Shine a spotlight on assessments
The real estate tax is the most transparent of all taxes. The property tax is easy to understand and computed annually. The assessments and millage rates based on those assessments are published on the Allegheny County website. Transparency, right?
County officials often say your assessment is based on 100 percent of the market value from January 2012. Our elected leaders also will tell you that the county has no plans to reassess in this century.
If the assessments are outdated and millage rates are adjusted upward annually, a property owner-taxpayer might need more transparency and sunlight to determine whether an appeal is necessary.
Associate U.S. Supreme Court Justice Louis Brandeis once said “ Sunlight is said to be the best of disinfectants, electric light the most efficient policeman.” Your assessment, once frozen under county law, is not the true market value to be used to determine whether you are being taxed correctly. A state board provides equalization factors to each county each year to see if a fair proper transfer tax has been paid. The state Department of Revenue will review deed transfers using this factor to determine transfer tax fraud.
Although these factors are transparent to taxing jurisdictions they are not used to convert the present frozen assessments to current real-time market values for each property owner. If that were to happen more people would file assessment appeals every year.
If Allegheny County wanted to shine a light on the property tax it would enact an ordinance publishing annually the converted real-time market values. These values could be published on the county real estate website and listed in county tax bills.
The state Tax Equalization Board recently published the factors for next year. The factor used for deed transfer monitoring is 1.15. If a home has an assessment of $100,000 here’s the math: a $100,000 assessment is multiplied by a 1.15 equalization factor to arrive at a new converted market value of $115,000.
In effect, a county property taxpayer has been reassessed using this factor. The math is complicated for some but having the county add the new value will let the property owner know what the county and state really thinks his or her property is worth in 2017. By shining a light on the new values taxpayers will be able to make informed decisions regarding a tax appeal.
Since the 2017 appeals deadline is almost seven months away in March, Allegheny County Council and the county executive should end the present ruse where the assessed value is thought to be the true present value.
I would be willing to assist any county leader to have a better understanding of how the common level ratio reciprocal can be used to shine a light on the frozen out-of-date assessments. Here’s the state link.
Elected leaders need to enact a “truth in taxation” law converting present assessments to real-time values before the appeals begin next year. That way, taxpayers will know the true basis of taxation for the property tax. That is government’s best disinfectant.
The writer is a state-certified assessor