No reassessments bring stability? It’s a shibboleth
Elected officials say the darnedest things. Witness Allegheny County Chief Executive Rich Fitzgerald’s defense of the indefensible in his Oct. 11 budget address to County Council.
The ACE touted a budget that holds the line on taxes but increases spending. That’s possible, Fitzgerald said, because of “robust construction” in the county and higher drink and sales tax revenue.
But then he noted how Allegheny County does not conduct annual property reassessments. “I think it gives folks the confidence there’s stability in our real estate taxing system.”
Sorry, but no.
In actuality, a lack of regular assessments creates uncertainty and instability in the real estate taxing system.
And let’s not forget gross inequities in which some higher-end properties are assessed lower than they should be and some lower-end properties are assessed higher than they should be. Those of lesser means subsidize those of greater means.
Worse, and as Allegheny Institute scholars detailed (in Policy Brief Vol. 17, No. 11) those growing inequities could result in a new, and expensive, round of court challenges.
“As the years go by and property values increase at very uneven rates in different areas of the county, the problem created by inequitable assessments that led to court-ordered reassessments in the past inevitably arises again,” researchers Eric Montarti and Jake Haulk noted in March.
While the ACE often has declined to push for a reassessment (the last one was five years ago, court-ordered, as was the one prior), claiming that property owners will be saddled with much higher tax bills, an institute op-ed, also in March, characterized that plaint as “a red herring fished in the deep waters of politics.”
To wit, a few years back, during a meeting with editors and reporters at the Tribune-Review (where, at the time, I served as director of editorial pages), Fitzgerald laughed off a question if a reassessment might be forthcoming. The clear implication was, in his intonations, that it would be political suicide.
But, and simply put, Montarti and Haulk remind that windfall limitations imposed by the commonwealth would prevent the kind of massive tax-increase Armageddon that pols typically claim comes with property reassessments.
“Only properties with market values that have increased faster than the average rate will get hit with substantially higher taxes,” they noted. And some properties with slow or no increases in value will see taxes fall post-reassessment.
All misguided local anti-reassessment stratagems aside, the state Legislature has been a recidivist hand-sitter on the issue. And that’s a dubious public policy considering the current system most assuredly is a violation of Article VIII, Section 1, of the Pennsylvania Constitution:
“All taxes shall be uniform, upon the same class of subject, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.”
Almost all states require regular assessments. And as Montarti and Haulk further noted last winter, those states have far less controversy and upheaval over assessments than in Pennsylvania, in general, and in Allegheny County, in particular.
Back to Fitzgerald’s statement. A lack of annual, or regular, reassessments “gives folks the confidence there’s stability in our real estate taxing system,” he says.
Perhaps for the ignorant. Perhaps for the poli-connected. Perhaps for those who pay less than they should for their real estate taxes.
But for those paying more than they should — and for taxpayers at large who will have to foot the bill for the next legal challenge to rectify such an inequitble system and the court-imposed remedy that is sure to follow – such “confidence” and “stability” is a shibboleth, a most vile economics lie.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (firstname.lastname@example.org).