By Jeffrey Kranking, Juris Blogger
Amidst the political backdrop from his decision for the 2012 property assessment, Judge R. Stanton Wettick Jr, has been tossed into the crosshairs as he continues to endure a proverbial beat-down from city officials, the media, and pretty much anyone owning a scrap of land in Allegheny County.
With the media now boasting that the aggregate value of property in the city has been raised 56%, not surprisingly, people are going to be a little upset. Many have been left asking “why did this judge order the new assessments,” or “why did my assessment value double overnight” while others are going as far as labeling Wettick a “political activist” or even “a complete idiot” etc. So I ask, does Wettick really deserve this type of treatment?
For starters, not only did Wettick know that an order to carry out a new assessment would mean that many residents’ property taxes would actually go down, but he was ordered by the PA Supreme Court to do so.
Like many counties in Pennsylvania, the current tax assessment values in Allegheny County are based on a previously set base year figure, in our case, the 2002 assessment value. On its face, there is nothing wrong with periodic property assessments as the Commonwealth neither requires nor prohibits them. But naturally over the course of 10 years, the 2002 assessment values strayed further and further from the actual market value of the properties. And naturally the heaviest tax burden falls on those who can least afford it, owners of properties in declining or stagnant neighborhoods. This is because property taxes are made up a figure based on your property assessment, and a flat tax called the millage rate. When higher end commercial and residential properties continue to be under assessed over a period of time, the millage rate increases causing others to pick up the tax burden.
What we have now is huge disparity in tax assessment value to market value with districts such as Braddock being over-assessed by as much as 16% and Edgewood under-assessed by 35%. Due to this gap in the tax burden and its heavy handed effects on lower income areas, the PA Supreme Court held in Clifton v. Allegheny County that Allegheny County’s Ordinance 45, the ordinance that extended the use of the 2002 base year assessment indefinitely, as applied was a violation of the Uniformity Clause of the PA Constitution. Through an analysis identical to that used with the Equal Protection Clause, the court found that a base year system such as Ordinance 45, though not facially unconstitutional in itself, can and has produced unreasonably discriminative results when applied over a prolonged period of time. Thus the matter was remanded to Wettick to set a realistic timeframe for the completion of a reassessment. More than two years later we find ourselves in the reassessment mess as it stands today.
With all that said, the average Pittsburgher couldn’t care less about the constitutional issues of periodic assessments, and rightfully so. In their eyes, all that matters is that a new assessment means an inevitable and colossal tax increase across the board. Ordinance 45 has delayed the original reassessment from 2005 until now. And Wettick’s recent Court order has extended this mess for another year to allow for a buffer period for the city to process the tidal wave of appeals for the now 2013 assessments (note there were over 90,000 appeals for the 2002 assessment). With yet another delay on an Allegheny County reassessment, Pittsburghers are breathing a sigh of relief, believing they have once again dodged the property tax bullet.
But what most people don’t know or maybe what most people refuse to believe is that a reassessment might actually yield a tax reduction.
As Wettick recently stated to the press, assessment laws knows as anti-windfall provisions will cause many property taxes to go down due to a more accurate reassessment. Once a school district receives the aggregate assessed value of the property in its district, it calculates the millage rate which is basically the remaining taxes that need to be raised to meet the school district’s budget for the year. PA anti-windfall provisions state that the district must reduce its millage rate so that the total amount of taxes levied on properties in the year following a reassessment are the same or less than those of the previous year. The result is a proper redistribution of the tax burden with property assessments more representative of actual market values and lower millage rates for each district.
In Pittsburgh, because the aggregate assessment value has become dwarfed by the ever-increasing millage rate over the past 10 years, taxes from assessment increases of 10 to 40 percent would be outweighed by a lowered adjusted millage. This means that about 3 out of every 5 property owners would see their taxes go down.
So simply put, when assessment values go up, the millage rate goes down. Simple right? Apparently not simple enough for Pittsburgh. What we need now is for City officials to make public an estimated millage rate for 2013 so that Pittsburghers can fully understand how the reassessment will affect them.
This may take awhile, but we now have a full year until the new numbers go into effect. So in the mean time, how about everyone just lay off Wettick.
Jeffrey Kranking is a second year student at Duquesne University School of Law. He is member of the Urban Development Clinic as well as a staff writer for the Business Law Journal. Jeffrey earned is undergraduate degree at the University of Pittsburgh, with majors in both Political Science and History. He will graduate from Duquesne University School of Law in 2013, and can be reached at krankingj@duq.edu.
