Tag Archives: Reasessment

Reassessment Reforms Become Law

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When we wrote our recent Brief on the pending reassessment in Washington County we noted that legislation had passed both chambers of the General Assembly that would make significant changes to the state-level oversight and guidance of property reassessments carried out by counties. The Governor has signed that legislation and it now becomes known as Act 2 of 2013.

The press release on the Governor’s action does not say much but we did note that the most significant changes would bring some degree of uniformity to the process by creating a manual, training, and outlining best practices, but no changes to how often a reassessment has to be conducted or giving counties a tool to inform them to get ready for a reassessment.

A Bigger Exemption for City Taxes?

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The City Controller has suggested increasing the homestead exemption for City taxpayers. A homestead exemption allows homeowners to decrease their assessed value by a fixed dollar amount so as to lower the property tax bill. The County has a homestead exemption of $15,000 while the City’s is $10,000. While the Pittsburgh Public Schools offers one it is funded through gaming money and it is not quite at the discretion of the school board to change the amount.

In a Brief we wrote last year we showed the effects of the homestead exemption on County taxes since County Council was exploring the idea of eliminating it. The exclusion was boosted from $10k to $15k about a decade or so ago. That’s the decision point the City may come to if it decides to follow through with the Controller’s recommendation.

Using our sample of 100 properties that sold in 2011, twenty of those randomly selected homes were located in the City. If the forecast of the Property Tax Estimator holds accurate Pittsburgh’s 10.8 millage rate would fall to 6.94 mills to be revenue neutral under Act 71 requirements. If that rate held the homes in our sample located in the City would see differing results for their City property taxes: nine homes would pay more in taxes, eleven would pay less. A bigger homestead exclusion for City homeowners would obviously shrink the tax payment: going from a $10k exclusion to a $15k exclusion would result in roughly a $35 decrease in the City property tax bill.

Fitzgerald: Emperor Wannabe or Ignorant of How Separation of Power Works

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In his latest rhetorical foray into governmental theory and structure, Allegheny County’s Executive dismisses the role of the judiciary and attempts to arrogate unto himself and Council exclusive rights to determine how much property owners will pay in taxes and on what basis those taxes will be determined. This most recent denigration of the courts, the Constitution and the rule of law was prompted by Judge Wettick’s decree that the County manager and three other County officials complete the reassessment as previously ordered or face contempt charges.

Interestingly, the Judge opted not to cite the Executive for contempt after his defiance of the court’s orders last week. The ploy to put the threat of fines or jail on the Executives underlings can be viewed as a brilliant tactic in one sense and limp wristed in another.

By threatening to jail employees if they follow the Executive’s order not to comply with the Judge’s decree, he has put the burden of bearing punishment on people other than the Executive thereby placing the decision of whether they are punished in the hands of the Executive. Thus, the Executive must decide if he believes holding up the court ordered reassessment is worth having employees go to jail. Or he might choose to fire all the people the Judge has ordered to finish the job and not replace them-delaying the work for quite some time.

At the same time, removing the threat of punishment from the Executive takes away any fantasy the Executive might have had about being a martyr for the cause of frozen, never-to-be-changed assessments. On the other hand, it can be argued that authority and accountability reside in the Executive and it is he who should bear the consequences of his court defying behavior. As such, does the Judge’s decision to excuse the Executive reflect excessive deference and therefore bodes ill for the process going forward?

The language of the Executive in response to the Judge’s decree is telling. He told reporters the Judge was trying to run the County by judicial fiat and had overreached his authority.

Clearly, these comments are indicative of someone who is frantically trying to rationalize his own flawed position or who has completely forgotten-or never knew-about the role of the three branches of government. His attitude ignores reality. First of all, the County is a creature of the state and is therefore subordinate to its Constitution and laws. He might have guessed at that possibility when he recently took an oath to obey and defend the Constitution and the state’s laws, which includes by extension orders from the judiciary, especially those from the Supreme Court. Thus, the County Executive and County Council are not free to behave in any way they wish simply because the people of the County elected them. This is something the Executive should have learned as a member of Council when several Council passed bills were struck down by the courts.

But a number of recent pronouncements by the Executive regarding the courts and the reassessment order point to a belief that there are some laws and court orders the County has no obligation to obey and is within its rights to ignore. That level of disrespect for the Constitution and the judiciary if not checked can only encourage the populace to treat the rule of law with increasing disdain. The rule of law is the bedrock upon which a free society exists. Undermining the rule of law is tantamount to promoting anarchy.

If laws or constitutions need to be changed for whatever reason, there are prescribed, legal mechanisms in place to do that. But open defiance of the law by elected officials is a toxin in the body politic and must not be tolerated.

Tax Increase Advances

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Last night County Council’s Budget and Finance Committee advanced a 1 mill increase in the property tax, a 21% increase that defies explanation. The Committee wants to raise taxes in the face of a reassessment that, because of state law applying to counties of the second class, will require millage rates to be revenue neutral. The law permits a separate tax increase vote that would allow the County to take in 5% more than the revenue neutral amount. Anything above that requires court approval.

Of course, many on Council might be hoping that the state is going to somehow intervene and stop the reassessment ordered by the state Supreme Court. The incoming County Executive has stated he will not mail out assessment notices. So County government is treating 2012 as a non-assessment year, as silly as that sounds, and the only requirement for a tax increase would be an affirmative vote of 10 of the 15 Council members. Perhaps the Council is hoping to find a judge that will find the 1 mill increase permissible by outright ignoring the fact that the County and Judge Wettick are meeting weekly to discuss the progress of the reassessment.

A quick word on the mechanics of the tax: the County’s operating budget has four main funds-general, debt service, liquid fuels, and transit support. Only the first two partake of any property tax revenue. Right now, at 4.69 mills, the general fund gets 3.6852 mills (equating to 79% of the total millage) and the debt service fund gets 1.0048 mills (the remaining 21%). The 1 mill increase and the allocation of millage would stay roughly the same at 80/20. Council is free to change that ratio at any time by majority vote.

Enacting a 1 mill increase now would seem to muddy the waters, to say the least, since taxing bodies don’t know how much the reassessment will net. All in all a silly notion.

Legislature Does Disservice by Stepping on Judiciary

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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.

Legislative Oath of Office and Assessment Moratorium Bill

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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.