A game of gotcha

Even if ruled legal, spot assessments are unfair

In a recent ruling, Allegheny County Judge Robert J. Colville gave his approval to what is derided as the “newcomer’s tax,” the practice some municipal governments have adopted of challenging the assessments of homes when their sales prices and assessed values seem out of kilter. Judge Colville concluded that these selective assessment challenges are legal and, by ensuring new home buyers pay their fair share, make the real estate tax system more equitable for everyone.

Fairness and equitability indeed are integral to the property tax system. However, municipal governments are happy to ignore the salient point that those qualities are best achieved through regular reassessments of all residential and commercial properties in a county, not through spot challenges to a handful of them. Municipalities and school districts should have just two options — live with the revenue from existing assessments or pressure the county to reassess everyone’s property on a regular basis.

Periodic reassessments would cost large sums of money and prompt a public backlash. (Who can forget the tragicomic aspects of the last countywide reassessment, in 2012?) So some municipalities and school districts cherry-pick and play a game of gotcha. But the home buyers hurt by these guerrilla attacks aren’t in any way responsible for the assessments that were on the properties when they changed hands.

Sales price and assessed value need not mirror each other anyway; what if a buyer simply paid too much? Spot assessment challenges catch home buyers by surprise and make the municipalities and school districts behind the tax grabs look predatory. At worst, they make affordable properties instantly unaffordable. People buy houses believing they will pay so much in taxes, only to end up with sticker shock when the government comes after them for more.

Joseph Nissim Martel and Ester Martel filed suit last year after the Pittsburgh Public Schools challenged the assessment on their Squirrel Hill home. The challenge increased their assessment to $690,000 from $464,700. One wonders how the assessment could have been so out of whack, given the last countywide assessment was only six years ago. Perhaps spiraling property values in some parts of the region have something to do with it, and if so, that’s more reason to have a countywide reassessment. Ideally, every parcel statewide would be on a schedule for reassessment.

Ironically, the city schools are in the midst of a marketing campaign to raise their profile. They should be doing all they can to enroll more children, not alienate families through bad tax policy. Neither the city of Pittsburgh nor Allegheny County does spot assessment challenges.

After Judge Colville ruled against them, the Martels quickly appealed to Commonwealth Court. Among other claims, the Martels argued that spot assessments violate the state constitution’s uniformity protections. Judge Colville disagreed and noted that because buyers can appeal assessments on new properties, municipal governments must be allowed to as well.

But that also misses a salient point. A countywide assessment allows the government to challenge everyone’s values. Home owners can challenge only their own. Why should either party have more than one path to reassessment? So much for fairness.

Even if appellate courts rule the newcomer’s tax to be legal, it still won’t be right.