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Statewide realty tax system finds another ally
Wednesday, May 13, 2009

HARRISBURG -- The touchy topic of property reassessment is roiling the political waters in counties like Allegheny, Philadelphia, Luzerne, Bucks and Mercer, with others likely to follow.

So one Democratic legislator thinks it's time to study a major change -- whether the Legislature should create a statewide office of property reassessment. That would relieve the state's 67 counties of the financial headaches and taxpayer wrath that result from revaluing homes and commercial properties every few years -- or decades.

State Rep. John Yudichak of Luzerne said yesterday that he will soon introduce a two-part bill on reassessment, which can result in politically unpopular property tax increases.

"It's certainly a volatile issue," said Rep. Bob Freeman, D-Northhampton, chairman of the House's Local Government Committee, which yesterday was briefed by lawyers on the recent Supreme Court decision ordering an Allegheny County reassessment. The court ruled that the county's system using a base year for property values with no set time to review them is unconstitutional because it doesn't update for changes in property values over time.

Mr. Yudichak wants the Legislative Budget and Finance Committee, a General Assembly research arm, to study what goes on in Maryland and other states that have a statewide property assessment office, and recommend whether Pennsylvania should go that route.

"We want to look at states that do it on a statewide basis," Mr. Yudichak said. "We are trying to achieve fairness with property valuation. Higher taxes aren't the goal. I am trying for fairness."

In Pennsylvania, counties do the reassessments now, but at widely differing intervals of time, during which property values can change greatly. Butler County, for example, hasn't reassessed since 1969. Allegheny County uses a base year of 2002 for its property values.

Since most counties use the same system as Allegheny, they could face a legal challenge to their assessment system, too.

Mr. Yudichak's bill has another noteworthy part -- putting a moratorium on court-ordered reassessments, as Allegheny County was ordered to do.

Allegheny County Executive Dan Onorato, who is resisting the court order to reassess, said Mr. Yudichak is "absolutely right" with his idea. "I fully support him. I hope the Allegheny County (legislative) delegation can work with him on this."

Mr. Onorato still needs to see details of the Yudichak plan, but said, "The Legislature should be talking about a short-term moratorium on reassessments until they come up with a plan for true property tax reform." One aspect that should be studied is whether property taxes are the best way to fund schools, he added.

Mr. Onorato said Mr. Yudichak understands just how broken the assessment system in Pennsylvania is because Luzerne County also is facing a reassessment controversy. Mr. Yudichak said his county just spent $9 million to complete its first property reassessment in 40 years but some people don't like it.

With such a long time between revaluing properties, many have increased in value, and a group of property owners is going to court to block the reassessment because the new values would be used to determine their tax bills, he said.

Philadelphia also is embroiled in an assessment controversy. Its Board of Revision of Taxes has just completed new assessments on more than 577,000 properties in the county, but an analysis by the Philadelphia Inquirer has called into question the accuracy of the new numbers as well as management practices at the agency. Some of the new assessments bear little resemblance to recent sale prices, the paper found.

As a result, Mayor Michael Nutter asked the board members to resign, but they refused. The overall market value of properties in Philadelphia skyrocketed from the previous $34 billion to the new figure of $98 billion.

Mr. Yudichak wants to see if it makes sense for state government to take over the complicated job of reassessment. That would save counties the high costs of reassessments, such as an estimated $30 million to reassess properties in Allegheny County.

If the House and Senate approve the Yudichak bill, he said the study would probably take six months to a year to complete. It would determine how much it would cost the state to create a new reassessment office.

Referring to the high court's decision on Allegheny County reassessment, Rep. Scott Petri, R-Bucks said, "The warning shot is over the bow. The court will do something if the General Assembly doesn't do anything."

In his suburban Philadelphia county, he said, property assessment "is a big issue. No system will be completely equitable, but we have to seek fairness."

Mr. Yudichak said Maryland reassesses one-third of its properties each year, meaning it takes three years to complete a full reassessment. There is also a system for allowing property owners, if their taxes go up, to pay the higher amounts in installments.

Douglas Hill, director of the County Commissioners Association of Pennsylvania, said it's worthwhile for Pennsylvania to look at what Maryland does, since it would relieve counties of a major expense.

Reassessment "is about establishing equity (among property owners), not about increasing a county's tax base," he said. The price tag -- $75 to $125 per parcel in a county -- "is one reason we don't do it that often."

State Rep. Dan Frankel, D-Squirell Hill and chairman of the Allegheny County Democratic Delegation, said the delegation is working to find a remedy to what he termed a "broken and fragmented assessment system."

Mr. Frankel said Frank Dermody, chairman of the House Urban Affairs Committee, is working on the proposal that would call for a moratorium on court-ordered property reassessment. And he said that state Rep. David Levdansky, D-Forward, is working on the study of the state's assessment system.

Staff writer Karamagi Rujumba contributed. Harrisburg Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 717-787-4254.
First published on May 13, 2009 at 12:00 am