Pittsburgh Controller Michael Lamb said city tax revenue in 2018 is lagging behind 2017 because of a half percent increase in Pittsburgh’s real estate transfer tax, but the mayor’s office described his mid-year financial report as “unfounded criticism.”
Lamb, who discussed city finances with reporters, said realty transfer tax revenues are underperforming by about $3 million compared to 2017.
He said the city has collected about $6 million through June from the deed tax compared to about $9 million at the same point in 2017.
“The increase to the tax has done what we expected it would do,” Lamb said Wednesday. “It’s had a chilling effect on real estate transactions.”
Tim McNulty, spokesman for Mayor Bill Peduto, said Lamb’s numbers were skewed.
“The mayor is doing the right thing by prioritizing the funding of affordable housing,” McNulty said. “Furthermore, the data doesn’t back the controller’s assertions. In the first five months of this year, there were more deed transfers than there were in 2017. If the total transfer tax revenue collections are down, that is just due to there being smaller big-ticket property sales than at the start of last year. We expect that to change by the end of the year and have the transfer taxes come in on budget.”
Pittsburgh City Council in December approved the increase in two phases by a half percent. It jumped from 4 percent to 4.5 percent in February and will increase to 5 percent in January 2020. Pittsburgh is funneling the money into a trust fund to build housing and rehabilitate older homes for those who qualify under low-income standards.
Lamb said many of the real estate sales happened in January and speculated that owners were scrambling to complete sales before the tax became effective on Feb. 1.
The controller’s office also released the City’s Popular Annual Financial Report for 2017, a condensed version of Lamb’s Comprehensive Annual Financial Report, which details city revenues, expenditures and assets for 2017. Both reports are available on the controller’s website http://pittsburghpa.gov/controller/controller.html.
Bob Bauder is a Tribune-Review staff writer. You can contact Bob at 412-765-2312, email@example.com or via Twitter @bobbauder.