What can you expect during reassessment?
Many, and perhaps most, of the people who own real estate in Indiana County today were not land owners when the last countywide property reassessment was conducted in 1968.
So it’s not surprising current land owners have many questions about the property reassessment set to begin next week:
What is a reassessment?
Why is one needed?
Will it cause my real estate taxes to go up?
What will the reassessment people do when they come to my house?
Is reassessment another way for the county to get money?
What can I do if I don’t agree with the new appraisal value of my property?
To help answer those questions and many others, the county commissioners and representatives of Evaluator Services and Technology Inc., the company hired by the county to conduct the reassessment, will host a public information meeting at 7 p.m. Aug. 20 at the Kovalchick Athletic and Convention Center in White Township.
EST is producing a video, approximately 17 minutes long, that will be shown at the meeting to give an overview of the reassessment process.
“Representatives of EST will be present to provide additional information and answer questions,” said Tim Barr, EST’s vice president.
The video will also be available on the county’s website after the meeting.
There are about 48,000 real estate parcels in Indiana County and roughly 46,000 are taxable.
“All properties will be reappraised and brought to present value” as part of the reassessment, Barr said.
School districts, municipal governments, the court system, human services, libraries and parks all rely on the real estate tax as their primary source of revenue. The tax is collected from property owners based on the assessed value of their real estate holdings.
In Pennsylvania it is the responsibility of the county boards of assessment to establish the fair market value — the probable typical selling price for each parcel of real estate in the county — at the time of assessment.
According to EST, to achieve a fair tax base, two primary objectives must be met: First, the tax base market values at the time of the reassessment should be 100 percent of the true market value, and secondly, there must be uniformity in the assessed value of all properties of like characteristics and like market values.
Since the last reassessment in 1968, real estate market values have increased faster in some parts of the county than in others. As property values change over time, distribution of the tax burden becomes increasingly disproportionate, with some taxpayers paying more than their fair share and some paying less than their fair share.
The commissioners in 2010 retained the Ira Weiss law firm of Pittsburgh to evaluate the county’s real estate taxing system. The quality and fairness of the county’s tax base was evaluated by comparing the assessed real estate values to recent real estate sales information compiled by the state.
A report from the Ira Weiss study concluded the county’s property tax assessment structure is seriously flawed and is ripe for a lawsuit challenging its base year system that has not been updated in 45 years.
Janet Burkardt, the managing attorney of the law firm, told the commissioners last year the county’s system likely would not withstand a legal challenge and does not impose taxation in a constitutionally uniform manner.
Barr said property reassessments typically result in higher taxes for about one-third of property owners; lower taxes for about one-third; and for the remaining one-third taxes will likely remain the same. But the reassessment will not generate more revenue for the county.
“The values are all going to be higher (after the reassessment). We’re talking about 45 years (since values were last established),” Barr said. “The taxes after the reassessment may be higher, or lower, or stay the same. So the values are higher — in fact, the average is six times higher (according to state statistics given as an estimate) — but the millage will be approximately six times lower, so the revenue the county collects stays the same.
“If we say the average increase in value across the county is six times, it’s not the same everywhere,” Barr continued. “The values in White Township have gone up at a different rate than the values in some of the remote boroughs and some of the rural areas. And it’s that change over time that causes the lack of uniformity.
“Different types of property will go up at a different rate,” Barr said. “So, location being different, and property types being different are going to cause that variation. That’s why some people will pay more and some people will pay less.
“But the key point is … the overall process is revenue-neutral,” Barr emphasized. “So, for every $100 someone pays more, there’s someone else who’s going to pay less, or maybe two people are going to pay $50 less. … All taxing districts are required to lower their tax millage by a ratio equal to the ratio of the tax base increase. This process is called equalizing the millage. … Because reassessment is revenue-neutral, it can’t be used as a means of generating more tax revenue.”
Barr also said changes on the property — such as new construction or additions — may also affect property values, but changes in market values will most influence the reassessment.
Barr also said the hiring of data collectors — the people who will visit every parcel of real estate in the county — has been completed for now, but a few more may be hired later. Those temporary workers have passed background checks and their training in state-certified courses will begin this week.
The day after the presentation at the KCAC, data collectors will start doing field work in groups with their supervisors before going out in the field on their own.
An important distinction, the reassessment team members emphasized, is that the data collectors are not appraisers. They are only collecting information. The appraisal process will come later.
“Data collectors don’t go inside,” Burkardt, the Ira Weiss attorney, said. Any questions they have they will ask at the door. The property owner will receive a home interior survey to be returned by mail or submitted online. If the property owner is not home when the data collector visits, the interior survey and a pamphlet on the reassessment will be left on the door.
The data collectors will verify the number of stories, age and dimensions of all buildings on the parcel and take exterior photos of buildings for later use by certified appraisers using national standards.
A typical visit from a data collector should take about 15 minutes, according to Barr.
Appointments with property owners will not be made but EST will announce in advance which areas of the county the data collectors will be working in.
After the field data has been collected and verified, the information will be computerized and real estate market studies will be conducted to develop formulas for estimating fair market values.
Then a determination of final estimates will be made and a notice of change of assessment will be mailed to taxpayers.
Property owners will see on their change of assessment notice an estimated tax impact. For example, Barr said, the form may indicate the former value of a property was $20,000 and the estimated new value is $120,000 (six times higher than at the time of the last assessment), and the form will estimate what the taxes are at $20,000 times the current millage rate and a forecast of what it will be in 2016 when the reassessment goes into effect.
The form will also include a potential Clean and Green tax impact for parcels that are 10 acres or larger and devoted to agriculture or forest land use. The Clean and Green program allows those eligible parcels to be assessed at a value based on their use rather than fair market value, and will provide tax relief to encourage property owners to maintain their land in agriculture or forest land use.
Frank Sisko, Indiana County’s chief assessor, estimated there are between 8,000 and 10,000 parcels in the county that could qualify under Clean and Green. Barr said that typically in a countywide reassessment, two-thirds to three-quarters of eligible properties are enrolled in Clean and Green programs.
Clean and Green will be an important part of the reassessment, according to Barr, because large tracts of farmland and forest land have appreciated greatly over the past 45 years and Clean and Green will help keep taxes on those parcels closer to where they are now.
Property owners who disagree with the change to their property assessment may ask to meet face-to-face with a representative of the reassessment team for an informal review. Property owners at that time can present evidence of market value to support their argument.
If an adjustment is not made and the property owner is still not satisfied with the new fair market value, the taxpayer can request a formal hearing before the county’s board of appeals.