Wednesday, June 06, 2007

Assessment System Thrown into Turmoil

Bookmark and Share

29 Comments:

Anonymous Anonymous said...

In the assessment case cited, “The plaintiffs argued the base year would violate the uniformity clause of the constitution because values in some communities are dropping while other's rise, creating an inherent inequity.”

Let’s lower the Mt Lebanon assessments to the level of houses in Wilkensburg, Duquesne, and Braddock then we won’t violate the uniformity clause and judge wettick can go . . .

June 06, 2007 3:44 PM  
Blogger Bill Matthews said...

Great News!!!

The base year plan was well intended, but a bad idea. Freezing a mess left us with a frozen mess.

What we need now is a commitment from the Commission and School Board that any increase in the tax base will be revenue neutral. When the tax base goes up, the tax rate must come down.

When more money is needed for education and essential government services, our leaders should step up to the plate and do what needs to be done to sustain the Community. No more back door tax increases.

June 06, 2007 4:40 PM  
Blogger Matthew said...

I liked how it was constitutional in the other 66 counties, but only Allegheny county has declared it unconstitutional.

June 06, 2007 6:28 PM  
Anonymous Anonymous said...

I think Danny O said it best today. He will not do another assessment. This is far from over. If Allegheny County does another assessment, the 66 other counties in P.A. will be forced to.

Bill, do you think your house is worth what your assessed price is? I'm thinking if everyone was treated fairly you would get a huge tax increase (possibly $300 a month)

I do agree with you on the no more back door increases. If somebody purchases a house, it should not be reassessed at purchase price. It should be reassessed with all the other houses fairly.

June 06, 2007 7:33 PM  
Anonymous Anonymous said...

I'd love to see our county extract itself from this property tax morass, conditional on:

1. Our local taxing bodies taking a revenue neutral approach (nod to Bill Matthews)
2. The "computer-assisted reassessment" Wettick orders is completed in a fair and timely manner. I worry mightily about the algorithms they'll use to assign new values.
3. Subsequent reassessments are done in an equitable and timely manner (this is the issue that started this whole mess).

Unlike the little ant, I have low hopes. So for now, I'll shake my head and wait for this new plan to implode. **Anonymous Mom of 3**

June 06, 2007 7:38 PM  
Blogger Jefferson Provost said...

It's become obvious to me that the terms "fair," "fairly," "fairness," etc., have absolutely no meaning in this discussion. Everyone seems to think that what's fair is whatever serves their interests the best.

Assuming that all homes are reassessed frequently, I can't imagine what could be more fair than assessing recently sold homes at their purchase price. Obviously, the buyer believes that the home is worth at least what he paid for it, so how can he turn around and argue that the house is worth less without looking like an idiot or a hypocrite? The sale price is the market value.

In addition, if newly sold homes are reassessed a their purchase price, it provides some "grounding" for the rest of the assessment system, when the recent sales are used as comps for homes that haven't been sold in a long time.

June 06, 2007 10:46 PM  
Anonymous Anonymous said...

Thinking like Matthews posted is why people move!

we don't need the c ommissioners and school board messing with assessments

June 06, 2007 10:48 PM  
Anonymous Anonymous said...

Agreed J. Provost. Like I said before, and speaking from both professional and personal experience, the leading complaint from most Allegheny County residents IS NOT that their own property is improperly assessed, but instead that their neighbor's is off thus resulting in lower taxes for the neighbor. "That's not fair," we cry. However, if the system is fixed to bring your neighbor's assessed value in line with reality it is unlikely that you will realize any noticeable decrease in your own taxes.

June 06, 2007 11:27 PM  
Anonymous Anonymous said...

Jeff, you like the idea of newly sold homes being reassessed at their purchase price, but this is exactly what has made the system so bad/unfair. And when I say unfair, I mean a family could be paying $400 per month more than their next door neighbor who lives in a much bigger house. Just look at the Allegheny County website.

No computer assissted reassessment will fix this, as it hasn't in the past. You are basically saying do what has always been done, which has got us to a place where school districts get back door tax increases from new home owners, and those lucky people who own $400K homes are still assessed lower than their neighbors who purchased $200K homes.

June 07, 2007 7:36 AM  
Anonymous Anonymous said...

