School districts oppose bill limiting challenges
School district leaders are speaking out against a bill that could limit a school district’s ability to challenge a property assessment and, they say, could cost districts millions in much-needed revenue.
The bill is sponsored by state Rep. Warren Kampf, R157th Dist., and is needed, he says, to help improve Pennsylvania’s business climate.
In a memo to other legislators Kampf wrote in February before he introduced the bill, he called the practice “spot assessment” and wrote that “it is one of the most anti-competitive government practices in existence today.”
He said it is currently practiced by only about 10 percent of school districts in Pennsylvania and “there is not a lot of it going on this area.”
Nevertheless, Pottsgrove School District Superintendent William Shirk said in a May 22 letter to district residents that the bill “doesn’t help senior citizens, lowincome families or homeowners. It only helps commercial property owners. Unfortunately, this could come at the expense of our schools.”
Although Pottsgrove has not challenged commercial property assessments, Shirk wrote that “moving forward we want to preserve our right to appeal, because of the potential revenue it could create for the district.”
In fact, Pottsgrove has wrestled with the opposite problem, challenges that reduce revenue and not raise it.
In January, the school board approved a settlement of three years of assessment challenges brought by, among others, the owners of property where a Sanatoga strip mall and the current Landis Supermarket are located.
The settlement required the district to cut a refund check of more than $200,000 and will cost another $70,000 in lost revenue annually going forward.
Similarly, the bill could mean “cuts to programs and higher taxes for homeowners,” Shirk wrote.
“This restriction in the ability to generate future local revenues will harm schools that are already grappling with overall declining state aid and unfairly shift the property tax burden to homeowners,” wrote the Pennsylvania School Boards Association in a May 8 letter to the House Commerce Committee.
“Any property that is simply under-assessed for whatever reason inherently shifts the tax burden over to those property owners who are properly assessed in the form of increased millage rates,” PSBA wrote. “House Bill 1213 would take away the only voice on behalf of other homeowners and businesses being forced to subsidize under-assessed properties – school districts.”
But Kampf argues his bill would protect homeowners as well as business property owners.
Last month, he told Digital First Media, “imagine if your tax bill went up $9,000 overnight, and your neighbor’s did not? Wild fluctuations in property taxes can and do drive people out of their homes.”
However some provisions of the bill — particularly one which would have allowed assessments on commercial property to be based on the value of vacant buildings — have been removed.
“Some concerns came in from citizens about House Bill 1213, and my colleagues and I are listening,” Kampf told Digital First Media.
One of those citizens was Phoenixville School District Superintendent Alan Fegley.
He noted that when the economic crisis hit and the real estate market crashed in 2007, “everyone was challenging their assessment to lower their taxes and since then, as the economy has recovered, school districts are challenging assessments to try to recover what they lost.”
Fegley said he spoke to Kampf’s office about his concerns and said he believes a better approach would be to pass a bill that requires counties to undertaken a county-wide property re-assessment on a regular schedule.
“Whether its every five years, or every 10 years, or you do some sections of the county one year, and another the next, that would eliminate the need for Representative Kampf’s bill because property would regularly be re-assessed,” said Fegley. PSBA agrees. “Issues with property assessment appeals by taxing bodies are merely a symptom of the state’s broken assessment laws. Pennsylvania’s property assessment system needs comprehensive reform,” wrote PSBA. “Because counties throughout Pennsylvania are not required to perform a regular reassessment, it could be decades before taxing bodies have any opportunity to realize additional revenues from ongoing redevelopment efforts and/or growth.”
PSBA concluded that “the proper approach is to fix the current system that makes these appeals necessary in the first place.”
But Kampf said that is a much more difficult bill to pass.
“We should not a desire for the perfect stand in the way of the good,” said Kampf. Noting that Pennsylvania is “one of only two states that I know of that doesn’t require regular reassessments,” the fact that it hasn’t happened yet is no reason not to pass his bill.
Kampf’s bill acknowledges the preference of county-wide re-assessments.
In fact provisions in Kampf’s bill in its current form, prevent an assessment appeal by a school district or municipality based on a recent purchase, re-financing or safety improvements. However, an assessment appeal could be mounted after a county-wide assessment, according to the bill’s text.
Kampf said there is a companion bill to his in the state Senate, and that he believes there is a reasonably good chance the bill could pass this year.
State Rep. Tom Quigley, R-146th Dist., state Rep. Marcy Toepel, R-147th Dist. and state Rep. Tim Hennessey, R-26th Dist. did not return email requests asking for their position on Kampf’s bill.
“This restriction in the ability to generate future local revenues will harm schools that are already grappling with overall declining state aid and unfairly shift the property tax burden to homeowners.” Pennsylvania School Boards Association “Wild fluctuations in property taxes can and do drive people out of their homes.” State Rep. Warren Kampf, R-157th Dist.