At the last Municipal Discussion Session, Dave Brumfield brought up school district assessment appeals. You may recall that Dave thought it would be a good idea to share the expense of appeals with the school district. This was when he was under the impression that the school district would be going after both underassessed and overassessed homes. Josephine Posti denied that she ever said anything about underassessed homes. Well, Josephine brought up appeals with Dave again. The most recent agenda shows that school district assessment appeals may be a topic for this Tuesday's Discussion Session. http://mtlebanon.org/archives/35/Discussion%20Session%2007-23-12.pdf Dave had mentioned at the last meeting how he THOUGHT he understood the school district's plan to be going after underassessed homes next year, but now he is not so sure. Posti claims that they were never planning to go after underassessed homes. Interestingly enough, this letter went out to some of the commissioners today, which I was cc'ed, and ties in with the whole assessment topic. Even though it was signed, he would rather not have his name published on Lebo Citizens. I am reprinting it with his permission. Here it is:
In today's Almanac in the deed transfers it shows Joe D's property recently transferred at $650,000. Though that conflicts with the sale price reported on the county site of the sale dated 6/18/2012 at $550,000. Don't misunderstand I'm not singling out Joe because I have a vendetta against him, today's paper only brought the assessment fiasco to mind and his property is a good example. It also appears to support James [Fraasch]and Tom Moertel's conclusions.
The 2013 assessed value on Joe's property is $345,000! Since the sale took place in 2012 and his 2012 assessed value is $187,000 the inequity of the system looks even worse. The difference being $463,000 (or $363,000 if the real sale was $550,000). Still the average home value is around $245,000!
So let's look at this another relative way. What does Joe's property have to do with me or any other homeowner. If the deed transfer is accurately reported in the almanac, if Joe's place were assessed at it's "fair market value" and isn't that what the reassessment is suppose to reflect, the $650,000 deed transfer IS the "fair market value." It is what a buyer is willing to pay and what the seller is willing to accept.
That means there is $305,000 of taxable value the school district and municipality is missing out on IN 2013 AND EVERY YEAR UNTIL NEW ASSESSMENTS. With a 27.13 SD millage rate that's approximately $8,300 in actual uncollected taxes each year from just ONE property. Looks like the muni misses out on approximately $1,600/yr due to underassessment. 53 homeowners wouldn't have to chip in $30/yr for Kelly's rec plan from just this one property if correctly assessed.
So, if you/they pursued that fair value they could essentially give say 15 senior citizen homeowners a $20,000 exclusion and still remain revenue neutral. They could give 30 homeowners a $10,000 exclusion. They could give 60 a $5,000 exclusion. Or 120 a $2,500 exclusion.
And how many high priced homes are paying less than their fair market value based on recent sale prices and reassessed values in Lebo?
I find it horrible that the school district will spend $150 arguing against a homeowner that may think his assessment is $20, 40 or $60,000 too high while there are properties that are underassessed by hundreds of thousands.
If the municipality undertook corrective action maybe we wouldn't have to charge stormwater fees, or borrow for street paving, or float bonds for pool upgrades.
Update August 10, 2012 3:45 PM The latest Commission Discussion Agenda is showing "School District Assessment Appeals" has been moved back to the August 27, 2012 meeting.
Hope Posti is first in line with her assessment.
ReplyDeletehttp://www2.county.allegheny.pa.us/RealEstate/GeneralInfo.aspx?ParcelID=0099H00154000000%20%20%20%20&SearchType=2&SearchStreet=arden&SearchNum=291&SearchMuni=926
To be fair, here is her 2013 reassessment
ReplyDeleteElaine
The letter wasn't meant to go after specific homeowners. Hell if my home was underassessed I'd be the last person to complain.
ReplyDeleteThe problem is the assessment process over all. It is supposedly designed to establish "a fair market value" but looking at recent sale numbers it appears there is little correlation between the open market valuation and the county's assessed value.
Just one underassessed home can have a big effect. The difference between Joe's assessed amount and the sale price in taxes to the school district could almost eliminate the need for student parking fees.
So I'm thinking the school district would better serve themselves and us homeowners if they went after the assessment system rather than spending $150 to fight some homeowner that thinks he's overassessed by $20,000 or so.
The two people that will have the most power to "make sure government works for you" will be D Raja and Matt Smith, candidates for the state senate.
ReplyDeleteHas anyone heard anything, any proposals from either on correctIng the flaws in this system?
Maybe they could offer there proposals here. Elaine has a pretty big audience and they wouldn't expend any campaign funds reaching us.
How about it guys?
Tuesday's Commission Discussion Session should be pretty interesting. Kelly Fraasch will be giving her parks and recreation presentation and the Commission will be discussing school district appeals.
ReplyDeleteElaine
Posti's lot is under assessed in addition to her house.
