Allegheny County Tax Assessment Chaos
A look at the problems and solutions associated with the way Allegheny County has handled tax assessments
With Allegheny County tax assessments coming up soon -- and residents still reeling from the last tax assessment -- our team at Flaherty Fardo has the solutions our communities need.
The Problems with Past Tax Assessments
The Pittsburgh Post-Gazette recently questioned the fairness of the 2012 Allegheny County property tax assessment. The Post-Gazette review found that in Pittsburgh, expensive property values were underestimated when compared to lower-priced properties. Essentially, more expensive properties were receiving a tax break. This proves troubling. One of the primary justifications for the tax assessment was that lower-income properties were paying more than their fair share already. So how could this have happened? The answer is two-fold.
One problem is the mass appraisal system.
Mass appraising is not a perfect science. Often, results fall in a terrible sweet spot where they can meet industry standards while still being unfair to lower-income areas and residents.
The results of the 2012 Allegheny County tax assessment are not unusual. National appraisal systems tend to produce similar results -- favoring more expensive properties. This is because mass appraising software typically hunts for the mean value. By cutting the difference between both higher and lower-priced properties in a given area lower-income values are raised while higher-income values are lowered.
Another problem is the use of outside contracting. The county’s decision to hire non-residents to complete the tax assessment compounds the flaws of mass appraisal software.
Allegheny County paid a contractor, Tyler Technologies -- a Dallas-based company -- to complete the 2012 tax assessment. The cost: an estimated 11 million dollars -- with actual costs possibly reaching even higher. What more, in 2001, Allegheny County paid Sabre Systems, Inc. -- a Houston-based company -- an estimated 30 million dollars for a similar service.
All this money leaving the Allegheny economy for services that have proven flawed and ineffective.
The Solutions for Future Tax Assessments
Every time there is a tax assessment in Allegheny County, there are problems. With another assessment scheduled for 2015, it is time that Allegheny County provides solutions. We have those solutions.
Once they’re said aloud, the solutions seem simple!
The solutions are simple:
- Start soon
- Keep it local
Do not wait until the last minute.
If we are going to reassess every 3 years, we should start the next tax assessment right on the heels of the last. One of the major flaws with each of the tax assessments was that there was never adequate time to correct inequity. Instead, the solution was always to fix the problems through an appeals process. This process, however, cannot fix the appraisal software. We need more time and a thorough review for that. Prior to releasing any tax assessment results, audits need to be made so the information in released correctly the first time. The goal is to make tax assessments accurate. That can only be accomplished by having enough time to perform multiple quality checks before the results are published.
Keep the money in Allegheny.
Instead of outsourcing millions of dollars, Allegheny County should keep its tax assessments local. Not only does it benefit the local economy, but it would produce more accurate results. Allegheny County real estate market is too diverse to rely on mass appraisal software.
Instead, the county needs to hire more assessors, appraisers and real estate agents at the local level. Critics may argue that it wouldn’t be cost effective to have a tax assessment division with local experts. We disagree. It would be less costly to employ a full time tax assessment division than it would be to incur a major capital expenditure every 3 years. This could only be done, however, if we allowed sufficient time to complete the next reassessment.
Allegheny County needs a better tax assessment plan for the future. Our elected officials should not subject residents to problems like those seen in 2012. We need a solution. We need our taxpayer money spent locally. We need tax assessment results that are fair across the board. We can have both of these with an in-house reassessment division that doesn’t rely on software that can’t understand our communities.
Have questions about Allegheny County property tax assessments? Contact us at Flaherty & Fardo for a free consultation and let our team of experts help.