A newspaper article over the weekend provided an in-depth and interesting take on what it means to homeowners who have their street split down the middle between two taxing jurisdictions. In this case the purpose of pointing out the split is the looming reassessment in Allegheny County, with new values expected to take effect countywide in 2013, and Butler County, which has not reassessed since 1969 (that was the last year of a full reassessment, but the County did change its predetermined ratio [the ratio between assessed and market value] in 2009).
Noting that home #1, within Allegheny County, pays more in taxes than home #2, who lives in Butler County (about $3,000 more), the Allegheny County Executive opined that by not reassessing for ten years "[Allegheny County] brought stability into the system, and people could predict what their taxes were going to be." The Executive stopped short of saying that owners could predict their taxes would be "high". Stability and predictability were two themes the Supreme Court considered before tossing out Allegheny County’s base year plan, uniformity trumping both.
With two "real world" examples-the current assessments of both homes mentioned in the piece are available on the respective real estate websites for both Allegheny and Butler counties-we can see how the current millage rates (2012 for county and municipal, 2011-12 for schools) of each county and the municipality and the school district affect each home. Keep in mind that neither property has been officially reassessed in some time (home #1 since 2002, home #2 since 1969) though home #1 should be getting a reassessment notice in the coming months.
Home #1-Allegheny County, Pine Township, Pine Richland School District
Current assessed value: $391,900 ($376,900 for County tax purposes after applying homestead exemption, and according to the PA Department of Education the average home in the school district received $200 off school taxes as a result of Act 1 gaming refunds [also a homestead exemption])
County Taxes: $376,900 x 4.69 mills = $1,763
Municipal Taxes: $391,000 x 1.2 mills = $469
School Taxes: $391,000 x 21.9084 mills = $8,566 (less $200 from Act 1) = $8,366
Home #2-Butler County, Cranberry Township, Seneca Valley School District
County Taxes: $55,480 x 23.63 = $1,299
Municipal Taxes: $55,480 x 13 = $715
School Taxes: $55,480 x 105.60 = $5,808 (less $100 from Act 1) = $5,708
The Allegheny County home is paying $3,000 more in taxes as a result of a higher County tax bill ($464) and a higher school tax bill ($2,758). The Butler County home is paying more to the municipality than their neighbor. Both are paying more than 75% of their total tax bill to fund public education.
So obviously the Butler County home, according to the County Executive, must be free from worry about their taxes. A quick look back to 2005-that’s when Allegheny County adopted its base year-shows that Butler County increased its taxes then cut them in 2009 after a change to the predetermined ratio; Cranberry increased its taxes this year, and Seneca Valley school district had increases in 2006, 2007, 2010 and 2011. It is planning an increase for the coming school year according to its preliminary 2012-13 budget.
Just down the street in Allegheny County, home #1 will see a higher County tax bill this year as a result of the millage hike; his municipal taxes have not changed since 2005; and his school tax bill went up in 2010 and is expected to go up again according to the preliminary 2012-13 budget. Home #1 might see a tax cut when rates rolled back once the windfall provisions are applied and the new values go into effect.
Can we once and for all stop the talk that reassessments lead to tax increases? There is enough hard evidence of tax increases happening without them to believe otherwise.