Chelsa Wagner: Commercial properties getting bigger tax reassessment break than residential ones

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As far as taxes are concerned, it's good to own property in Allegheny County -- as long as you don't live in it.

A review by the Allegheny County Controller's office indicates commercial property owners have weathered the contentious countywide reassessment far better than homeowners, with commercial properties getting a larger tax cut upon appeal.

The average commercial building cut 21 percent of its property value -- and therefore its tax bill -- upon appeal, Controller Chelsa Wagner said Monday. By contrast, the average resident got a 9 percent reduction, a disparity the controller says should shake the public's trust in 2012's reassessment.

"I think there needs to be far, far greater transparency," she said. "There's a simple fairness issue -- you have residential owners bearing more of the burden."

More than 100,000 properties appealed their assessments last year, after a court-ordered reassessment sent some property values soaring. While many acknowledged growing tax disparities between neighborhoods had made a reassessment long overdue, horror stories of tripling tax bills spooked a public already leery of higher levies.

PG graphic: Largest reductions in assessments
(Click image for larger version)

But on the whole, Ms. Wagner says, it is corporations and businesses who won the most. Her analysis, which ended Aug. 9, showed the county's 19,422 commercial appeals saved building owners about $5 billion, or an average of $259,890 each. Meanwhile, 140,000 homeowners got back $1.8 billion upon appeal, or $12,689.

Part of that is due to the sheer dollar value of some commercial properties -- the U.S. Steel Tower is worth far more than Grandma's bungalow, after all. But critics also point to advantages held by corporations, which can afford pricey lawyers and were sometimes ushered into appeals express lanes.

Residents weren't trained properly on how to file an appeal, said Dominick Gambino, a consultant who headed the county's 2001 assessment. He says poor preparation among homeowners led to doddering defenses before the Board of Property Assessment Appeals and Review.

Allegheny County held 16 town meetings on the reassessment, pairing administration staffers with thousands of county residents to discuss their particulars. It wasn't enough, Mr. Gambino suspects.

"The commercial properties know how to do it. My Aunt Rose does not," he said. "I see all the time what owners bring in as evidence, and many times they're not well informed enough to bring in acceptable evidence."

On the other hand, many also believe the county's biggest buildings were widely overassessed by contractor Tyler Technologies' computer algorithms.

UPMC Passavant in McCandless tops Ms. Wagner's list, with its property value dropping $131 million upon appeal, saving the health care nonprofit more than $600,000 yearly in county taxes alone. But UPMC spokeswoman Susan Manko says assessors mistakenly lumped taxable and tax-exempt properties together, sending the facility's tax bill skyrocketing.

They quickly fixed the error, she said.

Many appeals went to the Board of Property Assessment Appeals and Review, which reads the recommendations of hearing officers and decides a property's value from the evidence. Others later went on to the Court of Common Pleas; still others were settled informally through the Office of Property Assessment.

Board of Property solicitor David Montgomery said the board has no prejudice toward business. Indeed, it's barred by law from looking at the larger picture. Board members take each case as it comes, he said.

"We're not trying to put our thumb on the scale on anybody," he said. "We're just trying to resolve each individual appeal in a fair matter. We'll leave the statistics for policymakers."

But it may be Allegheny County Executive Rich Fitzgerald, a progressive Democrat who opposed the reassessment but has nonetheless been forced to defend it, who is in the toughest position.

Responding to Ms. Wagner's analysis Monday, his staff called her announcement premature, pointing to the pile of still-outstanding appeals and suggesting there's enough among them to swing the percentages back in the public's favor.

"This is just a particular snapshot of where we're at this particular juncture," said Jerry Tyskiewicz, Mr. Fitzgerald's director of administrative services. "Water will find its own level. It's going to be a process."

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Andrew McGill: amcgill@post-gazette.com or 412-263-1497. First Published September 16, 2013 12:00 AM


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