Frequent assessments - good, fine, go. That was the threat/promise made when the county initially overhauled the system. Infrequent and sporadic assessments caused gross inequities across the county. I supported the idea of frequently scheduled reassessments.

Purchase Price - When we successfully appealed in 2001 and presented a carefully designed spreadsheet to show comparable sales on our own amazingly uniform street, we were told by an assessor that "We do not believe home sale prices to be a reliable indicator of market value." ????? What else would more reliably determine MARKET VALUE?
**Anonymous Mom of 3**

June 07, 2007 9:20 AM  
Anonymous Anonymous said...

Here we go again. No one is barking about what they are paying, but instead they are barking that their neighbor is not paying enough.

The cure to this problem is to simply allow the County to perform spot re-assessments (or the Municipality to perform spot appeals), which I don't believe they currently have the authority to do now. For example, when a house on a street sells for $400,000, the houses that are still assessed at $200,000 (since they haven't been sold for decades) are reassessed or appealed. Certainly, the drawback here is that senior citizens etc., will be disadvantaged or perhaps unable to afford their increased property taxes. I'm not sure how you remedy that, without some form of need-based exemption similar to the homestead exemption that currently reduces everyone's assessed value by $10,000.

Unfortunately, I think we all need to learn to accept that just as every house is different and every neighborhood is different, there will always be differences and perhaps inequities in a property tax system based solely on the value of a home.

I don't, however, buy into the arguments that Mt. Lebanon is (a) any more screwed up than every other municipality or (b) somehow more at risk of losing its current homeowners or potential new homeowners.

June 07, 2007 10:23 AM  
Blogger Mike Madison said...

The assessor's comment isn't as crazy as it sounds. Whether selling price = "market value" depends on the characteristics of the market. For example, selling price is much more likely to be "market value" in a fully competitive market where buyers and sellers both have full information about what they are buying and selling, and where the market has no other defects -- such as collusion between the parties. I can't know what the assessor had in mind, but I suspect that the Allegheny County residential real estate market -- or any residential real estate market -- falls considerably short of a fully competitive market.

June 07, 2007 10:31 AM  
Anonymous Anonymous said...

Mike - I agree that the sales price as market value determinant is imperfect, but "arm's length sales", a.k.a. comparables, are in any given period the best basis of market value and industry standard.

The troublesome aspect is finding a good comparable. Howls of protest arose after Sabre System's first pass through Mt. Lebanon. People who lived near Virgina Manor or the estates on Hoodridge, Woodhaven, insert beautiful street here, were stunned to see their more modest houses compared to these manses. It seemed that Sabre didn't research our area well enough to appreciate the selling distinctions. Anywhoodle...

From a sales-based value, assessors can then factor in hard/true stuff like inflation/deflation indices to account for boom/bust/normal periods, slightly softer stuff like the value an addition/renovation adds, and mushier items like curb appeal.

That was the original plan and I was on board with it. We appealed because we felt our assessment was ~20K high. We got a little more and we've obviously benefitted from the freeze on that 2001 value, but I'd be happy to return to the first assessment reform plan.
**Anonymous Mom of 3**

June 07, 2007 12:14 PM  
Anonymous Anonymous said...

I really disagree with assessing the house at purchase price. It may be market value (at that time) for that house, but all the neighbors get a break. What we don't need is to screw the new home buyers out there. If somebody lives in Bethel/St Clair and wants to move to Mt Lebanon, we should want them to. If we assess them at purchase prices and not the neighbors, they won't come here, their taxes could double or triple, while their new neighbors pay much less...."welcome to the neighborhood!"

If we do market price (what it sells for), somebody could pay $200K for a worn down mansion, put $300K into, they will assessed at $200K when it is worth $500K. What a joke. As an earlier poster mentioned, sales price includes high end appliances, possibly furniture, carpet, elite air conditioning, etc. Nobody should have to pay property taxes on these things forever, these are temporary items. This is one of the reasons why everything is unfair right now.

Houses in the neighborhood should be assessed similiary, with the only difference being the size of their house (and possibly lot). I don't care if you purchased your house 50 years ago or purchased it last month. Market price is market price, market price should not be assessed price. You should be able to look at an entire neighborhood, and see every single house in the same range, with the smaller ones being proportionately lower than the average ones, and bigger ones being proportionately higher than the average ones. I don't care if you have the best carpet, the best toilet, or the worst toilet, you should be taxed on the house/yard size/marketability of the street, period.

