Legislature Passes Property Tax Reassessment Reform—Now What?

The battle over property tax reassessment in Washington County has been going on for five years now. Amidst all the fighting, the only thing nearly everyone involved could agree on was the inability of the state legislature to ever actually pass any meaningful reforms on how counties perform reassessments.

Well guess what? The most comprehensive reassessment reforms in over 50 years have cleared the State House and Senate and are heading for the Governor’s signature. Senate Bill 66, a bill containing legislative language written by a bipartisan group of local legislators including myself, Brandon Neuman and Rick Saccone, is the culmination of years of exhaustive work on the issue of property tax reassessments through our House task force on property valuation and reassessment.

So what does this legislation do?

The bill will standardize reassessment processes that wildly vary among Pennsylvania’s 67 counties, and that often lead to dramatic property tax increases for home and business owners. Under the bill, the responsibilities of the State Tax Equalization Board are moved under the umbrella of the Department of Community and Economic Development to use more modern resources to carry out the technical aspects of a reassessment.

The bill also implements a number of reforms recommended by the task force and through the findings of the 2010 Legislative Budget & Finance Committee report on reassessment. These reforms include creating an operations manual to be used by counties when reassessing; creating and maintaining a statewide database for counties to use and report property values; developing and maintaining statewide training programs for anyone involved in the valuation of property during a reassessment; and developing contracting standards for assessment services, based on standards published by the International Association of Assessing Officers. Additionally, the methodology will be made public and all data and calculations are the property of the county and the Commonwealth- this is all info that used to be a “proprietary” secret.

These may all sound like little details, but little details are what reassessment is all about. Unless you have a good framework in place, you’re just wasting taxpayers money on a reassessment that cannot mathematically succeed. By modernizing the methods and forcing counties to develop some simple uniform standards, we will be able to look at the big picture of property values in Pennsylvania in a way we never have before. We’re also saving millions of dollars and reducing the size of government by eliminating the State Tax Equalization Board. 

Sounds great, but how does this legislation impact what’s happening in Washington County?

It’s important to realize what reassessment is really supposed to be about and maybe more importantly what it isn’t supposed to be about. Reassessment is supposed to be revenue-neutral, which means taxing entities like school districts shouldn’t see additional tax dollars as a result. When you reassess, you update the dollar value of a mill. That mill is then multiplied by the millage tax rate set by the school district to determine how much you pay in taxes.

When a county reassesses, the value of a mill increases. State law says the school district is supposed to readjust the millage rate back down to avoid a windfall. It sounds great in theory but in reality, there are no real penalties for a school district failing to lower the millage rate back down. The only remedy for the taxpayer is to sue the school district after the fact, but by then it’s too late; the only way to make the taxpayer whole is to return the money. The only way the school district can come up with that kind of money is to raise your taxes. It’s a vicious cycle. If anyone doubts it can happen this way, just look at Allegheny County and their recent reassessment debacle.

Think about it—why would school districts like McGuffey and Washington give tens of thousands of taxpayer dollars in legal fees to Susan Mondik Key, the lawyer aggressively pushing for the reassessment in Washington County, when the whole process theoretically shouldn’t bring the school districts any additional revenue? I’m personally convinced they are trying to use the old reassessment system to pass massive backdoor property tax increases. There’s just no other reason that makes any sense, and no one has been able to give me an answer for years now. As if any more evidence of the absurdity of this scheme is, attorney Susan Mondik Key actually hired a Philadelphia-area public relations firm to promote her in the media as a defender of the taxpayers on this issue, which couldn’t be further than the truth. She and her school district clients are a big part of the problem here.

This is a disaster waiting to happen not just for taxpayers, but for businesses as well. When Allegheny County reassessed, there was a mass exodus north to Butler County and south to Washington County. Because the tax rates were lower, job creation in both counties thrived. Why in the world would we give up this advantage just because some lawyer managed to convince a couple of school boards a reassessment would be a cute way to fleece the taxpayers without voting to raise taxes?

So instead of being the last county under the old system that has been universally acknowledged as horrible by anyone who understands it, I want Washington County to be the first county to reassess under the new system. I am in negotiations with the DCED and the county commissioners about the possibility of making Washington County a pilot program for these new reassessment standards. By providing technical support, professional expertise and hopefully a little cash, we can work together to ensure we’re reassessing the best way possible to protect the taxpayers from inefficiency and illegal tax increases. It really has the potential to be a win-win.

These reforms should ensure the reassessment process stays true to its intended purpose and will not be used to generate excess revenue beyond the anti-windfall provisions set forth by law, resulting in a reassessment with minimal confusion and a strong commitment to protecting taxpayers. And if anyone tries to exploit a loophole to illegally raise taxes, I’ll meet them at the courthouse steps myself, because it isn’t going to happen on my watch.

This isn’t just about numbers on a spreadsheet; it’s about keeping Washington County an affordable place to raise a family, or retire on a fixed income or run a small business which creates local jobs. It’s really important that we don’t allow those with ulterior motives to screw this up, because if they do, we’ll be paying- in more ways than one—for decades to come.