Rivers Casino wins its tax appeal: what is the effect?

As mentioned in two 2021 Policy Briefs (here and here) the Rivers Casino appealed its assessed value due to the impact of the 2020 coronavirus shutdown.  The casino, like others in the state, was closed from mid-March through May 2020 and began reopening in June.  There was a second closure in December of that year.

Its appeal was heard by Allegheny County’s Board of Property Assessment Appeals and Review (BPAAR), which made no change to the casino’s assessment of $245.9 million (the highest assessed value for an individual parcel in the county). As a result, the owner-initiated appeal proceeded on to the next step, the Board of Viewers (BOV).

As reflected on the county’s assessment website, the casino’s assessed value has been reduced to $221.4 million, or 89.9 percent of its previous assessment.  The county’s common level ratio for appeals filed between July 1, 2020, and June 30, 2021, was 87.5 percent.  

Unless there is a taxing body appeal of the BOV-approved change, or there is a countywide reassessment, the $221.4 million value will be in place for the foreseeable future.

What does the change mean for the county, City of Pittsburgh and Pittsburgh Public Schools, which apply property taxes to the assessment?  Based on millage rates that are in place for 2022 (23.79 mills combined, including special levies for parks and libraries and PPS’ increased rate), a $245.9 million assessment would produce a total tax bill of $5,852,196.  

At the new reduced assessment, the total tax bill would be $5,267,262 million a year, resulting in a reduction of $584,934. 

Can the taxing bodies absorb the decline?  As has been noted, appeal activity in the county is very steady, and, on net, appeals brought by taxing bodies outpace those brought by owners, which raises assessed values. Countywide, taxable value increased from $82.6 billion to $84.4 billion (2.1 percent) from 2021 to 2022.  Pittsburgh’s taxable value also grew in that time frame, from $19.9 billion to $20.3 billion (1.8 percent).  Both taxing bodies budgeted an increase in property tax revenue for 2022.  The change in assessment does not affect the host fees paid by the casino to the county and city

As new data on appeals heard by BPAAR become available, the impact of COVID on owner-initiated commercial tax appeals due to loss of tenants, less need for space and changing work patterns, will be clearer.  And as the years roll on, the county’s 2012 base year will grow older and the need for a new, and more frequent, reassessment of values will become even more apparent.

There are three, possibly four, counties that are in the process of updating values, including one that has a base year from the 1970s.  This is an area where Pennsylvania is out of step with best practices