Wagner audit cites inadequate county reviews of tax-exempt properties
Allegheny County's Office of Property Assessments improperly grants tax breaks and is such a sloppy record-keeper that some files containing data about reductions are missing or contain errors, the county controller charged on Thursday.
Controller Chelsa Wagner's 25-page report on the embattled Office of Property Assessments, commonly referred to as OPA, recommends tighter controls on eligibility for tax breaks. County Executive Rich Fitzgerald ordered staffing and other changes to the office last month.
“If record-keeping is not happening or exemptions are not justified, it undermines the fairness for everyone,” Wagner said. “For all the emphasis and talk about how we promote fairness and equity in the reassessment system, this flies in the face of that.”
Wagner's report occurs as county leaders scrutinize property tax exemptions for nonprofits.
The report focused on the county's 347,493 tax-exempt and tax-reduced properties and the process by which those breaks are granted. It found that 21 of 141 files initially requested by the controller for sampling purposes could not be located by the assessment office.
Of the 358 properties ultimately reviewed, 51 — or 14 percent — got a tax break they shouldn't have in 2011, costing the county $16,280 in revenue.
The county's homestead exclusion program, which grants homeowners a tax reduction on their primary residence, generated the highest rate of improper reductions. The controller examined 181 properties receiving the homestead exclusion and found the exemption was incorrectly applied to 46, a 25 percent error rate.
A vacant lot in Munhall owned by the nonprofit Junior Achievement of Western Pennsylvania was the only sample property the controller said improperly received a full exemption, which cost the county $2,119.
Junior Achievement President Dennis Gilfoyle said the lot was a gift to the group in 2005. The county denied annual requests for an exemption, and the group paid taxes on the lot through 2010. In 2011, Gilfoyle noticed the county's website stated that the property was exempt.
In August, the organization received a tax bill, and the county said the exemption was an error.
“We haven't paid the county or the school district until we get this problem resolved,” Gilfoyle said.
Fitzgerald has said he is in discussions to obtain voluntary contributions from nonprofits that don't pay property taxes, and he ordered a review of each tax-exempt property in the county to determine if its exemption is warranted.
County Council conducted a hearing last month to gather public input about UPMC's many tax-exempt properties.
Wagner recommended a parcel-by-parcel review and wants to require organizations seeking tax-exempt status to submit an affidavit showing they meet state requirements for charitable exemptions. She wants to post the affidavit online.
Fitzgerald's review would enforce a 2007 county ordinance that requires officials to review each tax-exempt parcel at least once every three years to ensure it is used for solely charitable purposes.
Fitzgerald's spokeswoman, Amie Downs, said he declined to comment on Wagner's report. The two have tangled repeatedly during the past year.
The Office of Property Assessments has been at the center of the county's controversial court-ordered property reassessment.
In September, Wagner blasted the county's $9.3 million contract with Dallas-based Tyler Technologies, which conducted the reassessment. Fitzgerald fired Assessments Manager Michael J. Suley in November. Tim Johnson, former director of Administrative Services, which oversees OPA, resigned last month.
Bobby Kerlik is a staff writer for Trib Total Media. He can be reached at 412-320-7886 or firstname.lastname@example.org.