Back in September of 2009, we noted in a Policy Brief that attempts for the Legislature to pass a law that would stop court decisions from mandating property reassessments would create "…an explosive Constitutional crisis". It seems simple: the courts would be telling a county "do a reassessment" while the General Assembly would be telling the county "don’t do a reassessment". That September mention came months after the Supreme Court ruled that Allegheny County’s base year plan violated the uniformity clause of the Constitution and remanded the matter back to the County courts.
Nearly three years later, just as the budget deliberations were wrapping up, the moratorium issue came up again and was discussed as a larger piece of legislation dealing with the agency that handles issues related to assessments. The moratorium would have applied to Allegheny and Washington Counties.
No doubt the results will be decried by officials in those two counties as well as by legislators who pushed for the moratorium. But what about the counties that are scheduled to see new reassessed values go into effect in 2013 like Allegheny County?
Lehigh, Lebanon, and Erie Counties are all expected to have new values. Lebanon’s came about because of a court decision at the Common Pleas level. Same with Adams County, which completed its reassessment in 2011. Why aren’t legislators and the public hearing from the experiences in these counties?
In Wednesday’s blog, the subject of which was the legislation that would have enacted a moratorium on the court ordered reassessment in Washington County, we noted "The Governor should ask some of his constitutional experts about the advisability of signing this legislation".
Just this afternoon the Governor announced that the bill was too specific and limited and has vetoed the measure. The original intent of the legislation was to forestall all ongoing assessments until the Legislature came up with a solution for its assessment system. The churn of the legislative process produced a bill that applied only to "counties of the fourth class, with a population between 185,000 and 210,000 as of the 2010 United States Census" the only one being Washington County.
Having the Legislature attempt to circumvent court rulings would undoubtedly lead to a Constitutional crisis. The bill can be overridden, of course, but the best way to fix the assessment system is to enact changes to the laws governing it, not to step over the judiciary.
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.
The General Assembly has once again taken a highly questionable position in ordering a stop to court ordered reassessments. One can hope that the Governor will not sign the latest version of the bill, which applies only to Washington County.
Legislation overturning court rulings that are clearly based on the Pennsylvania Constitution is an assault on the Constitution and the balance of power contained therein. Where does it end? Indeed, what happens when the Supreme Court rules the legislation unconstitutional? Will the law be enforced or not? Who has the power to enforce when the law says one thing and the courts say different?
This is an ill-advised slippery slope for the Legislature to be taking. Qui bono? Who benefits? The majority in the legislative bodies must not confuse temporary electoral expedience with fealty to their oath to defend and obey the Constitution. They might not like what the Constitution requires but that is dealt with an amendment process-not by flouting the Constitution. There is not enough good to be gained from this action to justify the long term harm that will come from taking it.
The irony is that the Legislature has known about the problems with Pennsylvania’s assessment statutes and the morass of assessment schemes across the state for a long time and has failed in its duty to write new bills to bring the state into the 20th century.
The Governor should ask some of his constitutional experts about the advisability of signing this legislation.
On facing a court-ordered reassessment, that is. Members of County Council, including the past president of Council, and the County Executive have long argued that Allegheny County was being singled out and treated unfairly on reassessment policy. Bear in mind that the County tried to institute a cap system, which went to court and was tossed out, and then instituted a base year plan that went through the courts (all the way to the PA Supreme Court) and was tossed out. Apparently a court ruling against you on a suit constitutes being "singled out".
Right to the south of Allegheny County in Washington County a similar situation where the courts heard a lawsuit concerning assessments and ruled that one had to be undertaken is playing out. The state House Democratic Policy Committee held a hearing there yesterday to discuss the impending reassessment and how it, as well as Allegheny’s, would be forestalled if a statewide moratorium on court-ordered reassessments were passed.
Testifiers at the meeting included the former County Council president, the same official who was quoted in a January 21, 2011 newspaper article as stating "…it is unfair that Allegheny County should be the only county in the state ordered to do a reassessment". If this were accurate, how is it that this official appeared at a hearing in a county that has been likewise ordered to do a reassessment by the courts?
