Get ready: Assessments are coming next week
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Rich Fitzgerald and Dominick Gambino agree that Allegheny County leaders shouldn't have a judge telling them to reassess real estate.
But Mr. Fitzgerald, the county executive-elect, and Mr. Gambino, who was manager of the county's office of property assessment during the administration of Jim Roddey, couldn't disagree more on the need for the project.
Mr. Fitzgerald says the property revaluation effort now nearing completion unfairly singles out Allegheny County and should be scrapped.
Mr. Gambino strongly differs, saying reassessment will lift an existing unfair tax burden on residents of poorer communities. Elected leaders, not a county judge, should have launched and directed the project on their own, he said. Mr. Gambino, who worked for the county for 25 years, now runs a consulting firm called Diversified Municipal Services Inc.
Mr. Fitzgerald, who will take office Jan. 3, has been a longtime foe of the two-year, $11 million effort to assign up-to-date market values on 600,000 real estate parcels. In an interview last week in his temporary office in the county courthouse, he pledged that his administration would not distribute the new property values now being compiled.
"My plan is to send out certified numbers for everybody in January," he said. "They will be the same numbers that we have been using for the past 10 years."
Mr. Fitzgerald wants those numbers to continue to be used until legislators in Harrisburg come up with statewide standards for reassessment.
His promise puts him on a collision course with Common Pleas Judge R. Stanton Wettick Jr., who was given a mandate to oversee the local reassessment by the state Supreme Court. Responding to a suit brought by two groups of taxpayers, the justices ruled in 2009 that the county's base-year assessment plan was unconstitutional.
Judge Wettick has made clear at weekly status conferences with county officials that he expects new property values to be used for calculating real estate taxes in 2012. He emphasized that point again Thursday when he rejected Sewickley solicitor Richard Tucker's request that the borough be allowed to use the old numbers for one more year.
Judge Wettick has pressed the county to make sure that new certified assessments have been delivered to owners of all residential and commercial property in Pittsburgh and Mount Oliver before Mr. Fitzgerald takes office. Those 144,000 parcels represent about one quarter of all the real estate in the county.
The first batch of those numbers is to be mailed Dec. 27 to homeowners in Pittsburgh and Mount Oliver, which is part of the city public school system. New assessments for commercial properties will follow by Dec. 31. The city and school district send their tax bills out in January, and Judge Wettick ordered county assessors to concentrate on completing that portion of the work first.
Pittsburgh homeowners will have until Jan. 6 to request an informal hearing on their new property values. Those proceedings are to be completed by Jan. 27. No schedule or locations have been announced for those hearings at which property owners often represent themselves.
If they are displeased with the outcome of their informal review, homeowners also will have the option of requesting a formal hearing before the county's Board of Property Assessment Appeals and Review. Both property owners and taxing bodies -- school districts and municipalities -- are present at those quasi-judicial proceedings. Both sides usually are represented by outside counsel.
The judge's order to focus on the city means delays in completing reassessment in the rest of the county. New property values will not be available for many suburban communities until late winter or early spring.
That situation does not appear to be causing major problems for the rest of the county's school districts, since they follow a fiscal year that begins July 1. They have until June 30 to pass their spending plans and set tax rates for next year.
But the other 128 municipalities in the county are required to pass balanced budgets and set tax rates by Dec. 31.
Judge Wettick asked attorneys to prepare an order that would give townships and boroughs the option of sending out two tax bills next year. The first would be for half of the property tax paid in 2011 and would be based on the current assessment numbers. The second bill would be sent out after new certified assessments are completed and would reflect the likely change in millage rates as well.
State law forbids municipalities from collecting an automatic tax windfall as the result of higher property values following reassessment. That "revenue neutrality" requirement means that borough, township and county millage rates following reassessment must be adjusted up or down to assure that proceeds from property levies are the same in the years before and after reassessment.
Of course, nothing in government is ever that simple. Municipal councils and boards still can raise taxes by 5 percent, but they must do so by separate votes. Any increases of more than 5 percent in the year following reassessment would have to be approved by a county judge. Judge Wettick has said he would not be the judge ruling on tax hikes.
County Executive Dan Onorato, who leaves office next month, has been another opponent of reassessment. Mr. Onorato's stance puts him in the awkward position of opposing the project while at the same time his administration has been carrying it out for the past two years.
In September -- after county officials said they would not be able to meet several reassessment deadlines -- Judge Wettick said they appeared to lack a "sense of urgency" about completing the project. He has since issued several court orders for finishing the job.
Last week Mr. Onorato instructed county solicitor Michael Wojcik to file a last-minute "emergency application for extraordinary relief" with the state Supreme Court. It asked the justices to throw out Judge Wettick's plan for completing Pittsburgh first and then releasing certified assessment numbers for the rest of the county as they became available.
It is the fourth appeal the administration and county council have filed to derail reassessment. Appeals courts have not moved on those requests.
Mr. Fitzgerald is predicting "chaos and disaster" after the new city assessment numbers are released. "I remember what happened last time and it brought misery," he said of county's 2002 reassessment. "People like stability and predictability. Being singled out for reassessment will throw this county into chaos."
New, stronger anti-windfall provisions assure as many people will see their tax burdens drop as will see them rise, proponents of the project say. Many other people will see little or no change in their tax bill even if their assessment rises, because their millage rates are likely to drop.
Just how much millage rates will decline will not be known until aggregate numbers are released for the total value of real estate in the county and each school district and municipality. In 2005, the last time the county completed a reassessment, property values increased more than 20 percent and Mr. Onorato refused to implement them, reverting instead to the previous assessment in 2002.
"The assessment is a raw number," Mr. Gambino said. "It means nothing until you see the millage rate."
Lawyer Don Driscoll, an attorney with the Community Justice Project, agreed with Mr. Gambino. He cited an example from the later-scrapped 2005 property reassessment. Since the overall value of residential real estate properties had risen 26 percent since 2002, a homeowner whose property value increased 20 percent would be in line for a tax cut after the millage rate was reduced, he said. Mr. Driscoll's firm represented some of the clients who successfully sued the county over base-year assessment.
Mr. Driscoll has proposed to Judge Wettick that the assessment notices being sent next week to city and Mount Oliver residents have not only a new assessment number for each parcel but also include the average increase for all properties. Those two numbers would tell residents whether their school and city taxes would go up, down or stay the same.
Similar numbers should be sent to suburban property owners that would let them compare their new assessments to average changes within their municipalities and school districts, he said.
City residents will not yet know whether their county taxes would rise or fall as the result of reassessment since no aggregate number exists yet for the average increase in property values for the entire county. The county tax picture is further complicated because county council has passed a 1-mill increase -- equal to 21 percent -- in the tax rate that is independent of any changes resulting from reassessment.
Mr. Gambino said assessment foes were using "pretzel logic" to disparage the property revaluation. Residents are interested in the total tax burden and the quality of local services. "No one will move to Butler County, because we'll have fairer assessments," he said.
Pittsburgh residents voted overwhelmingly in November for a quarter-mill increase in property taxes to support the Carnegie Library, because they believe in the importance of the service it provides, he said.
"Nobody will be angry about reassessment if they believe that their neighbors also are paying their fair shares," he said.
First Published December 18, 2011 12:00 am
