The Pennsylvania Supreme Court unanimously ruled yesterday that Allegheny County's property reassessment system is unconstitutional and unfair to property owners with lower values and said the county must reassess its property values.
The justices found fault with the county's use of a base-year assessment system, which they said violated the uniformity clause of the Pennsylvania Constitution.
In a majority opinion written by Chief Justice Ronald D. Castille, the court said that the county's base-year system is inherently unconstitutional because it is unfair for property owners with stagnant or falling values.
"[T]he Allegheny County scheme, which permits a single base-year assessment to be used indefinitely, has resulted in significant disparities in the ratio of assessed value to current actual value in Allegheny County."
"The disparity is most often to the disadvantage of owners of properties in lower-value neighborhoods where property values often appreciate at a lower rate than in higher-value neighborhoods, if they appreciate at all," the court said.
The court cited examples of what has happened to property taxes in the Woodland Hills School District since the county implemented its base-year system. Between 2002 and 2005, for example, the court showed that property values in Braddock declined by 16 percent while they went up by 35 percent in Edgewood.
Justice Max Baer wrote a concurring opinion as the court returned the case back to Common Pleas Court where it asked "the trial court to determine Allegheny County's progress in executing a county wide reassessment and to set a realistic time frame for its completion."
As a result, the justices wrote, "Allegheny County is currently left with a broken system of property taxation."
Despite what appeared to be a strongly worded setback for the county, Allegheny County Executive Dan Onorato said he doesn't believe the ruling means the county will have to do a reassessment.
"Based on a quick review, [of the court's ruling] there are several options for us in this decision," Mr. Onorato said yesterday.
Mr. Onorato implemented the base-year system, which sets assessments based on the value of property in 2002, including new construction. Common Pleas Judge R. Stanton Wettick Jr. threw out that system in 2007, declaring the state law that allows a base-year system, unconstitutional.
But the Supreme Court yesterday disagreed with Judge Wettick's interpretation of all base-year systems.
"We find no ineluctable constitutional deficiency with the use of a base year system: it is only through the passage of time that a base year assessment will become stale, and thus unconstitutional," said the court.
Therein, Mr. Onorato argued, may be the opening for the county to revise its base-year plan without necessarily implementing another round of property reassessments.
"I'm not prepared to say that there will be a property reassessment in Allegheny County. I don't believe [the court] is directing us to do a specific action," Mr. Onorato said.
He said he will spell out the county's response to the court's ruling in the next few days, "after we have had a chance to go over all our options."
Among the options, he said, could be a redefinition of the county's base-year system -- to meet constitutional standards -- which would have to be settled between the county and a Common Pleas Court judge. That may involve changing the language of the county's base-year law to include a time frame for reassessment.
At the moment, it is unclear whether the case will return to Judge Wettick.
Pittsburgh attorney Ira Weiss, who together with Donald Driscoll, represented the group of homeowners that challenged the county's base-year plan said the court's ruling left no room for any interpretation.
"The court said the base-year system as it is implemented by Allegheny County is unconstitutional and there must be an immediate reassessment. This is a total rejection of the county's core arguments for a base year system," said Mr. Weiss, who was part of the team representing the homeowners that were bundled up in two cases, Clifton et al and Pierce et al v. Allegheny County.
"We won because Allegheny County was trying to defend the indefensible. The court graphically demonstrates that the system we have for property assessments in this county has created gross inequities, yet uniformity is a core principle in Pennsylvania law," he said.
So far, this ruling has no effect on any other county that has a base-year assessment system. And that is why Mr. Onorato vowed to end property reassessments in Allegheny County as well since taking office six years ago. He repeated his vow yesterday.
???It would be unfair for me to just roll over and do something that will raise the property taxes of the 1.3 million people in this county,??? Mr. Onorato said.
In any case, he added, the county cannot afford a full scale reassessment at the moment, at least not the kind of assessment that cost more than $30 million the last time the county did one. The assessment of property values helps determine how much a homeowner pays in property taxes.
Ultimately, the Supreme Court said, the state General Assembly is the "appropriate place in the first instance to fashion a more comprehensive and soundly constitutional [property assessment] scheme."
Karamagi Rujumba can be reached at email@example.com or 412-263-1719.