ReplyDeleteYou would think the school board president would be willing to pay her fair share of taxes. But we all know Posti only surrounds herself with those who think like she does.
@4:36
ReplyDeleteThere was a post on this blog earlier regarding Matt Smith backing a proposal put a moratorium on the Allegheny County Reassessments. For some reason, top Republicans in the Senate blocked the proposal from moving forward.
BTW, we can't blame Joe or other home owners for their underassessed home values, this is strictly a construct of the broken reassessment process.
The bigger problem isn't that the $8000 being missed by the bad assessment of Joe's old house, it's that everyone else has to make up that $8000 in the form of higher taxes on their homes.
Let's hope both Raja and Matt stand up and ask for the moratorium.
Yes, that was exactly my point 11:02. It is not about Joe or JoJo's or anyone elses assessment numbers. They didn't establish the number and any one who protested their property being underassessed is either a fool or a saint.
ReplyDeleteIt's the broken assessment process that is the problem. And your last sebtence is spot on in that if the system were more accurate, the district wouldn't be short his $8,000 probably.
I'm thinking if the property values were accurate the district millage wouldn't have to be 27.15 mills. Maybe if enough high-end and commercial properties were fixed at their real numbers the millage could actually be reduced for everybody. The owner of Joe's house wouldn't be increased by $8,000 and the district wouldn't have to fight some owner with a $150 watchdog.
As for Smith, I missed his position. If its true he should be singing it from the rooftops! He might get my vote as taxes are the number one issue for me.
Check out the assessment on the almost 5,340 square foot house on Vee Lynn. They've been underpaying for years.
ReplyDeleteAnd when 31 Longuevue changed hands (within the family) it magically lost 1,000 square feet and the assessment dropped.
It's all who you know.
1:32 that may be true, but the big picture is the broken system,not individual properties. There are hundreds of suspect underassessments, even Prez Posti admits that when she wrote: "One of the reasons discussed by the Board in deciding not to file appeals based on residential sales is that it would involve a very substantial number of appeals, and it is the obligation of the County, not local governments, to correct assessments on such a wide scale basis."
ReplyDeleteNow then one would think a school district as respected and influential as MTL stepped up and demanded this fiasco be fixed the county and state would listen.
But no, it's far easier for the board to tag along with PSBA and PSEA and demand more money from Harrisburg.
That's far easier, doesn't require much thinking and doesn't piss off any bigwigs.
This system could be changed if there were a collective effort by our school boards and politicians.
31 Longuevue - 3,300 sq ft living area on a 12,000 sq ft lot with 3 full baths and 1 half bath assessed at $285,000.
ReplyDeleteYeah, (expletive) right! And I'm the Queen of England!
What is even more astonishing is that nobody is up in arms over this stuff. They'll pay their tax bill, grumble a little bit and then not get involved in the election process. Little lost sheep.
The tax on non-productive personal real estate is an anachronism and must go. For centuries real estate was subject to tax for the simple reason that it was productive; i.e., most people farmed (or logged or mined) and therefore gained wealth from the land. Today the typical Mt. Lebanon "homeowner" owns property that produces crabgrass. The result is that all residential property tax is paid, not out of profits from the land, but from wages or profits from some other endeavor.
ReplyDeleteThe inequities of this system are staggering. For example, one of the paid executives at St. Clair Hospital (a 501(c)(3) organization) was paid $499,570 in 2009 (not counting bonuses, retirement, and non-taxable benefits - if you count those things his income was over $800,000). This is public
information available from Guidestar.org and the hospital's IRS Form 990. This fellow's Mt. Lebanon home had a 2012 full market value of $363,400, and a 2012 assessment of $348,400. (His 2013 court ordered reassessed full
market value is $319,500.) His total County, Municipal, and School District real estate taxes are estimated to be $13,060 - with discounts. Assuming that he is still making the same base salary as he did in 2009 the real estate taxes on his Mt. Lebanon home represent 2.61% of his basic income. If he is getting the same compensation package this year as he did in 2009 then the tax represents 1.6% of that package. Down the street from me lives a widow whose house is taxed on a 2012 assessment of $240,500. I estimate her taxes to be $9,015. Her yearly income is estimated at about $40,000. Her property tax takes 22.5% of her income.
I do not begrudge the "rich" fellow his home or his income. On the other hand, the widow's house grew increasingly valuable with the years, especially after her husband died. She is in good health and does not wish to leave her home. But in neither case do the houses "pay" the owners. And the taxes charged against these homes have no correlating relationship to the owners' incomes.
Although I am willing to admit that property taxes on commercial property have some validity, the tax on personal real estate is opprobrious. I would much rather see a consumption tax, or even an income tax (which would actually be better for Mt. Lebanon residential property owners at the lower end of the economic scale) - although I am somewhat uncomfortable about that one. In any even, local revenue for the Municipality and District would be based on actual production, and not some bureaucrat's guesswork.
