A property assessment Hydra of Lerna
No one could have foreseen such a thing. But the effects clearly could have been mitigated had sound public policy not been replaced by a toxic mixture of arbitrary and capricious decision-making and political expediency practiced by those wearing horse blinkers.
We refer to a Sunday Post-Gazette dispatch that Allegheny County “is bracing for what could be a budget-wrecking spike in property assessment appeals by hotels, shopping centers and other commercial property owners ravaged by COVID-19 — a situation that could cost towns and school districts already hit hard by the pandemic even more tax revenue.”
Simply put, government-mandated shutdowns followed by severe occupancy restrictions have devastated multiple scores of businesses, including office buildings, the P-G reports. In response to their concomitantly devalued properties, those property owners will be looking to appeal their real estate taxes.
As one would expect. And as is their right.
(The Rivers Casino, Allegheny County’s highest assessed property, appealed its 2020 assessment at the beginning of the pandemic in March, the report says.)
And all these expected appeals, should they be successful, could trigger a steep decline in the amount of property taxes collected by counties already stung by an equally precipitous drop in other non-property-based taxes. (Other taxing jurisdictions would be affected as well, such as local school districts.)
Which could trigger something that would be even more devastating for the ravaged economy: a tax increase.
The P-G reports a surge in such appeals in neighboring counties, notes how Allegheny County officials fear a “cascading effect” and that some government officials are “bracing … perhaps (for) even a renewed need for countywide property assessments once things start to return to some version of normal.”
Well, imagine that.
You’ll recall that Allegheny County has not performed what should be a regular reassessment (on, we have argued, a regular three-year basis in the least) since the courts last ordered it to do so seven years ago in 2013.
The result has been growing inequities in the assessments that has led to supposedly forbidden but now court-endorsed “spot assessments” born out of the county not doing its job. And that picking and choosing only has exacerbated the assessment process further.
The pols incessantly argue that reassessments will produce property tax sticker shock on a massive basis. While it is true that the woefully underassessed likely would see their tax bills increase as the pay their fair share, those over-assessed would see their tax bills decline as they, too, pay their fair share.
But anti-windfall measures built into the process would prevent the kind of sticker shock claimed by the pols who have shirked their responsibility.
The coming feared mess is a two-pronged, government-created Hydra of Lerner (of Greek mythology):
Had rhymeless and reasonless pandemic-spawned shutdowns not been implemented, business losses would not have been anywhere near their reported severity.
And had Allegheny County kept up with its reassessments, the property tax system would have been fair and just.
But because political leaders acted in such disregard for both, the mess is far and unnecessarily deeper, if not intractable.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (firstname.lastname@example.org).