COMMON GROUND-USAPENNSYLVANIA Cities of the 2nd Class. In 1913 the Pennsylvania Legislature passed, and the Governor signed, Act 147 for the two 2nd class cities, Pittsburgh and Scranton, to reduce property taxes to a half-mill rate on buildings, to be phased in over a 10-year period. The two cities operated under a 2 mills on land to 1 mill on buildings until 1976 when Pittsburgh voters adopted a Home Rule Charter. Scranton adopted and continues to use the 2-rate property tax. In 2000, a 20-year overdue Allegheny County-wide reappraisal (property had been assessed at 20% of market value) was so bungled--especially on Pittsburgh's land values--that the Sabre firm was sued on behalf of the Pittsburgh City Controller and a number of named plaintiffs. The county then hired another firm, Cole-Layer-Trumble, to straighten out the reassessment mess. However, the embattled Council had to set 2001 tax rates in a politically charged situation and to avoid more immediate political turmoil reverted to the one-rate property tax mill rate for 2001, even though this meant higher taxes for the very poorest neighborhoods and the productive "Golden Triangle" of Downtown Pittsburgh. Since Pittsburgh went to the one-rate tax for 2001, its building permits have declined steadily. During its two-rate tax era, Pittsburgh's annual value of building permits issued greatly outpaced other northeastern cities. The Pittsburgh Improvement District continues to use a land value tax. Cities of the 3rd Class. In 1951 Act. No. 299, incorporated into Senate Bill 357, dealt with taxation and assessment of land and improvements. Thereafter, Public Law 37531 (Purdon) allowed 3rd class cities to go two-rate. Boroughs. Senator Terry Punt's 1997 SB 211, to extend the two-rate property tax option to nearly 1,000 boroughs in Pennsylvania, passed both the House and Senate and was signed into law by Pa. Gov. Thomas Ridge in Nov. 1998 as Act 108. Legislation was particularly at the urging of the Penn. State Assn. of Boroughs. Pennsylvania School Districts. In 1993 the Pennsylvania Governor signed Act 16 allowing school districts, which are coterminous with 3rd class cities, to levy heavier property taxes on land values than on building values. Eight cities qualify under this law. Thereupon, the Aliquippa School District adopted taxing land assessments at 16.3% and taxing buildings assessments at 1.1% for 1993-94. (Assessments are at 50% of current assessed market value.) NEW YORK (Amsterdam). In 1993 the New York Governor signed Senate Bill 5652/ Assembly Bill 7901, enabling the city of Amsterdam, NY to adopt a two-rate property tax bill. This followed an earlier resolution passed by the Amsterdam Common Council, which cited Section 40 of the New York Municipal Home Rule Law. MARYLAND The 1916 Act 656 allows a city to classify land separately for purposes of taxation. In a 1995 Opinion, the Maryland Attorney General interpreted the Act to grant authority for a two-tier taxation system. WASHINGTON, D.C. In 1974 federal legislation was passed permitting the City Council of D.C. to adopt site value taxation by imposing "different rates on land and on improvements thereon."
TWO-RATE CITIES, BOROUGHS AND SCHOOL DISTRICTS IN PENNSYLVANIA - 2003
The chart below lists the Pennsylvania two-rate cities. Source is the
Center for Study of Economics, 1518 Walnut Street, Suite #604, Philadelphia, PA 19102. Phone: 215-545-6004.
Email: centerforthestudyofeconomics@msn.com
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