Tax assessment appeals can benefit school districts in Valley
Taxpayers taking the road to assessment appeals might be surprised to find school districts traveling with them.
It has become fairly routine for business and residential real estate owners to appeal their assessments in order to save on taxes.
But school districts dealing with reduced state aid and growing expenses such as pensions also are looking to assessment appeals on properties that aren't yielding their fair share of tax dollars.
That's particularly true in Allegheny County, where tax assessments have been a sore subject for decades. Yet, during a time of increasing financial pressures, in at least two of the Alle-Kiski Valley's four counties, appeals by school districts haven't happened for years — or not at all.
“I have had no school district, in my 27 years of being here, file an assessment appeal,” said Christopher Savage, Butler County's director of assessments.
Mike Renosky, Armstrong County's assessments director, said he can remember only one time when a school district filed an appeal.
That was in the late 1990s when the state took away the non-taxable status of power plants owned by electric companies.
“We basically put them to taxable status, and the Armstrong School District filed on those two plants,” Renosky said. “Other than that, no school district has never filed an appeal on a commercial, industrial or residential property.”
William Ferraro, Westmoreland County assessments director, said some of the county's 19 school districts have filed appeals.
He said only Greensburg-Salem and Norwin do it on a consistent basis.
Unlike Allegheny County, where tax assessment appeals occur after tax bills are issued, appeals in Westmoreland must be filed by Sept. 1 of the year before the next year's taxes come due.
“For the 2014 tax year, there were probably about 25 filed,” Ferraro said.
He said the majority of the school district appeals focus on commercial properties.
“I just don't know that it would be worth it to appeal a residential value if you are looking at a difference of $2,000 or $3,000,” Ferraro said. “I just don't think most of these appeals are dealing with small numbers.”
The success of school district appeals in Allegheny County could make school district officials in the Valley's other three counties take notice.
Fox Chapel Area is one example.
“It's definitely significant,” Business Manager Doug McCausland said. “Looking at the past two years, it appears that we are generating approximately $175,000 to $200,000 in additional revenue to the district on district-initiated appeals.”
He said the benchmark, or trigger, for an assessment appeal is a differential of at least 15 percent between the assessed value and a recent sale price or the current assessed value, plus any building permits issued.
He said the school board uses that figure as policy.
Highlands School District's policy calls for appealing an assessment when the sale price of a property is 25 percent or greater than the assessed value.
“We had a policy before where we didn't fight any residential assessment,” Business Manager Jon Rupert said. “Our policy was to tell the county: ‘This is your job to do.' We don't like going out after our residents; that's the assessment department's job.”
The district adopted its policy when Ira Weiss became the school board's solicitor about 2006. Weiss said his law firm primarily represents school districts and municipalities and specializes in tax assessments and issues.
He said the firm reviews market values every year in relation to the corresponding assessment.
“We do a lot of these, and the 25 percent, we believe, is a reasonable benchmark,” Weiss said. “If a property is assessed at $100,000 and it sells for $125,000 or more, that's an indication that the assessment didn't accurately reflect the market value.”
Rupert said Highlands averages about 10 residential appeals a year, bringing in about $25,000 in additional revenue.
“It brings in more than it costs,” Weiss said. “If it didn't, we wouldn't do it.”
Peggy Gillespie, Kiski Area's business manager, said her district does not have a policy on assessment appeals. She said the district files appeals, but usually on commercial properties.
She said four appeals were filed last year, all on commercial properties.
“For us, we don't usually have a wide difference on residential,” she said.
Having worked in several school districts, Gillespie said the approach to assessment appeals varies with each one.
“At Woodland Hills, it was really successful,” Gillespie said. “I started the program in Greensburg-Salem. And at Hempfield, they wanted no part of it.
“It's a great program,” she said. “You've got to do something to manage your tax base.”
Janet Burkardt, a lawyer in Weiss' firm who specializes in tax appeals, agrees that commercial appeals are where the money is, and they tend to be easier.
During the past three years, she said, Highlands has filed 31 residential appeals, but she did not have a figure available on how much those yielded.
For 2014, she said, 24 assessments are being filed, with one involving a commercial property.
Burkardt said the difference between the assessed values and the sale prices is $1.4 million to $1.5 million.
“We don't ask for 100 percent,” Burkardt said. “We might go in and ask for 80 or 85 percent of that sale price and, generally speaking, you get it — unless the homeowner comes in and says there were special circumstances that make the sale price higher than the assessment.”
Deer Lakes in Allegheny County is working to establish a policy, including a trigger amount, on filing appeals, according to Business Manager Dennis Thimons.
Thimons, who has been on the job for about a year, said the district has appealed assessments in the past but not consistently.
“You hate to be chasing people who don't have it, but school districts have it tough right now,” Thimons said. “To ignore it and go just by what the county assessment is just isn't good enough anymore.”
“We're the big ticket — we're where most of the taxes are paid,” he said, “so I think the returns can be higher.”
Nelda Burd, president of the South Butler County School Board, said she doesn't know why the district has not set a policy on appealing assessments or filed any. She plans to bring the issue before the board.
“It's something we've been remiss on,” she said. “We should look at that data.”
As for taxpayers being surprised when a district files an appeal, Weiss said, “Sometimes they are, not always. It's pretty common throughout the school districts.
“It's a way to make sure that everyone is paying their fair share.”
Tom Yerace is a staff writer for Trib Total Media. He can be reached at 724-226-4675or firstname.lastname@example.org.