PITTSBURGH -- Balancing the city of Pittsburgh's 2004 budget could mean tax increases, and two big ones were discussed Monday at a public hearing, Channel 4's Jake Ploeger reported.

More Info Realty Transfer Taxes Tax Millages By Town

A proposal by City Council would raise the property tax from 10.8 mills to 15 mills. That would mean an additional $420 a year in taxes for the owner of a $100,000 home.

Click here to see the millage rates for the city of Pittsburgh, as compared to all municipalities in the county.

Council is also proposing a 1 percent increase, from 3.5 percent to 4.5 percent, in the real estate transfer tax. That means the buyer and seller of a $100,000 home would split an additional $1,000 in taxes.

Click here to see transfer rates for the city of Pittsburgh, as compared to all municipalities in the county.

Mayor Tom Murphy is projecting a $42 million deficit in 2004. He has said the city is already cut to the bone, but the city charter stipulates that the budget must be balanced.

"My hope is that we don't have to do either of those (tax increases), but I have to be realistic, and I think we're going to have to so something," Councilman Alan Hertzberg said.

"Are these increases going to make Pittsburgh less attractive to home buyers and homeowners? Yes," Councilman Jim Motznik said. "I can't do anything but tell you the facts. Yes."

The tax hikes may end up being passed at a lower level than is being proposed.

Council still must take a preliminary vote on the increases, followed by a final vote. If the increases are passed, they would go to Murphy for approval.

Meanwhile, a hearing on Murphy's request to classify Pittsburgh as a distressed municipality under Act 47 will be held at 7 p.m. Tuesday at the IBEW Hall on the South Side. If the state decides that such a designation is necessary, it could provide the city with several options to reduce the deficit, including a higher annual tax on suburban commuters who work in the city.