A report commissioned at the behest of the General Assembly even reviews six court cases in five Pennsylvania counties from 1991-1998 in places where a base year was used. When these cases are taken into consideration it is even more difficult to argue that Allegheny County is being segmented into a class of its own.
This week the Governor and 31 state legislators have been invited to County Council’s chambers to discuss "PA Assessment Law and the 2012 Court Ordered Allegheny County Reassessment". The topic could more appropriately be titled "Please Act on Our Moratorium Request". Council, by a 13-2 vote, recently passed a resolution asking the General Assembly to pass a bill circumventing the decision of the state Supreme Court that ordered a reassessment based on the uniformity violations in the County’s base year plan.
As we have pointed out before, the serious consequences of a legislative action that would try to nullify a Supreme Court decision cannot be understated. The County Executive and Council members in support of the base year and now the moratorium say they want predictability and stability. However, the status quo is in clear violation of the state Constitution’s uniformity clause.
From the perspective of the Council the upside of the moratorium is that it will give the General Assembly "suitable time to study Pennsylvania’s current property tax system and to enact legislation of uniform, equitable, and statewide effect…" The problem is that one, the Legislative Budget and Finance Committee released such a study in July of 2010 and two, the state has known for a long time with or without studies that the property tax system is outmoded and has acted at the margins (lottery, slot machines, homestead exemptions, etc.) to "solve" the problem.
A sure sign of how seriously legislators from the County take the Council’s request will be reflected by how many show up to the meeting.
In fearful anticipation of the 2012 re-assessment figures, a County Council member has proposed softening the sticker shock by using a fractional Predetermined Ratio (PDR) to lower assessments from the 100 percent of appraised value procedure now in place. That is to say instead of a $200,000 appraised value property being assessed for tax purposes at $200,000, the County could use a ratio of say 80 percent and lower the assessed value to $160,000. For a homeowner whose property appraisal was actually increased from $160,000 to $200,000 by the reassessment that would seem to leave the tax liability unchanged. But in fact it does nothing to change the shift in tax burden that would have occurred if the 100 percent PDR is used.
Since all property values would have the same 80 percent factor applied, the relative values of properties would remain unchanged. Presumably, taxing bodies will need to maintain total revenue collections after the re-assessment somewhere close to the pre-reassessment levels. Thus, millage rates will have to be adjusted to make that happen and changing the predetermined ratio merely creates an illusion of lowering tax liabilities. Thus, property owners whose appraised value rises far more than the average increase in their school district and municipality and county will still face higher taxes while properties that have been over assessed and whose value drops relative to the average change will see decreases.
Re-assessment is about getting accurate values for purposes of taxation so that equity among property owners is achieved. Playing with the PDR is a gimmick meant to disguise the sting of sharp assessment increases. It won’t work.
An Allegheny County Council Committee has voted to instruct the Solicitor to file suit against the state Legislature in an effort to force it to enact a moratorium on reassessments and rewrite Pennsylvania’s property assessment laws.
Article VI, Section 3 of the Pennsylvania Constitution requires that all Senators and Representatives take and subscribe to the following oath, "I do solemnly swear (affirm) that I will support, obey and defend the Constitution of the United States and the Constitution of this Commonwealth and that I will discharge the duties of my office with fidelity."
Straightforward and leaves little room for interpretation.
How is it then that the Legislature intends to pass a bill that sets aside Article VIII, Section 1 of the Constitution that requires; "All taxes shall be uniform, upon the same class of subjects, within the limits of the authority levying the tax, and shall be levied and collected under general laws."? The Supreme Court has upheld this provision on several occasions, most recently in the case of a suit brought against Allegheny County’s assessment system.
The legislative moratorium on court ordered re-assessments based on the Constitutional requirements set out in Article VIII, Section 1 essentially sets aside the Constitution as it applies to property taxation, an action that is clearly inconsistent with the oaths of office taken by legislators and the Governor if he signs the bill into law.