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Judge rules against Shade-Central City School District in coal tax case

| Friday, April 25, 2014, 9:48 a.m.

A judge has ruled against a southwestern Pennsylvania school district that wants higher taxes levied on property used for coal mining.

The Shade-Central City School District was in court to try to get the Somerset County assessment appeals board to adopt a new methodology for valuing coal. The district is arguing in its 2011 tax assessment appeal that the county has under-assessed parcels owned by coal companies in Shade Township.

Common Pleas Judge Gregory Geary barred the district Wednesday from presenting testimony from a company hired to appraise active coal mines within its jurisdiction, The Daily American reported.

The county argued that the state constitution requires that a taxing authority apply the same methodology for valuing real property to all property within its jurisdiction.

“Shade Township's position would mean that the school districts in the county would be taxed different than others. We are required to have our tax assessment uniform,” county solicitor Dan Rullo said.

The judge agreed, saying adopting the proposed valuation methodology “would create a constitutionally impermissible non-uniformity of taxation of coal parcels in the county.”

The school district said an active coal mine ought to be treated as a single economic unit, such as a store or fast-food restaurant, with its value based on what the mine would sell for if placed upon the market. Under the established methodology, there are four classes of coal acreage, based on use.

Geary said the proposed methodology would produce a 240 percent increase in assessed value for active coal acreage in one mine he cited as an example. Such changes would unevenly allocate the tax burden among coal parcel owners, he wrote.

“For this reason, we hold here that if the school district wishes to challenge the county's established methodology, than it must do so in an action that applies to all coal parcels in Somerset County,” Geary wrote.

District solicitor Jeffrey Berkey said the board will review its options after he examined the court order in more detail.

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