Justices to decide case that will affect all homeowners
State Supreme Court justices indicated Wednesday they plan to tread carefully as they decide a case that could cost cash-strapped counties millions of dollars and pile loads of stress onto homeowners from urban centers to rural hamlets.
At issue is whether the base-year assessment system -- in which property values are based on what the property was worth in a previous year, rather than its current value -- violates the state Constitution's requirement that people be taxed uniformly.
"This will affect every county in the state," said Chief Justice Ronald Castille. The case stems from Allegheny County Senior Common Pleas Judge R. Stanton Wettick's 2007 ruling that the base-year system violates the Constitution.
Even the system's defenders acknowledge that property taxes become less fair the longer a county waits between reassessments. Homeowners in booming neighborhoods end up shouldering a smaller piece of the tax burden than they should while homeowners in declining neighborhoods don't get deserved tax breaks.
But the ideal alternative -- perfect home values -- is impossible to achieve, Allegheny County solicitor Mike Wojcik said.
During arguments before seven justices in the City-County building, Downtown, Wojcik reminded them about the county's last two reassessments, in 2001 and 2002, when the county spent $30 million and still fielded 180,000 appeals. County Chief Executive Dan Onorato was elected in part because of voter anger over those tumultuous reassessments.
"We had a government go through two reassessments and saw, I don't think it's unfair to say, chaos ensue," Wojcik said.
Tough as reassessments might be, it's the county's job to perform them, said Ira Weiss, one of two lawyers challenging the base-year system Onorato implemented in 2006. Weiss likened Wojcik's argument to a calculus student who doesn't want to take a test.
"Their argument is 'we can't do it,' 'it's too hard,' or 'it costs too much,'" Weiss said. "They just don't want to deal with it."
Appealing to some of the judges' personal pasts, Weiss said the base-year system is akin to a lawyer leaving a $300,000-a-year job in 2002 -- Allegheny County's base year -- to join the lower-paying Commonwealth Court, but still paying income tax on that $300,000.
Some justices, though, warned of what would happen if they ruled the way Weiss wants.
Thousands of senior citizens who decades ago bought homes worth, say, $30,000 suddenly could be taxed on values that might have climbed to $250,000, said Justice Seamus McCaffery.
"We need to be sensitive to these issues," McCaffery said.
Even the smallest of the state's 67 counties would need to spend millions of dollars to perform a reassessment, said Doug Hill, executive director of the County Commissioners Association of Pennsylvania. The association filed a brief with the Supreme Court in support of Allegheny County.
Small counties might need to raise property tax rates several mills just to pay for a reassessment, Hill said.
County officials should be trusted to decide when they need to reassess, although the 1982 base-year law doesn't say a reassessment ever has to happen, Wojcik said.
"This is an art more than a science," Wojcik said. "You're never going to be exact."
The court did not say when it would rule. If the court decided by Oct. 31 that the base-year system is unconstitutional, Allegheny County would have to finish a countywide reassessment by the end of the year for use in 2009, according to Wettick's order.