PSBA position on SB 586: Oppose

SB 586: Greatly restricts the rights of school districts and municipalities to conduct appeals of under-assessed property

On behalf of the 4,500 elected officials who govern the commonwealth’s public school districts, we request your opposition to Senate Bill 586, sponsored by Senator David Argall. This legislation would greatly restrict the rights of school districts and municipalities to conduct appeals of under-assessed property.

By limiting the right to initiate appeals, particularly with large commercial properties, school districts in your district could experience losses in revenue that will be very significant. This restriction in the ability to generate future local revenues will harm schools that are already grappling with overall declining state aid and unfairly shift the property tax burden to homeowners.  We urge you to contact your districts today and discuss this issue.

Our members are very much aware that all other property owners in a school district have to bear the tax burden of under-assessed properties. Any property that is simply under-assessed for whatever reason inherently shifts the tax burden over to those property owners who are properly assessed in the form of increased millage rates.  Senate Bill 586 would take away the only voice on behalf of other homeowners and businesses being forced to subsidize under-assessed properties – school districts. This legislation will restrict school districts’ rights of uniform review of commercial properties.  Those commercial properties that are undervalued will not be billed for their fair share of school property taxes.

Issues with property assessment appeals by taxing bodies are merely a symptom of the state’s broken assessment laws. Pennsylvania’s property assessment system needs comprehensive reform. Because counties throughout Pennsylvania are not required to perform a regular reassessment, it could be decades before taxing bodies have any opportunity to realize additional revenues from ongoing redevelopment efforts and/or growth.  Without a reliable system for accurate reassessment of real estate throughout the commonwealth, Senate Bill 586 would leave many school districts without the ability to level the assessment system out with the only tool they have. The proper approach is to fix the current system that makes these appeals necessary in the first place. This is why we call for mandatory reassessment and are glad to see that a joint group of legislators are working toward this goal.

Summary:

Senate Bill 586 (Argall): Removes a taxing jurisdiction’s ability to appeal the assessment of a property based on the sale of the property, financing or refinancing of a property, or investments in the property. Under Senate Bill 586 taxing authorities may only appeal an assessment when the property has gone through a countywide reassessment, been divided into smaller parcels, or a change in the productive use of the property has occurred.