It’s Like 2005 All Over Again

Yesterday Judge Wettick essentially said "keep going, but let’s slow down" when he allowed for a one year delay in the implementation of the 2012 assessed values until 2013. The ruling dealt with the Pittsburgh Public Schools-the district that was moved to the front last year so that the budget and tax rates would be ready to go based on the 2012 assessments-but by extension would have to affect all districts, municipalities, and County government going forward.

That means the 1 mill increase by the County and any other local real estate tax hikes will stay in effect since they don’t have to deal with the pesky effects of Act 71, which says millage rates have to be rolled back to be revenue neutral in reassessment years. The County Executive was partially right when he said that law "has no teeth"; it is hard to bite when muzzled, after all.

The delay means that the owners who would have seen a tax decrease-about 2/3rds of the city according to one analysis-will have to wait until next year. And those loud voices that complained about their values will have a year to appeal and absorb the sticker shock.

In other words, we have just gone back seven years in the process. From a news article dated December 27, 2004 "In 2005, though, property owners will receive their assessments a year before they go into effect. That means property owners will pay taxes on their old assessments and will have time to appeal the new ones before school districts, municipalities and the county begin using them."

In a great bit of foreshadowing the shape of things to come, the former County Executive noted that the legalization of slots for school property tax reductions was "…relief but it is not enough" and the article remarked that "large increases in valuations are expected, because three years have passed since the last reassessment." Well, now it will be been ten years-make that eleven-before new values will go into effect, if indeed they actually do in 2013. Given the ability of the County to extract concessions from the Judge, the reassessments might never happen.

Since many of the new assessed property values will reflect 2010 prices-since that was the year the process was started- by 2013 the values will already be three years old.

Millage Hike Will Tax Property Owners and Patience

On December 6th, Allegheny County Council voted to increase property taxes by 1 mill, or 21 percent, resulting in a new millage for property owners of 5.69 mills. Sadly, but predictably, this action is consistent with the disconcerting pattern of recent years wherein the Council passes illegal legislation that gets overturned in court.  


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Backpedaling on Assessment Completion Date

For those who were on the edge of their seats waiting to get assessment notices this month, the excitement will have to wait. Allegheny County won’t be processing reassessment notices until January of 2012.  Certified values for use in calculating tax bills may not be available until May or June of 2012.


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Assessment Anarchy

How else could the situation surrounding Allegheny County’s reassessment be described? We are long past "will they or won’t they". Just yesterday the court found out that the County has engaged in even more foot-dragging on his reassessment order: the chief assessment officer of the County hasn’t even read Judge Wettick’s order, written on November 10th. That same assessment officer said that he was told by his boss, the head of the Administrative Services, to ignore the plan. Upon further questioning, the department head told the Judge that he was advised by the Law Department.

That would be the same Law Department headed by the County Solicitor who told the Judge in October that "whatever the Court tells us to do, we will do". Empty words indeed, notwithstanding the fact that the County had already announced they would appeal the plan to Commonwealth Court.

So what’s next? The Judge has to do something-his order, though flawed, comes from a Supreme Court decision in April saying that the County’s base year violated the uniformity clause of the Constitution. Maybe the Judge can suspend any requirement for taxpayers to pay real estate taxes until the County commits to fixing the assessments and their solution is certified to meet acceptable standards. There has already been significant damage done to the public’s confidence in the rule of law.

Is Wettick Waffling?

"We’re here because of the Supreme Court’s mandate to me"-that’s what Judge Wettick said to legal counsel representing the County and opponents of the base year on September 15th, the first hearing following the PA Supreme Court’s April 2009 decision that struck down Allegheny County’s base year. That’s pretty strong language that one would think meant the wheels would be put in motion for fixing an assessment system declared unconstitutional by the state’s highest court.

At the same hearing, the Judge noted "Unless the parties are able to agree [on a time frame and method of reassessment], a hearing will be held" to determine how to get the reassessment completed. There was no mutual agreement, so the matter proceeded to the October 19th hearing in front of the Judge.

