Do Homeowners Get It?

Reaction is coming in to the County Controller’s audit of the contractor that performed the reassessment. The audit deals with four main findings: the contract provisions were satisfied, but they were weak; the project was not completed in the timeframe; the County’s Office of Property Assessments (OPA) did not adhere to its contract provisions; and various internal control deficiencies.

There’s plenty of data as the Controller’s office calculated median, mean, coefficient of dispersion, and price related differential for sales covering two time periods and displayed the results by municipality and school district. There is a response to the audit from OPA, which basically concludes that the property tax system in the Commonwealth is flawed and needs reformed.

What’s very important to note is that in at least two instances the audit goes to great length to dispel the notion that a reassessment automatically causes a tax increase. We noted earlier this year that the County’s reassessment page published a quick and handy guide to this fact, and the Controller’s audit notes that "it is important to understand that a taxpayer’s tax liability will not necessarily increase when the assessed value of their property increases" and "one of the common misconceptions held by Allegheny County property owners about the reassessment is that the reassessment will automatically result in a higher property tax bill for the homeowner…"

By detailing the anti-windfall provisions in Act 71 and Act 1 along with providing examples of homes the Controller’s office has provided another voice to counteract the drumbeat of "reassessments mean higher taxes" that has been so prevalent in the near decade long tussle over revaluations.

Last Gasp for Moratorium?

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?

Is It Sayonara to Property Taxes in Allegheny County?

Stop the reassessment in Allegheny County, no matter what it takes.  That has been the consistent mantra from the County Executive (before and after his election) who has asked for the Legislature to enact a moratorium on court-ordered reassessments and has now enlisted the support of several City Council members. This group is backing an effort of a state Senator who wants to allow Allegheny County to end assessments and in so doing end the levying of property taxes by the County, its municipalities, and its school districts. 

 

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The Next Reassessment

The County is putting the final touches on the reassessment of real property, the first one in a few years. It will go into effect on January 1, 2013, and the County, its municipalities, and its school districts will have to adjust their millage rates to adjust to the new values. That is all yet to come, but the question of "when do we do this again" has already come up.

Sounds a lot like Allegheny County, doesn’t it? It is not. In fact, it is the county tucked up in the far northwest corner of PA, Erie County. After spending many years not reassessing, the County lost a court battle and reassessed in 2003. After doing that one, Erie’s County Council passed an ordinance in 2005 that mandated reassessments every eight years, giving way to the one set to go into effect in seven months. That time frame is still longer that what the IAAO would recommend as best practices.

If 2005 rings a bell, it should. That was the year Allegheny County released new assessed values that were to go into effect in 2006. That would then lead to annual assessments after another three year breather. That was all scrapped and the base year plan was hatched. We have for several years been pondering what comes next for Allegheny County’s reassessments.

Of course, Erie’s question-and Allegheny’s, and all other counties’-could be answered if the General Assembly comes up with a mandatory schedule for assessments, crafts a statistical trigger, or eliminates property taxes altogether.

Legislature Ready to Undermine the Supreme Court

The Pennsylvania House has once again put on display its utter contempt for the rule of law by passing a bill that would overrule orders from the courts including an order of the Supreme Court that upholds the state Constitution. Amazingly, the House passed a bill that allows county leaders to decide whether they will obey court orders to update property assessments.

One can only hope the Governor will veto this threat to the separation of powers enshrined in the Constitution. One must wonder if the members of the Legislature who have sponsored this monstrosity have considered the oath they have taken in which they swear to obey, protect, and defend the constitutions of the United States and Pennsylvania. Those constitutions empower the Supreme Courts to decide on constitutionality of laws written by the legislature and actions brought before it through lawsuits. When the Legislature decides to enact legislation that directly contravenes a Supreme Court decision based on the Constitution we have the making of a crisis in governance.

