Asssessment fight heading to the state
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While Allegheny County's new executive, Democrat Rich Fitzgerald, is calling a judge's decision to delay use of new property values until 2013 a victory for taxpayers, he plans to continue his battle for permanent changes in how reassessment is done across the state.
Mr. Fitzgerald, at minimum, wants the Legislature in Harrisburg to pass a statewide moratorium on court-ordered reassessments that would extend Common Pleas Senior Judge R. Stanton Wettick Jr.'s one-year postponement indefinitely.
His ultimate goal is for legislators to create a uniform system for reassessment that would apply to all of Pennsylvania's 67 counties.
"That is my challenge," Mr. Fitzgerald said at a news conference Thursday. "We've seen what disruption the current system [of property revaluation] causes in the residential and commercial markets."
While his efforts have drawn support from several influential state lawmakers who represent southwestern Pennsylvania, passage of either a moratorium or statewide reassessment rules faces a tough fight in the Republican-controlled Legislature.
Spokesmen for Republican Gov. Tom Corbett and Sen. Joseph Scarnati, the top Republican in the state Senate, said how and when to do property reassessment was an issue best left to the counties.
Mr. Fitzgerald has warned that state representatives and senators who fail to support a moratorium are being dangerously shortsighted. Officials in many other Pennsylvania counties could face suits from property owners who believe use of base-year assessment systems are unconstitutional, he said during an interview last week.
Successful lawsuits brought by two groups of homeowners against Allegheny County's base-year system ended with the state Supreme Court ordering the county to revalue all properties. The state's high court then assigned Judge Wettick the task of overseeing the $11 million reassessment that is within a few weeks of being completed.
Two days after he took office, Mr. Fitzgerald, a longtime opponent of the project, announced at a news conference that he was sending out 2002 base-year assessment numbers as certified property values for use with this year's tax bills. He said he would decline to use the new numbers anywhere in the county until the Legislature passed uniform reassessment rules for the entire state.
His action came just a few days after Pittsburgh and Mount Oliver residents received copies of their new assessed values. Mr. Fitzgerald called those 2012 numbers "null and void."
The dispute between Mr. Fitzgerald and Judge Wettick has at least cooled after the judge agreed to a request from Pittsburgh Public Schools for a one-year delay in using new assessment numbers and county officials agreed to abide by the judge's order to distribute new assessment numbers as they become available.
Mr. Fitzgerald was joined at his news conference by two dozen Pittsburgh, county, school district and state officials who backed his calls for state action on assessment and the delay in using new property values.
"What is plain to see is that the current assessment system costs too much, is confusing and produces inequities," state Sen. Wayne Fontana, D-Brookline, said. He was one of the elected officials who stood with Mr. Fitzgerald as he announced his "Fight the Fight" campaign.
"We need to replace it with a statewide system that is reasonable, fair and allows for periodic updates [in property values]," Mr. Fontana said.
"Anything is better than the way Pennsylvania does it now," University of Pittsburgh economist Chris Briem said. Mr. Briem is a researcher at Pitt's University Center for Social and Urban Research.
Statewide standards requiring routine and regular updating of property values would help make assessments fairer, he said.
While he supported the idea of state standards, he rejected Mr. Fitzgerald's argument that Allegheny County was being treated unfairly, because neighboring counties were using even older base-year numbers. Butler County, for example, calculates its assessments on 1969 property values.
Reassessment will shift the burden of who pays how much in local property taxes, based on how home values have increased or decreased in different neighborhoods, Mr. Briem said. But it has no effect across county boundaries.
"The fact that assessment practices are even worse in Butler County has no impact on how revenues are collected in Allegheny County," he said.
Despite indications of GOP opposition, state action on reassessment is not just a pipe dream, Mr. Fitzgerald said.
The Legislature last summer passed a moratorium stopping reassessment in Washington County, but Mr. Corbett vetoed it. He said the measure unconstitutionally discriminated against the rest of the state because it only would have applied to a single county.
Assessment reform has allies among professional organizations. The County Commissioners Association of Pennsylvania has supported changes in reassessment laws for several years, executive director Douglas Hill said.
The state Legislature has taken some steps to improve reassessment procedures. But among the bigger questions still awaiting answers are how often reassessments should be done and who should pay for them, Mr. Hill said.
A well-run reassessment can provide numbers that would remain accurate for five to 10 years, Mr. Hill said. But because property prices in different neighborhoods gain or lose value at different rates, base-year values will diverge from market values unevenly over time.
"And the longer you go between reassessments, the higher the cost [to reassess]," he said. Legislators need to decide whether municipalities and school districts, which share in the benefits of updated reassessments, should contribute toward their costs.
The Legislative Budget & Finance Committee, which has Democratic and Republican members from the Senate and the House, released a report in 2010 that made several recommendations for improving assessments. They include creating a loan program to help poorer counties pay for property valuations and developing uniform standards for reassessment contracts.
The report also discusses the pros and cons of -- but makes no recommendation on -- other aspects of reassessment. Those ideas include assigning property valuation to a state agency and amending the state constitution to cap any property tax increases following reassessment.
State Reps. Jesse White, D-Cecil, and Brandon Neuman, D-North Strabane, have introduced several assessment-related bills including one that created a joint task force to study and make recommendations on the topic. The task force plans public hearings later this year.
A spokesman for Rep. Frank Dermody, D-Oakmont, said the House Democratic leader remained a strong backer of both moratorium and statewide reassessment measures. The fact that some counties use base-year numbers that date back to the Nixon administration -- 1969 to 1974 -- to calculate property values points up the need for state rules on how often reassessment should be done, Bill Patton said.
Drew Crompton, chief to staff to Mr. Scarnati, said any future action by the state Legislature regarding reassessment probably could not override the orders from the Supreme Court and Judge Wettick regarding property valuation in Allegheny County.
"More to the point, I'm not sure that most counties would want to cede their power over reassessment to the state," Mr. Crompton said. "That may be the position of Allegheny County's new executive, but I am not sure that would be the position of the majority of county commissioners."
Mr. Crompton said he would not discourage Mr. Fitzgerald and his allies from lobbying state lawmakers. "But he has not made his case to individual members to date."
Mr. Corbett, a Shaler resident and property owner, was very aware of the controversy over reassessment in Allegheny County, spokesman Eric Shirk said.
"It's a local problem and he believes the best solution is a local one," Mr. Shirk said.
Jake Haulk, president of the Allegheny Institute, a conservative-leaning think tank, has little patience with the county's efforts, both under Mr. Fitzgerald and under his predecessor, Dan Onorato, to delay completion of the reassessment.
Allegheny County wasn't being picked on, he said.
"The county had a lawsuit brought against it and lost the lawsuit," he said. "The fact that the Legislature has not acted to create uniform assessments does not mean Allegheny County can continue to have bad assessments.
"They promised they would have this project done by July to allow time for property owners to make informal appeals and then they said they couldn't," Mr. Haulk said. "This reminds me of the story of the boy who killed his parents and then asked for mercy because he is an orphan."
Some of the anxiety over reassessment reflects a misconception that any increase in property values translates into higher property taxes.
"One important point is not easily understood: A change in assessment is not a change in your tax bill," Mr. Hill, head of the commissioners association, said. Whether a property owner's tax bill goes up or down depends on how that new assessment compares to the average for all properties.
Mr. Briem at Pitt sees irony in most people's contradictory attitude toward reassessment and real estate prices.
"People love to have low property taxes, but they want to live in an appreciating real estate market," he said. "It's tough to have both."
First Published January 15, 2012 12:00 am
