Rendell vetoes bans on real-estate tax appeals

From the Inquirer

Rendell vetoes bans on real-estate tax appeals

By Anthony R. Wood Posted on Tue, Jul. 15, 2008

Inquirer Staff Writer
Two bills that school officials say would have meant tax increases and millions in lost revenue in their districts were vetoed yesterday by Gov. Rendell.

Rendell said in his veto message that he wanted to see a major change in state law that would force counties to reassess real estate more frequently.

Under current law, counties have to assess all real estate parcels at the same time, and are forbidden from raising values on individual properties except in the cases of new homes or significant renovations.

However, a little-known provision gives school districts - the beneficiaries of most of the property-tax money - and towns the option of appealing individual assessments that they view as too low. The House and Senate bills that Rendell vetoed would have ended that practice.

Some tax experts argue that the practice is unconstitutional because it essentially allows schools and towns the right to engage in selective "spot assessments."

School officials counter that when property owners are underassessed - especially owners of pricey commercial real estate - homeowners end up subsidizing them. Since counties can go decades without reassessments, the inequities persist for decades as well.

"We don't have a remedy if we can't appeal," said Raymond Wendolowski, a solicitor for the Wilkes-Barre School District, which recently gained about $21 million in a settlement with the Mohegan Sun casino.

In a memo he sent to Rendell asking the governor to veto the bills, he pointed out that Luzerne County had not reassessed in more than 40 years.

Daniel C. Rudderow, a consultant with Keystone Realty Advisers in Haddonfield, which has lobbied against the bills, proposed that the bills could be amended to protect homeowners from spot assessments.

It is not known how many districts have used the "reverse appeal" option, but several in the Philadelphia area have. They include the Springfield Township district in Delaware County, which recently won a major increase after it filed appeals on stores in Springfield Mall.

In his veto message, Rendell noted that the reverse appeal was immensely popular in Schuylkill County, where more than 3,000 appeals have been filed in the last three years.

Rendell said the real problem was a law that allows counties to wait indefinitely between politically unpopular reassessments. He challenged the legislature to come up with a "long-term solution to this problem - the passage of legislation that would compel regular assessments."