June 07, 2007 1:20 PM  
Anonymous Anonymous said...

Property taxes would not be a problem if we had reasonable school taxes.

Why look at the effect? Go to a school board meeting and complain about the real problem.

Tell the school board you do not support their spending - let them solve the problem of inflated contracts and building programs!

June 07, 2007 3:09 PM  
Anonymous Anonymous said...

Anonymous 1:20:
First, a county-wide assessment system would apply to BP and USC, because they're in Allegheny County too.
Second, I don't believe anyone truly advocates solely assessing at sale price. They propose using sale price as a basis for both the sold property and its identified comparables.
Third, in a decent assessment system, assessments will be frequent for all houses, ensuring that no property's assessment is woefully outdated.
**Anonymous Mom of 3**

June 07, 2007 8:39 PM  
Anonymous Anonymous said...

The u S Szupreme Court says 2% per year assessment increase is fair for people who don't move. They also allow assessment at market price for new homebuyers.
This all occured because the Supreme Court said Proposition 13 is constitutional. Mike See 505 the Hahn case)

June 07, 2007 11:19 PM  
Blogger Mike Madison said...

No, Hahn did not hold that Proposition 13 is fair. Hahn held that Proposition 13 is not constitutionally unfair and (in shorthand) is not irrational. More specifically, it rationally furthers a legitimate state interest. Meaning that the Court gave Proposition 13 the least demanding form of constitutional review that the Court currently applies. In legal terms, that's hardly an endorsement. Often, the Supreme Court concludes that foolish or unwise laws are nonetheless constitutional.

June 08, 2007 6:00 AM  
Anonymous Anonymous said...

With a nod to Mike for pointing out that the link I gave was an anti-tax organization, I will admit that I gave that link because it was most in line with my views. I did review a number of sites both for and against the Market Value approach to real estate taxes.

Reading this blog has been very interesting. I do not see a consensus on what approach to take to real estate taxes. Listen, the only true 'fair' way to tax people is to consistenly reassess ALL homes. By 'Fair' I mean that everyone pays their equal share based on the house they own. Now, this approach does not bode well for the elderly community staying in their homes but the State does have a program that helps these people with their tax bills. Effectively this would shift the tax burden from the elderly that cannot afford their taxes in the state to ALL residents of the state. Now personally, I think this would tend to keep our property values down (since taxes will go up with each reassessment) but it may allow the community to keep the tax rate the same or lower (a revenue neutral approach as Bill Matthews points out).

I think this idea has been floated here before but there is some opposition to it due to what I will lovingly refer to as the 'what about the old people clause'. My concern would continue to be that I feel we cannot tax older people out of their homes. I believe parts of Act 1 (not the tax shift referendum that we just voted on, but the part that was not so public) were intended to take revenue from gaming and give it to elderly residents to help them afford their real estate taxes. I think about this more and IF Rendell keeps his promise to give the gaming revenue to older citizens for real estate tax relief (ok, ok, a big IF!) and we instituted a program where assessments were done consistently, then I could live and not complaing (much!) about that system.


I suppose I have come to the conclusion that most people seem to want something 'fair'. What is more fair than to have your (and your neighbor's) property assessed every five years or so? Ok, ok, lets not yet talk about whether or not it can actually be done, but I wonder if this would at least not be the most fair approach and then we can take it from there.

Good thing about this blog....I know I wont have to ask for peoples thought's. I'll get 'em anyway!


*CitizenA*

June 08, 2007 3:40 PM  
Anonymous Anonymous said...

The only way to keep things fair is to not assess a home on sales price. All that does is screw the new home owner while giving everyone else a break.

Every house on the street should have similar assessments with the only difference being the size of the house/lot. Sure, base it on what the sales price was, but don't just stick it to the new home owner.

June 10, 2007 11:37 AM  
Anonymous Anonymous said...

High-end houses are under assessed and low-end houses are paying more than they should. The result is a reverse tax-shift to lower income folks.
Thank certain PTA members for campaigning against the taxation to higher incomes in the Act 1 referendum we had in May.

June 12, 2007 11:08 AM  
Anonymous Anonymous said...

