Last week, the State House of Representatives unanimously passed House Bill 2137, which imposes a statewide moratorium on all court-ordered property tax reassessments. If this sounds somewhat familiar to you, it’s because the House passed a nearly identical bill, House Bill 1696, last June. After inexplicably being amended in the State Senate, the bill was deemed unconstitutional and earned Governor Corbett’s first and only veto.
But a whole lot has happened since last June, and now it appears both the public and the politicians are beginning to understand why a temporary moratorium on court-ordered reassessments is so important. The high-profile reassessment values imposed in Allegheny County were so outrageous, Allegheny County Executive Rich Fitzgerald was willing to be thrown in jail to avoid certifying them for 2012. In Washington County, the County Commissioners have appealed the court-ordered reassessment (forced by a lawsuit by McGuffey and Washington School Districts) all the way to the state’s Commonwealth Court. Why are reassessments such a big deal all of a sudden?
Despite the claims of the people behind these lawsuits, this is a rare instance of elected officials at the county and state level working across party lines to protect taxpayers from property tax increases. I’ve been saying it for nearly three years; now I have solid evidence to back up my theories.
As part of the negotiations to get the moratorium bill passed last June, I also managed to quietly get two resolutions passed at the same time. House Resolutions 343 and 344, sponsored by me and Rep. Brandon Neuman, established task forces designed to really examine the problems with the reassessment process and examine ways to get the mess untangled once and for all.
The Task Forces reviewed the reassessment processes in different counties within Pennsylvania and existing standards in other states, published by the International Association of Assessing Officers. We made it a point to include all the stakeholders involved in the reassessment process, including the PA School Boards Association, County Commissioners Association, Assessors’ Association of Pennsylvania, Pennsylvania State Tax Equalization Board (STEB), and the PA Department of Revenue. After months of daylong meetings in Harrisburg, the Task Forces released their reports this week, and the results confirmed what many of us suspected all along.
The reassessment process was never designed as a mechanism to raise tax revenue; it was designed to serve as a way to adjust property values based on sales and other factors to make sure properties were fairly and equally taxed over the years. There are “anti-windfall” provisions built in, which were supposed to make sure millage rates went down as property values increased, but there are no realistic enforcement mechanisms to prevent a school district (or a county or a municipality) from reaping huge property tax increases as a result of a reassessment.
School districts disagree with this premise, but are unable to explain why they are spending tens of thousands of taxpayer dollars in legal fees to force a reassessment they aren’t supposed to profit from. Their claims don’t pass the smell test; they have hijacked the reassessment process in an attempt to exploit a loophole and increase our property taxes, then hiding behind state law. It’s despicable, and until we pass legislation to close the loophole, we cannot allow these court-ordered reassessment lawsuits to continue.
The Task Force reports go much deeper, laying out a series of technical changes that may seem boring and inconsequential but are actually crucially important.
It became clear in our meetings that the problems with the current system create a “garbage in/garbage out” scenario, where no matter how well-intentioned a county may be, there is just no way to conduct a truly fair and accurate reassessment under current law. We also detailed ways to lower the cost and increase the accuracy of the reassessment process through implementing real-time uniformity in reporting property sales, creating standard data entry codes, providing model contracting standards for counties and making dramatic but necessary changes to the State Tax Equalization Board, a group you’ve probably never heard of but plays a huge role in how reassessments are conducted.
I’ll be the first to admit this is about as nerdy as it gets, even for government work. But we took our task seriously, which meant diving into details most people would rather gouge their eyeballs out than deal with in any detail. We identified lots of problems, and a decent amount of solutions. The goal was to work towards “minimally invasive” solutions, approached requiring the least amount of legislation possible. On some areas there was nearly universal consensus, and we should be able to get those recommendations into law in a matter of months. Other areas require further work and review by policy makers, taking into account issues of constitutionality and legislative reality, but we are much closer to fixing the reassessment mess than we have ever been before.
All of our progress will be for naught, however, if the school districts and their attorneys are successful in forcing court-ordered reassessments on us before we have a chance to make these changes and close the loopholes. By restoring the reassessment process to its original intended use, we eliminate the ability to use reassessment as a weapon to dramatically increase property taxes, which should eliminate these ridiculous lawsuits being funded on both sides by taxpayers. But the school districts and their lawyers didn’t come all this way to stop now; expect to see lots of heightened and misleading rhetoric in the weeks and months to come as they try and fight the moratorium and our reform efforts with everything they’ve got.
I welcome the debate and refuse to run from the fight; it’s a fight worth winning for every property owner in Pennsylvania. And now that we’ve got the facts on our side, it’s a fight I know we can win.
Read the full reports of the Reassessment Reform Task Forces here.