A controversial tax on billboard advertising in the City of Pittsburgh was approved by city council this month, although Pittsburgh Mayor Luke Ravenstahl did not sign the bill.
The tax will generate between $2 and $4 million per year for the City of Pittsburgh, according to the Pittsburgh Post-Gazette.
“Billboards in the city pay a fraction on the dollar of property taxes compared to what the average homeowner pays,” councilwoman Natalia Rudiak told Dormont-Brookline Patch. “Billboards are very, very profitable for advertising companies, who own property in the city, but the city doesn’t see that profit.”
Rudiak, whose district includes Brookline, and Pittsburgh Council President Darlene Harris proposed the tax in September on outdoor advertising—mainly, billboards—as a way to hold multi-million dollar billboard companies accountable for the city services that enable their profits.
“With billboards, it’s all about location,” Rudiak said. “The companies are setting billboards up on the sides of our roads and charging advertisers. The only reason they are valuable is because they are alongside roads and streets that are paved, plowed and policed by city residents.”
Ravenstahl did not need to sign the bill for it to be passed, and the tax will be effective in 2013. Rudiak said the city of Philadelphia passed a similar law about two years ago, for similar reasons.
The tax would provide vital funding for the city’s police department, Rudiak said. Tax money would pay for City of Pittsburgh police cars, which, according to the Pittsburgh Council District 4 website, must be replaced regularly at a cost of $2 to $3 million per year.
Lamar Advertising Company, the main supplier of billboard advertising in the Pittsburgh area, responded to the tax proposal in October by using its own billboards to advertise against Rudiak and Harris. The billboard against Rudiak claimed simply that she wanted to raise taxes, but did not specify what the tax was for.
Jonathan Kamin, attorney for Lamar Advertising, told Dormont-Brookline Patch last month that if the tax was approved, it would negatively affect numerous businesses in the Pittsburgh area, including Lamar.
Kamin said the tax ultimately would be a tax to the user, since the tax would be initially be collected by the advertising company at the time of the sale.
Billboards are considered personal property under state law, so billboard companies don’t pay property taxes on the signs. But Kamin said Lamar still pays real estate tax on the property—mainly vacant land, he said—that the company owns.
He said Lamar pays between $50,000 and $80,000 a year in taxes to the City of Pittsburgh, and also pays an additional $60,000 per year in permit fees.
Kamin did not respond to an interview request regarding the vote prior to the publication of this article.