It’s a common refrain heard in many communities throughout Allegheny County — I want the same lower property assessment as my next-door neighbor.
County Common Pleas Judge Alan Hertzberg has cleared the way for homeowners to make just that argument, although in a much more sophisticated fashion.
Under a ruling issued last week, property owners will be able to argue during assessment appeal hearings for a cut in the taxable value of their homes based on the common level ratio in their neighborhood rather than the one used for the county as a whole.
The county assessment board had petitioned Judge Hertzberg earlier this summer to grant taxpayers such authority. The request was in response to a ruling the judge made in May granting property owners the right to make such arguments before the court’s board of viewers, a step up from the county appeals level.
“This is a victory for the taxpayer,” said Mike Suley, a county assessment board member who pushed to give property owners the option of using neighborhood common level ratios.
Mr. Suley has argued that the ratio, the number used to calculate taxable value at assessment appeal hearings, can vary from neighborhood to neighborhood and in some cases can be lower than the average countywide.
In such cases, using a neighborhood ratio, known as the common law method, can provide greater relief to property owners who win appeals.
For instance, a house with a $200,000 market value would be taxed at $109,000 using the current common level ratio of 54.5%, as calculated by the state tax equalization board. But if the property’s neighborhood ratio was found to be 35%, it would be taxed at $70,000.
Ed Hirshberg, an attorney who handles commercial, industrial and some residential appeals, said the judge’s ruling gives legal heft to the “my assessment should be just as low as my neighbor’s” argument but on a much more advanced level.
He stressed that homeowners can’t just “cherry pick” three properties in their neighborhood and say they want the same assessment as those. They have to define the neighborhood and provide statistical evidence that the ratio within those boundaries is different than that countywide.
“It’s got to be a more scientific analysis,” he said.
Mr. Hirshberg said that property owners have had the right to make such arguments for decades. Mr. Suley said the practice was used by taxpayers in the 1990s during his prior stint on the assessment board but ended after the county switched from a government run by a board of commissioners to one overseen by a county executive.
John Silvestri, an attorney who filed the motion to force the board of viewers to accept neighborhood ratios, has said that numbers calculated for one client showed ratios in Ross at 53.8% for 2022 and 53.17% for 2023. The ratio in Lawrenceville was computed at 28.7%, nearly half the 54.5% used countywide.
Allowing such evidence to now be considered during county assessment appeals “is a game changer,” Mr. Suley said.
“This is a big deal,” he said.
But Dominick Gambino, a former county assessment director who is now a tax consultant for school districts and municipalities, is no fan of the ruling.
He described it as “allowing the gerrymandering of ratio studies” when the real solution is a countywide reassessment to correct the growing inequities in the system.
“The result is perpetuating the regressive nature of the assessments,” he said of the ruling. “We have indeed reached the end of the road to absurdity.”
In a separate ruling, Judge Hertzberg ordered that school districts and municipalities cannot “categorize or sub-classify properties” in doing neighborhood ratio studies.
In addition, taxing bodies can use such studies only to “dispute taxpayer evidence of the assessment-to-value ratio of similar properties of the same nature in the neighborhood.”
Mr. Hirshberg and Sharon DiPaolo, an attorney who specializes in assessment appeals, said the judge made his decision after the Pittsburgh Public Schools submitted a ratio study involving Downtown office buildings to fight appeals to lower the value of those properties.
They argued that singling out certain categories of properties, such as office, isn’t permitted under the uniformity clause of the state’s constitution.
“They are not allowed to say we’re going to treat residential this way and commercial that way,” Ms. DiPaolo said.
The school district, Mr. Hirshberg added, was “turning a property-owner protection into a taxing body weapon.”
However, Ira Weiss, Pittsburgh Public Schools solicitor, saw it differently.
“It is concerning when taxing bodies are treated differently than property owners because the assessment law states that taxpayers and taxing bodies have the equal right to participate in the process,” he said.
He added that the district is reviewing the ruling and considering its next steps.
First Published: September 10, 2024, 9:30 a.m.
Updated: September 11, 2024, 4:01 a.m.
