A nonprofit that helps unemployed people stay in their homes wants a court to invalidate state property reassessment laws because the laws lead to unfair taxation.
The Pittsburgh-based Mon Valley Unemployed Committee Inc. sued the state Friday in Commonwealth Court.
The group contends the reassessment laws violate the state constitution because they don't require counties to reassess regularly.
The present system "produces inequities, especially for low-income homeowners," said attorney Marielle Macher, executive director of the nonprofit Community Justice Project, which represents Mon Valley.
"Properties tend to appreciate (increase in value) quickly in higher-income neighborhoods than in lower income neighborhoods," Macher said. "That results in property taxes disproportionately high for low-income homeowners, and that regressive assessment structure just gets worse and worse over time. And so it's really important that Pennsylvania modernize its tax system so that it's fair, equitable and based on reality."
School districts, cities, boroughs, townships and counties use assessed property values to set tax rates to collect tax revenues. The revenues pay for police and fire protection, road and bridge maintenance, trash collection, social services and a wide variety of other goods and services.
Mon Valley asked the court to rule major parts of the reassessment laws unconstitutional, require the state to direct its 67 counties to assess property under the parts that remain constitutional and grant other, unspecified relief.
Efforts to reach a spokesperson for the state were not immediately successful.
Unclear how area reassessments could be affected
Lackawanna, Lycoming, Northumberland and Schuylkill are among the counties in northeast and northcentral Pennsylvania in the midst of reassessments. Other counties, like Wayne, recently completed reassessments.
It's unclear how the lawsuit might affect their reassessments, if at all.
Wayne’s new assessment figures went into effect in 2023. Lackawanna and Schuylkill’s reassessments are complete and are scheduled to go into effect in 2026 after appeals are complete. Lycoming’s and Northumberland’s reassessments are underway with new assessed values scheduled to go into effect in 2028.
Through settlements of earlier suits, the Community Justice Project forced reassessments in Allegheny, Lackawanna and Schuylkill counties and has a suit pending against Northumberland County.
"I think the bottom line is just that ... even if we win, we don't know when the county will reassess again," Macher said. "So it puts us into this position of needing to go county by county (over and over) ... So that's just not viable. There needs to be a statewide solution here."
The suit points out that state law leaves carrying out a reassessment solely up to counties, which set a base year for taxable property assessed values.
Typically, a base year is the year after a reassessment is completed. The base year values remain the same year after year unless successfully challenged by individual property owners.
The project says never changing values leads to unfairness because the values of properties regularly change.
Over time, the project argues, market values grow larger than base year values, meaning many wealthier property owners pay less in taxes than they might.
“In other words, under the base year scheme, properties’ assessed values are based on their value in some past year chosen by the county rather than on their current market value,” the lawsuit says.
This happens because the state lets counties decide when to reassess “based on any factors that they choose,” the suit says.
The state’s two assessment laws “contain no meaningful standards guiding or restraining how counties should implement the base year scheme, leaving it to each individual county to decide whether, how often and how to conduct property reassessments to update the base year,” the suit says.
Pa. does not require periodic reassessment
Pennsylvania is the only state that does not require periodic reassessment, the suit says.
History shows county officials are often reluctant to reassess because reassessed values can upset taxpayers, the suit says.
About 50 counties have base years at least 15 years old. Lackawanna’s current base year is 1968.
Leaving reassessments entirely up to counties “unconstitutionally” delegates to them the state General Assembly’s power to pass bills that set reassessment standards, according to the suit.
The failure to reassess regularly also leads to non-uniform taxation that creates an “unlawful property tax exemption” in violation of state constitutional provisions that govern exemptions.
