegheny County, $14 for the borough of Wilkinsburg and $29.50 for the Wilkinsburg School District.
In Pittsburgh, homeowners pay 22.74 mills, or $22.74 per $1,000 of assessed value. Pittsburgh’s rate includes the same $4.73 to the county, $8.06 to the city government and $9.95 to the city school district. The biggest difference is that the Pittsburgh Public Schools’ tax rate is about a third of Wilkinsburg’s.
So how would Wilkinsburg’s tax rates change to match Pittsburgh’s if the borough is annexed?
There’s no question that if Wilkinsburg is annexed, its residents would begin paying Pittsburgh’s municipal property tax rate. That change alone would bring Wilkinsburg’s 2021 rate down from 48.23 mills to around 42.
While there’s a lack of local precedent, lawyers told PublicSource that annexation would cause the Wilkinsburg school district to immediately be folded into Pittsburgh Public Schools and, therefore, change to paying the Pittsburgh district’s much lower tax rate.
“There’s a lot of unanswered logistical questions, but one thing is very clear,” said Ira Weiss, a longtime municipal and education lawyer. “If this annexation is approved, the Wilkinsburg School District automatically becomes part of Pittsburgh’s. That’s very clear.”
Weiss represents the Pittsburgh school board but said he was not speaking on its behalf for this story.
School districts in Pennsylvania are sorted into classes based on population. A 1949 state law establishes that when an area with a school district of Wilkinsburg’s class is annexed into a territory of Pittsburgh’s class, the smaller district automatically becomes absorbed into the larger one.
While there may not be any case law using this statute in Allegheny County, a 1953 court case in Dauphin County appears to show a similar situation. In it, a state court ruled that because Lackawanna Township voted to be annexed into the city of Scranton, its school district would follow suit.
Wilkinsburg Mayor-elect and current school board member Dontae Comans, who has so far remained neutral in the annexation debate, said he views the law the same way.
Wilkinsburg’s middle and high school students already attend Pittsburgh schools through a partnership that dates to 2016. The Wilkinsburg School District pays the Pittsburgh district for each student attending city schools.
Currently, nearly 500 students attend Wilkinsburg schools.
Could there be reassessment?
Some in Wilkinsburg fear that their property’s assessed value would be raised if annexed by Pittsburgh, potentially resulting in even higher taxes than before.
Outgoing Pittsburgh Mayor Bill Peduto raised some eyebrows in June when he told WTAE that Wilkinsburg’s property values would have to be reassessed if the borough is annexed.
“I can’t speak to why the mayor would say that, but it’s not correct,” Weiss said. “The reassessment is a county function and the only change will be how the millage is applied. It would have nothing to do with assessments.”
E.J. Strassburger, a longtime local lawyer in commercial and municipal law, also said Wilkinsburg can’t be reassessed outside of a countywide reassessment. Taxing bodies, like school districts, and homeowners can appeal for a spot reassessment of an individual home.
How does the annexation process work?
There are three legal steps: petition, Pittsburgh council approval and Wilkinsburg voter approval
Step one: The Wilkinsburg Community Development Corporation, which is leading the annexation effort, will collect the needed 638 signatures and submit the petition to the Court of Common Pleas.
Step two: If the petition is deemed valid by the court, the matter is sent to Pittsburgh City Council for consideration. At least five of the council’s nine members would need to approve annexation for the process to go any further.
Step three: If Pittsburgh’s council approves, the Wilkinsburg voters will have the final say. Depending on the timing of the first two steps, this could be on the ballot in the May 2022 primary election.
A countywide reassessment is possible, but County Executive Rich Fitzgerald fought court orders to enact the last one in 2013 and has announced no plans to do another one. He will be in office until the end of 2023.
Even if Wilkinsburg’s values were reassessed after an annexation as Peduto suggested, Philadelphia-based tax lawyer Stewart Weintraub said assessments likely wouldn’t skyrocket simply because of the new municipal lines. He said assessors use comparable sales to appraise residential property “almost exclusively,” and that the process gives more weight to comparable sales near the property in question.
“Post-annexation, are they going to be looking at expanding the inventory of sales that they can use as comparable sales? They could,” Weintraub said, “But the bottom line is that the best comparable sales of residential properties within the borough are going to remain the same after annexation.”
Could Pittsburgh’s rates rise?
If Wilkinsburg residents eventually begin paying property taxes at the same rate as Pittsburgh residents, there’s still a chance that those rates could go up for everyone involved.
“The Pittsburgh school district is going to be absorbing greater costs,” Weintraub said, “and whether or not the tax base in Wilkinsburg is going to be sufficient to cover those costs, I don’t know.”
It's highly unlikely for the rates to go up to match present-day Wilkinsburg levels, though. Annexation would grow the city’s population by less than 5% and would add fewer than 1,000 students to a district with more than 21,000.
Weiss pointed out that annexation could increase school transportation costs for Pittsburgh Public Schools because school districts must provide transportation to charter and private school students 10 miles beyond municipal borders, and Wilkinsburg would extend Pittsburgh’s border further east. He did not estimate how the cost increase could impact taxes.
Other taxes
Comans noted that many Wilkinsburg residents aren’t homeowners and, therefore, would see no direct benefit from decreased property taxes. They would be subject to some other changes.
Renters and homeowners alike would see their municipal income taxes go up if the borough joins Pittsburgh, from 1% to 3%. But they would stop paying a $200 annual fee to the borough for trash and recycling collection. The deed transfer tax would rise from 1% to 4%.
Pittsburgh’s $52 local services tax would simply replace a similar one that now exists in Wilkinsburg.
Business owners would also be subject to Pittsburgh’s 0.55% tax on payroll costs.
Those who favor annexation face a long process, with months of public meetings and questions about key issues, and the challenge of getting a petition, Pittsburgh City Council vote and referendum vote all passed. If it does go through, it will be a historic moment for the region, and leaders won’t be able to rely on precedent to make decisions.
“I don’t think anyone in Allegheny County is an expert on municipal annexation or mergers,” Strassburger said. “We still have 130 municipalities here.”
This story was updated to include more context in the introduction.
Charlie Wolfson is PublicSource’s local government reporter and a Report for America corps member. He can be reached at charlie@publicsource.org and on Twitter @chwolfson.
This story was fact-checked by Amelia Winger.
This story was made possible with financial support through the American Press Institute.
