County’s Towns and Cities Face Assessment Changes

Earlier in 2012, Allegheny County released preliminary assessed value changes for its cities and towns showing how property values had changed, in aggregate, for 2013. The range ran from a 75% increase in Rankin (with values rising from $14 million to $24 million) to a 5% decline in Pitcarin, the only municipality that saw aggregate property values fall in the County.

With appeals taking place and certified values reflecting those changes as of their December 20th release, we see that five municipalities (Turtle Creek, East Pittsburgh, West Homestead, Sewickley Hills, and Pitcarin) saw their certified values come in higher than their preliminary numbers. Nine municipalities saw no change. The remaining 114 municipalities saw certified values fall from preliminary numbers. A good many of these (86) saw rather small decreases (5 percentage points or less). Sizeable reductions from preliminary numbers to certified numbers came in these communities: Dravosburg (86% to 34%), Neville (96% to 56%), Versailles (43% to 17%), Sewickley Heights (61% to 37%), and Harmar (56% to 41%).

Municipalities have until the end of January to set millage rates for 2013 tax bills that comply with the Act 71 requirements on revenue neutral rates and rate hikes following the establishment of those revenue neutral rates.

Measuring the Changes in Certified Assessed Values

Prior to Christmas and New Year’s Day, back on December 20th, Allegheny County certified assessed values for 2013. It will take until the end of January for local governments operating on a calendar year for their fiscal year to finalize millage rates for 2013 tax bills. School districts, with the exception of the Pittsburgh Public Schools, operate on a July-June fiscal year but with Act 1 governing budget development that process will begin rather soon.

Appeals of initial values have adjusted the aggregate changes for the County, municipalities, and school districts. As reported after the certification, the County as a whole will see values rise 32%, from $64.1 billion to $84.5 billion. Earlier in 2012 it was projected that the County would rise to $86.8 billion, a 35% increase.

A quick look at values sorted by school district (there are 43 in Allegheny County) shows a few with what could be considered sizeable drops in the initial projections of assessment changes. Pittsburgh (Pittsburgh and Mt. Oliver) was initially projected to increase 55%; now it will rise 48% under certified numbers; Cornell (Coraopolis and Neville) was initially set to rise 42%; now values are expected to rise 26.7% (in initial 2012 numbers Neville Township was projected to rise 95%, and now the certified numbers show the municipality’s values climbing 56%); Wilkinsburg, Allegheny Valley, McKeesport Area, and Quaker Valley are others that will see somewhat significant drops in what was originally projected to be their assessed value increases.

Only one district, Steel Valley (Homestead, Munhall, and West Homestead) saw even the slightest uptick in values from initial to certified, rising from 25.4% early in 2012 to 25.5% in the certified numbers.

The New Assessments: Up “Til Now

With the release of new values for the majority of communities comprising the southern portion of Allegheny County, new values have been produced for 66 of the County’s 130 municipalities. This blog looks at the cumulative impact on the suburban communities that make up the eastern and southern sections that received new values in February of 2012.

Altogether there are 64 municipalities in the group: 37 from the east and 27 from the south. In aggregate, values are to increase 29% from $25.2 billion to $32.5 billion. The weighted average percentage change for the group (29%) will be used as a basis of comparison.

Overall, 35 communities-18 that came from the east section and 17 that came from the south section-fell within + or – 10 percentage points of the average (that is to say, assessments increased anywhere from 39% to 19% for the community as a whole). Included in this group are the some of the larger communities in the County: Mt. Lebanon (up 30%), McKeesport (up 28%), Monroeville (up 26%), Bethel Park (up 24%), and Upper St. Clair (up 22%).

Thus far the entire range of the distribution runs from an assessment increase of 86% (Dravosburg) down to an assessment decrease of 5% (Pitcarin).

The Effects of a Reassessment Delay

If you are happy with your assessment and might see your real estate tax bill stay the same or fall as a result of the new numbers, you will have to wait until 2013 to reap the benefits. That’s the message delivered by Judge Wettick based on yesterday’s news that he may be open to delaying the implementation of the new assessments until next year. Additional delay brings the admonition of the Supreme Court’s 2009 decision that the overhaul of the base year be done in "a realistic timeframe" makes one wonder what is meant by realistic.

The benefit of hindsight might have moved the Judge to contract with an outside vendor completely and not the County who so opposed and continues to oppose reassessing and felt that accurate assessments can never be achieved (but are happy to tax assessments whether they be incorrect, correct, or something in-between). An Allegheny Institute recommendation that a sampling of values checked by independent appraisers or real estate experts could have gone a long way to helping with the current situation. Recall at one point in 2009 the Judge even proposed his own four district plan that would have seen the fourth district reassessed by October of 2013. Maybe that plan is coming together by hook or by crook.

Delaying the implementation until 2013 supposedly came at the behest of the Pittsburgh Public School District, which stated it would be very hard to determine its millage rate due to appeals. But that was precisely why the Judge moved the District to the front of the pack-so that it could see the aggregate changes, establish a millage, and send out tax bills.

A year-long delay basically puts Allegheny County back where it was in 2005: new values were released at the beginning of that year so that people could have a year to appeal, taxing bodies could see new values, and then get ready for January 1, 2006. When the new numbers were shown, sticker shock led to panic, which led to various plans before settling on the base year approach. What makes anyone think that the 2012 plan would not be a repeat of those earlier years?