Pa. legislator urges study of statewide reassessment

HARRISBURG - The explosive issue of unfair real estate taxes and unequal property assessments is roiling the political waters in counties across the state, from Philadelphia to Allegheny.

And the idea of having the state take a bigger role in the property tax system, now controlled at the county level, appears to be gaining some support.

State Rep. John Yudichak (D., Luzerne) wants the legislature to create a statewide office of property reassessment to relieve the counties of the financial headaches and taxpayer wrath that result from revaluing all homes and commercial properties. Sometimes counties wait decades to do so, and the new values often are radically different from the old ones - riling property owners.

Yudichak said Tuesday that he would introduce a two-part bill on reassessment. Reassessments are designed to smooth out differences, inevitably they mean that while some property owners will get tax cuts, others are going to get increases.

"It's certainly a volatile issue," said Rep. Robert L. Freeman (D., Northampton), chairman of the House's Local Government Committee, which Tuesday was briefed by lawyers on the state Supreme Court's April decision ordering an Allegheny County reassessment. The court ruled that the system, which uses a base year for property values with no set time to review them, is unconstitutional because it doesn't update for changes in property values over time.

"It highlighted the need to address the issue in a broader context," said Chuck Ardo, spokesman for Gov. Rendell.

Yudichak wants the Legislative Budget and Finance Committee, a General Assembly research arm, to study what goes on in Maryland and other states that have a statewide assessment office and recommend whether Pennsylvania should go that route.

Gov. Rendell would be in favor of that, says Ardo. "He likes the idea," he said, "but he's not quite sure it's doable legislatively."

"We are trying to achieve fairness with property valuation," Yudichak said. "Higher taxes aren't the goal."

Pennsylvania counties do reassessments at widely differing intervals, during which property values can change greatly. State law sets no requirements on when counties have to reassess.

Butler County hasn't reassessed since 1969, and Bucks hasn't done it in over 35 years.

The reassessment date in Pennsylvania becomes the so-called "base year." For example, Montgomery County last reassessed in 1996. Thus, the assessments in Montgomery are supposed to capture what the property was worth in 1996.

Since other counties are using the same system, except for Philadelphia, which has an "ongoing" reassessment, the Allegheny County decision could end up having a statewide impact.

Yudichak's bill also puts a moratorium on court-ordered reassessments.

Allegheny County Executive Dan Onorato, who is resisting a court order to reassess, said Yudichak was "absolutely right" with his idea. "I fully support him. I hope the Allegheny County [legislative] delegation can work with him on this."

Onorato still needs to see details of the Yudichak plan, but said: "The legislature should be talking about a short-term moratorium on reassessments until they come up with a plan for true property tax reform." One aspect that should be studied is whether property taxes are the best way to fund schools, he added.

Onorato said Yudichak understood just how broken the assessment system in Pennsylvania was because Luzerne County also was facing a reassessment controversy. Yudichak said it had just spent $9 million to complete its first property reassessment in 40 years.

A group of property owners is going to court to block the reassessment because the increased values would determine their tax bills, he said.

If the House and Senate approve the Yudichak bill, he said, the study would probably take six months to a year. It would determine how much creating a reassessment office would cost.

Referring to the high court's decision on Allegheny County reassessment, Rep. Scott Petri (R., Bucks) said: "The warning shot is over the bow. The court will do something if the General Assembly doesn't do anything."

In his county, he said, property assessment "is a big issue. No system will be completely equitable, but we have to seek fairness."

Yudichak said Maryland reassessed one-third of its properties each year. There is also a system for allowing property owners, if their taxes go up, to pay the higher amounts in installments.

Douglas Hill, director of the County Commissioners Association of Pennsylvania, said it was worthwhile for Pennsylvania to look at what Maryland did, since it would relieve counties of a major expense.

Reassessment "is about establishing equity" among property owners, he said, "not about increasing a county's tax base." The cost - $75 to $125 per parcel in a county - "is one reason we don't do it that often."