Suburbs could learn a thing or two about property taxes from Philadelphia
State law says properties must be assessed at 100 percent of fair market value, but in this region only Philadelphia comes close to doing that.
Mention the word reassessment to taxpayers and as a 2010 state study aptly points out, two gut reactions typically follow: "My taxes are going up" and "My new valuation is flawed."
That has been the case at least since 1683, when the Pennsylvania Provincial Council approved its first property assessment and was soon flooded with more than 100 citizen complaints.
Mindful of the political implications of such hostility, county governments, which under Pennsylvania law are charged with administering tax reassessments, are more likely to wait for a court order to force their hand than to initiate the process themselves.
Consider recent events in Delaware County: A couple from Haverford Township and another from Rose Valley Borough won a court order mandating a countywide reassessment after presenting evidence of "pervasive inequities" in the way the county assesses property. The county's last reappraisal, which cost $7.8 million and went into effect in 2000, was also the result of a court edict. The new valuation is to take effect in 2021.
Even if taxpayers can set aside their anger on the subject, understanding the process seems like an exercise in confusion. We start with a state constitution that says all taxation shall be uniform. This means that buildings and land must be assessed at 100 percent of fair market value. But consider what happens when counties avoid reassessments:
Properties in Delaware County are assessed at an average of 65 percent of market value, which ranks it first among Philadelphia's suburban counties; followed by Montgomery County, 56 percent; Chester County, 54 percent; and Bucks, which hasn't had a reassessment since 1972, 11 percent.
In our region, only Philadelphia, at 98 percent, comes close to the constitutional standard of 100 percent. As part of its Actual Value Initiative, the city has revalued all 580,000 residential and commercial properties within it and is planning annual reassessments at fair market value, starting next year.
Philadelphia isn't often be the exemplar of good government, but its AVI program resembles the reforms urged by the state study. Even though the study's proposals were not acted on by the General Assembly, they are as good now as they were when published seven years ago. Its central recommendation is that each county should be required to conduct a reappraisal at least once every four years.
In addition, the state could mandate automatic reassessments if a county's Common Level Ratio - the ratio of assessed value to current market value - dropped below a prescribed level.
Meanwhile, county governing boards need to explain the realities of reassessment to taxpayers: About a third will pay more, a third will pay less and the rest will pay about the same. Further, by law (except in Philadelphia) the reassessment must overall be revenue-neutral. The politicians will no doubt take a lot of heat, but that's the price of democracy.
Delaware County Councilman John P. McBlain says the prospect of reassessment carries all the joy of having a tooth pulled, but he adds that whole process could be improved if the state stepped in with some clear guidelines, which don't exist now. The General Assembly would do well to provide this shot of political Novocain.