I disagree that higher end homes aren't paying their share.

Of course, other than the usual unfairness mentioned above (houses that were sold in the past 5 years are assessed much higher than their neighbors), I see $500K homes having taxes of $14K a year. I believe that is too much. I think the lower prices houses are not paying their share.

June 13, 2007 10:31 AM  
Anonymous Anonymous said...

I believe there are many many homes that are not paying their share - across all sizes of homes.
I believe that fair current market value assessments would make the system fair.

I was a property owner in MD for 13 years - through 2 homes and one commercial property. They reassess every 3 years; it's a state system. I learned there how to appeal an assessment; I could give lessons. There is a great deal of misinformation here about appeals and about how reassessments would/should happen in a regularly reassessed system.
I cannot quote exacts but it is a combo of purchase price increases for comparable homes in sq ft, bedrooms, additions, etc, plus building permits (our township report brags on the $$ in building permits but no one wants to reassess any of that building?). Some years they have assessors on the street in your neighborhood; some years the computer just adds a % (while some other neighborhood is getting the street reassessments). You have the option to appeal. Big books of assessment printouts were placed in the public libraries and you could look at your whole street. When I moved here in the 80s and went to the public library looking for such data, they could hardly believe me. At least the Sabre debacle got
info more public.

I was fairly assessed here for 15 or so years (at purchase price) while neighbors who had enlarged the same basic house to 3 times the sq ft paid the exact same as I did. Now I am underassessed (due to improvements)and I think the base year system is just a continuation of the ugly little secret of Pittsburgh politics. Keep the taxes low so there's less pressure to raise salaries.

June 13, 2007 6:49 PM  
Blogger Jefferson Provost said...

Taxes here are low? That's a joke, right?

June 14, 2007 7:49 AM  
Anonymous Anonymous said...

Why base school taxes on one's success, home value or income?
Doesn't everyone get an equal return from the school district regardless of the neighborhood they live in?
I suggest... why not create a tax system that is based solely on the amount of land owned.
That is... if you own 1/4 acre you pay say... $2M, 1/2 acre... $4M, 1 acre... $8M, etc. etc., for residential zoned property.
Multi-family and business zoned property could be taxed at a higher rate, or maybe floors or units could be a multiplier?
By going with this system, first you get rid of the mllions spent reassessing homes, which has never been an equitable process!
Its fixed, a home owner knows from the start what his taxes are, if the district needs to raise revenue they raise it to everyone equally.
Our current system punishes people for success. If my neighbor can afford to update his home through additions, new kitchen, landscaping etc. etc., more power to them. Their improvements only add to the value of the neighborhood. The kids still enjoy the same education!
I like to hear if anyone agrees.

June 14, 2007 9:28 AM  
Anonymous Anonymous said...

If you pay property tax of $15,000 in the Foster Area, $40,000 in Jefferson, or $3,000 in Lincoln it still costs $13,100 to educate your child.

June 15, 2007 11:08 PM  
Anonymous Anonymous said...

If you want to see how Mt. Lebanon homes are unfairly assessed, check out all of the School Board members homes. Those owning expensive homes are grossly under-assessed. (Especially the board member in the Foster neighborhood!) It's kind of funny that they challenged all those people that bought homes here in the past few years and forced them to be assessed at purchase price. Seems a little hypocritical to me!

June 16, 2007 8:03 AM  
Anonymous Anonymous said...

Maybe I am looking a the wrong Board member but the one I know has an assessed value of $176,000 and a market value of $185,000. Is that what you mean by 'grossly underassessed'? Seems right if you are talking about 2002 values and in that neigborhood homes for sale arent listed for too much more than the market value listed. Perhaps there is a different Board member in Foster?

Hey, listen, I am no fan of the incumbents, but if you are going to bring it, bring it strong! lol.

*CitizenA*

June 16, 2007 6:01 PM  
Anonymous Anonymous said...

Check out the school board member on Hoodridge Drive. Compare her assessed value to homes that have sold in the past few years. Make sure you look at the square footage of her home. I'm sure she could sell her home tomorrow for almost twice the amount of the assessed value. (Check out listings on Howard Hanna.)

Her vote defines HYPOCRISY!!

June 16, 2007 10:45 PM  

Post a Comment

<< Home