Archive for May, 2012

Pennsylvania Supreme Court Gets It Right

May 17, 2012 | Posted by Ken Eisner | No Comments

The Pennsylvania Supreme Court, in a 53 page opinion, recently ruled that Allegheny County’s property tax reassessment system is unconstitutional. While the opinion is not as riveting as a John Grisham legal thriller, it is a very well reasoned, logical, and most importantly, correct decision.

Specifically, the Justices found that the County’s use of a 2002 base year assessment system violated the Uniformity Clause of the Pennsylvania Constitution because it is unfair to property owners with decreasing or stagnant fair market values. To illustrate this point, the Court reviewed post-2002 property value trends in various municipalities in the Woodland Hills School District. While property values in Braddock have decreased by more than 15%, property values in Edgewood have increased by 35.87%. Under the 2002 base year system, a property owner in Braddock would have to appeal his assessment in order to be treated equitably. It is a fundamental premise of constitutional law that a person should not be required to resort to judicial action to obtain equal treatment under the law.

Although the lower Court held that the equality in real estate taxation required by the Pennsylvania Constitution could be obtained only through annual reassessments, the final decision of the Supreme Court does not go so far. Recognizing the cost and impracticality of annual assessments, which, according to Allegheny County, cost $25 million for the 2002 reassessment, the Supreme Court held the Constitutional requirement of uniformity in taxation does not require scientific exactness.

As the Court states, “It seems obvious that the use of a ase year system with its attendant economies, stability, and predictability would not implicate the Uniformity Clause, if for example, a county conducted adequate periodic reassessments, or if it could be shown that property values in a particular county remained relatively unchanged, or those values had virtually the same rate of change. It may well be true that a base year system, if unadjusted, will inevitably lead to taxing inequity. But those inequities, in a particular county, may take years to rise to the level of constitutional infirmity.”

Rather than attempting to determine a specific assessment system, the Court remanded the matter to the trial court to determine a process for Allegheny County to execute a countywide reassessment and to establish a realistic time frame for its completion.

Allegheny County Executive Dan Onorato is urging the legislature to place a temporary hold on the reassessment, allowing Allegheny County to continue to use the 2002 reassessment as a base year while the legislature develops a statewide uniform assessment policy. Onorato has also threatened to file a federal lawsuit claiming that the Court’s decision violates the Constitutional mandate of equal protection because the decision requires Allegheny County to conduct a reassessment, but does not require other Pennsylvania counties to do the same, despite the fact some counties have not undergone a reassessment in decades. This threat may be a maneuver to encourage the legislature to act quickly.

We’ll keep you posted in later editions as the plot thickens.

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