Pa. bill would fix tax spikes

The loophole in state law allows school districts to seek property tax increases.

HARRISBURG, Pa. (AP) — Christine Joyce’s latest property-tax bill has dashed her dream to move from an old house with a tiny kitchen to a brand-new place in the country with a spacious yard.

Joyce and her husband, who live in Pottsville, were planning to build a house on land they bought in 2005 near the Blue Mountain ridge in East Brunswick Township. But the Blue Mountain School District is demanding $795 in taxes on the parcel this year, nearly double what the couple paid the previous year and almost $150 higher than the tax bill for their current home.

“These school taxes doubled with nothing on the land,” said Joyce, 38, a registered nurse. “When the house is built, they’ll be astronomical.”

The Joyces are victims of what lawmakers say is a broken property-tax system that has led some school districts and municipalities to pursue selective “spot reassessments” in order to collect more local taxes — causing tax-bill sticker shock for new owners of homes, businesses and farms.

The couple attributes their tax increase to a spike in their property’s assessed value that occurred after they bought it because the school district successfully argued to county tax officials the land was severely undervalued when compared to the market price.

Pennsylvania legislators have pushed this year to close a loophole in state law that allows school districts and local governments to seek an increase in a property’s assessed value if a sales transaction reveals a substantially higher market value.

Gov. Ed Rendell dealt them a setback last week. He vetoed a pair of bills that would have limited the ability of municipalities and school districts to make such appeals in most of the state’s 67 counties.

Just as taxpayers have the right to appeal assessments they feel are unfairly high, local governments are entitled to similar remedies if they believe the assessments are unfairly low, the governor said in his veto message.

Local school officials argue that in the absence of up-to-date countywide property valuations, they need to be able to pursue appeals of individual assessments to ensure that owners are paying their fair share.

Schuylkill County has gone more than a decade since its last reassessment, so the Blue Mountain School District has turned to individual assessment appeals in the past four or five years, garnering close to half a million dollars in the process, district business manager Andrew Smarkanic said.

“It allows us to bring extra revenue in, and it also keeps taxes stable for our senior citizens,” Smarkanic said.

It’s unclear how widespread the practice is, but the Pennsylvania Association of Realtors has identified at least eight other counties where it has occurred: Allegheny, Cambria, Carbon, Chester, Erie, Lehigh, Northampton and Washington.