12:00pm
ReplyDeleteCheck out H.B. 1776.
Thanks 5:40 Smith's stock just went up a few points in my book.
ReplyDeleteHope he keeps pressing for it's passage.
Mr. Gideon is spot on in his assumations. Everyone on this blog should get on board, read H.B. 1776 and put our heads together and figure out a way to improve the bill so we can get rid of the assessment judges. Granted, assessments on commercial/rental property is the only way to derive tax collections for local governments who provide the infrastructure these businesses gain value from but their property does create a source of income. Income tax, not personal income tax, is probably the only way to create an equitable system because user/consumption taxes hit the less fortunate harder. Every time we turn around the government taxes fuel. Hell, the "Johnstown Tax" is still added to your gasoline purchase. How many times are we, the taxpayers, going to be required to rebuild Johnstown from the great flood? Luxury taxes do not work because the rich will still spend the same amount regardless and that amount is limited at best in this town and state. Taxing property is WRONG. Let's do something about it. Support those representatives who wanted to send H.B. 1776 to the floor for debate and get rid of those in the next election who did not vote in favor of that motion. It is time to lighten up government and give the people a voice. God bless America!!
ReplyDeleteAt first look HB 1776 looks great.
ReplyDeleteBut I have a couple of questions, one of which I'm not crazy about asking as it gives fuel to the opponents.
If SD property taxes are eliminated how is the money from sales tax etc divided between the 352 school districts throughout the state? Does Mt. Lebanon get the same amount as say Sto-Rox or Duquesne? Does that mean if we decide we want a college level calculus class we might not get because the state determines not to send us enough to run it? Does 1776 take away our management of our school district? (not that that horse hasn't already left the barn!)
The other question what does the bill do to control school district's rapidly escalating expenditures? Sure initially the raise the sales tax 1%. but what about the next year? And the year after?
May it lull taxpayers into a new found complacency? An 8% tax on a can of soup or loaf of bread isbeasy to tax. Even 9%, 10% won't cause a panic.
At least when you get your SD tax bill now, there's that "holy crap" moment for those of us that see it.
About 20 years ago I was asking alot of questions of the school district at school board meetings. We know they don't like that. My spouse asked me to stop because he thought the district would file an appeal to have our house reassessed and our tax would go up if they did. I called the muncipality and asked if this could happen. I was told no because the school district and the municipality have an agreement that the muncipality would file appeals on home owners (if needed) and the school district would file appeals on businesses (if/when needed). I never gave this a second thought until now. Is the school district now able to file appeals on homeowner assessments?
ReplyDeleteBoth the commissioners and the school directors should be involved in getting this latest assessment fiasco stopped and the system fixed. They are losing out on hundreds of thousands of dollars in tax revenue due to the inaccuracies. But the school district finds it much more expedient to spend thousands fighting homeowners appeals $150 at a time rather than launching a lawsuit. Why not? An individual launched one that forced this latest reassessment, is the school less powerful?
ReplyDeleteWhy isn't the board's PASB liaison lobbying that organization to get board's united on HB 1776 for instance rather than continually bash the governor for trying to hold the line on taxes? I thought board member's represented us not the administrators and teachers union!
Does this make any sense whatsoever?
ReplyDeletePresident Posti writes:
"One of the reasons discussed by the Board in deciding not to file appeals based on residential sales is that it would involve a very substantial number of appeals, and it is the obligation of the County, not local governments, to correct assessments on such a wide scale basis."
But it is the obligation of the school board to pay someone $150/appeal to make sure the homeowner isn't getting away with something.
So let's take a look. A homeowner appeals his $250,000 assessment. He's arguing his home is only worth $225,000. So here's the math.
$250,000 x 27.13 mills = $6,782.50 in SD taxes.
If he wins his appeal --
$225,000 x 27.13 mills = $6,104.25. a reduction of $678.25 in the SD tax. Which is further reduced because the board choose to send an observer at a cost of $150.
So in 2012 if the homeowner wins his appeal the district at most loses $523.25.
But the board feels no obligation to appeal this homeowners assessment!
Assessed 2012 value: $187,000.
Actual 2012 sold amount: $550,000. So again the math.
$550,000 x 27.13 mills = $14,921.50
$187,000 x 27.13 mills = $5,073.31
A difference in tax revenue to the district of a whopping $9,847.69!
So the brilliant minds on the board will spend $150 to "protect" $678.25 in revenue, but don't think they have any obligation to make sure they collect the $9,847.69 in taxes due on the "fair market value" of the $550,000 home!
Truly incredible isn't it?
$678 vs $9,800. I know which revenue I'd pursue.