Assuming the Senate also passes the bill, and the Governor signs it, the bill will face an almost immediate challenge in the courts and will certainly be ruled unconstitutional. At that point, how does it get to be enforced? Will the Legislature write another law saying it is alright to ignore the new court rulings? Or will the county leaders go merrily on their way ignoring the court orders to reassess? If the courts acquiesce and yield to this assault on their power, they will have effectively neutered themselves as the citizens’ best hope for protection of liberty and property and relinquished those powers to a Legislature, which, by virtue of passing court crippling legislation, has shown itself to be unfettered by the Constitution or its oath to obey and defend the Constitution. This bill and its probable aftermath will make Pennsylvania the laughing stock of the nation.

The asininity of the situation is more clearly seen in the fact that the Legislature has had years to write assessment laws that would conform to and show for respect for the Constitution House members have sworn to obey. In their fear of property owners whose properties are grotesquely under assessed they have chosen not to risk the ire of those voters by passing needed reforms that would bring Pennsylvania into the 20th century, let alone the 21st century. In so doing they have allowed horrendous inequities to develop in property assessments for which only the courts can offer a remedy to property owners forced to pay far more than their fair share of taxes.

Now the courts come with orders to fix the problem as mandated by the Constitution’s requirement of uniformity of taxation and the Legislature has chosen to attempt to block the only avenue open to taxpayers seeking correction of illegal and inequitable treatment.

If the Legislature wishes to do something that shows their true colors and would be helpful to their cause, it could pass an amendment to the Constitution that removes the uniformity clause. Or if they cannot muster the political courage to do that they could pass an amendment forbidding the taxation of property.

But they will do neither. It is easier to pass bills that flout the Constitution and the rule of law. Better to stay in good stead with those getting enormous and illegal advantages in their tax bills than to deal with the problem of their own making through the years of unwillingness to tackle what has been staring them in the face. We are witnessing self-government at its most feeble.

Washington County Assessment Appeal Thrown Out

In a long running drama remarkably similar to the case in Allegheny County, a Commonwealth Court judge denied Washington County’s appeal of a November 2011 lower court order requiring the County to begin a property reassessment immediately.

 

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Allegheny’s Neighbor Joins Court-Ordered Reassessment Frat

The complaints levied by Allegheny County officials that they have been "singled out" by the state’s courts in having to conduct a reassessment have been long and loud, but the County has company from its neighbor to the south, Washington County. It just received word that the Commonwealth Court tossed its appeal of a Common Pleas decision that it had to reassess. The Governor vetoed a bill in 2011 that would have permitted a moratorium on the Washington County reassessment.

So where does the issue go from here? Obviously there could be a Supreme Court appeal or another motion to the Commonwealth Court, but based on the Allegheny County decision if the issue at hand is the underassessment of commercial properties due to a base year that has become "stale", then it is quite simple to predict what is going to happen. The Supreme Court held that it could take a long time for inequities to arise in some counties; Washington County might be there.

A January article quoted one of the County Commissioners who referred to "the mess in Allegheny County" as reason to hold off. Sounds a lot like the desire of Allegheny County officials to have "predictability and stability", twin goals that the courts did not agree with.

District Confusion Could Cause “Wind-Fails”

This week’s Brief pointed out the rather complex process under which the County, municipalities, and school districts will have to adjust their millage rates when the 2013 reassessment is made official. The Brief points out that the old days of taking 5% above the revenue collected the year before the reassessment are no more.

So when the business manager of a south hills school district noted that "revenues in the budget were based on the county holding a countywide reassessment this year in which school districts and municipalities would have been permitted to keep a 5 percent windfall" there is going to have to be a major undertaking of school officials, solicitors, and others to ensure that the new legal obligations are being followed. The officials of the District might be wary of budgeting anything given the resistance of County leaders to move forward with a reassessment.

As a result of changes to the law in recent years, there is no ability to take a 5% windfall: the County and municipalities can vote to get 5% after they establish a revenue neutral rate and school districts are limited to the confines of their Act 1 index.