At that hearing, two weeks ago today, the Judge heard testimony from the County on why a reassessment would take two years and from the opposing legal counsel on why it can be done sooner rather than later.

So what’s been the holdup for the last two weeks? Consider that the Judge himself has written in previous decisions that the County should have been using the time to get resources ready for a reassessment. Why not take action on the 19th after it was clear that the County and the opposing counsel could not come together on a time frame?

Here’s a Ruling Judge Wettick Could Make

Paraphrasing the legal language, here’s what the Supreme Court of PA said in its decision on the County’s assessment last spring: the County’s base year is unconstitutional, and we hand the decision back to the Court of Common Pleas to come up with a reasonable timeframe to fix the issue. Judge Wettick is, once again, center stage on the issue. Yesterday parties to the case batted around what constitutes a "reasonable timeframe".

The County feels that the Supreme Court wanted a full reassessment and such an exercise would take two to three years to complete. The County’s former chief assessment officer-the person who once said that the updated 2005 numbers met international standards for uniformity and accuracy-said that using those numbers now would be "unacceptable". What hypocrisy! Counsel for the taxpayers who brought suit against the base year presented testimony and experts who felt the matter could be resolved in a couple of months, basically as a stopgap measure.

No ruling has come as of this writing. So here’s what we would suggest the Judge should do: tell the County that it needs to have a reassessment completed by this coming March (about the time when County real estate taxes are due) or adjust the mailing of tax notices until the reassessment is done. Corollary to that ruling, the Judge should declare that taxpayers don’t have to pay any property taxes (County, municipal, or school district) until an updated, fairer assessment is complete. This would prevent an unconstitutional collection of taxes.

A Ruling the Supreme Court Needs to Make

It has been two and half years since Judge Wettick ruled Allegheny County’s base year assessment system unconstitutional and ordered an updated assessment to be carried out. It has been six months since the state Supreme Court upheld Wettick’s decision as it applies to Allegheny County, ruling that the assessments were unconstitutional and must be updated. It has been almost seven years since the 2002 assessments were adopted for use in 2003, assessments that are still in effect and assessments the Chief Executive went to great lengths to label as incorrect. Nonetheless he chose to lock them in as the base year numbers to be used for the indefinite future.

Arguing that the 2002 numbers were okay since the appeal process had taken care of most of the problems, the Executive and County Council blithely adopted them as the County’s base year values. This action totally disregarded the huge number of under assessed properties. Obviously, people whose property was over assessed will appeal-as well as some whose property is correctly assessed in hopes of getting a reduction. But how many whose property is under assessed will appeal and call attention to their situation? Not many. So to say that appeals have taken care of the 2002 assessment problems misses the boat entirely.

The net result is that people who are over assessed or correctly assessed must pay higher than their fair share of taxes to offset the underpayments of the properties whose assessments are too low.

Here’s the problem. The Supreme Court has said the assessment system in the County is unconstitutional. But thus far, the County has dragged its heels in fixing the problem, using endless delaying tactics. What’s the Court to do? If it does not have enforcement power to see that the order to correct the problem is carried out, then someone should petition the Court to issue a ruling that unless and until the assessment system is fixed, property owners in the County do not have to pay property taxes beginning with a date certain, say tax year 2010.

Assuming, as seems likely, the Court would be inclined to rule that taxpayers are not required to pay an unconstitutional tax, the Court could use another ruling to force compliance with the earlier ruling. How would the County or any other taxing body be able to use the courts to compel people to pay property taxes in view of the Supreme Court’s ruling?

The business of elected officials ignoring or using endless delaying tactics has to be stopped if people are ever going to have respect for the rule of law. And since the judiciary must depend on the other two branches of government to abide by and carry out its decisions, when they refuse the fundamental and crucial balance of power in government is threatened. At that point the Court must assert itself as best it can. In this case a ruling that property owners cannot be required to pay property taxes until the County undertakes a good faith effort to abide by the multiple court orders that have been handed down should get the attention of taxing bodies and the County.

Continued affronts to and disrespect for the judiciary bodes poorly for the Commonwealth’s future. It must stop.