Schuylkill County is on track for its first property tax reassessment since 1996.

County commissioners on Wednesday voted in favor of the review and to settle the lawsuit that pushed them into it.

The reassessment is being done as a result of a lawsuit filed by the Community Justice Project, a Harrisburg group which contends the county tax burden is unfairly distributed due to the 26-year gap in property value reviews.

The project will take about three years, so the new assessed values will be used to set taxes no later than Jan. 1, 2026.

In a related move, commissioners also agreed to seek requests for proposals from professionals to conduct the reassessment by September.

County Assistant Solicitor Glenn T. Roth Jr. said it was better to use the money that would have continued to have been spent on the “protracted litigation” to do the reassessment.

He said that Attorney Joan R. Price of Eastburn and Gray, P.C., Doylestown, whom the county hired in November 2020 to guide them through the suit, and property tax expert Alan S. Dornfest, “allowed the county to work with Community Justice Project over months and reach a settlement fair to both sides.”

“Who knows what the court would have ruled, and how fast it would have to be done,” he said.

The Community Justice Project filed its expert report in 2021, and Dornfest filed his.

Don’t panic

Commissioners cautioned homeowners to not be alarmed.

“Obviously, this is not going to be cheap to do. This is not something commissioners went out and looked to do. But we’re being backed into it (by the lawsuit),” Commissioners’ Chairman Barron L. Hetherington said. “It’s not a scheme to raise revenue.”

He said he was confronted Tuesday by a county resident at a convenience store where he had stopped to buy a gallon of milk.

“Why are you raising my taxes?” the man demanded.

“We’re not. It’s not a scheme to raise taxes,” Hetherington said.

Price reassured property owners that counties are prevented by state law from reaping a “windfall” immediately following reassessments.

“The assessment law requires that as a result of the countywide reassessment, that the first vote that’s taken by the commissioners look at the revenue collected on that assessment roll, and on that same list of properties, what would the revenue be collected under the new assessment roll, and to adopt a revenue neutral assessment rate, so that all you’re doing is adjusting for the new numbers,” she said.

She said that in her experience, about one-third of property values will be increased, one-third decreased, and one-third will stay the same.

Dornfest, who attended Wednesday’s meeting via video call, spoke of the need for sharing the tax burden equitably.

Dornfest said that based on his analysis of 2019 and 2020 data, “equity in terms of having an equal assessment … has slipped since 1996. Similarly situated taxpayers are not being assessed at the same percentage of the market value.”

He talked about vertical equity. “Higher versus lower valued properties. Are they both treated the same? That is not occurring in your county at the present time.”

Higher value homes have increased in value while lower value homes have not.

“That has, in a nutshell, shifted the taxes to the lower valued properties because they are closer to their market value than the high priced properties,” he said.

Land, and agricultural properties with buildings, have been underassessed compared to homes, Dornfest said.

“At the end of the day, fairness and vertical equity are important,” Price said. In fact, she said, the “Uniformity Clause of the Pennsylvania Constitution requires that nobody pays more or less than their fair share of real estate taxes. The goal of reassessment is to make sure we have that.”

The lawsuit

The Community Justice Project filed the lawsuit July 30, 2018.

Community Justice has filed multiple such suits in the state, including Lackawanna and Allegheny counties, arguing property tax burdens are unfairly determined.

According to the suit, the county’s failure to reassess since 1996 violates the Equal Protection Clause of the 14th Amendment to the United States Constitution. The lawsuit also declares that the actions and omissions of the county or contrary to the uniformity clause of the Pennsylvania Constitution, Article 8, Section one, and the Equal Protection Clause of the 14th Amendment to the United States Constitution.

The Community Justice Project filed the suit on behalf of Robert Heim, Ringtown; Lisa Aviles, Tamaqua; Michelle Boylan, Tamaqua; and Mischelle Damrose and John Damrose, Ashland, by the nonprofit Community Justice Project.

Heim has since died, and Aviles no longer lives in the county.

“Since 1996 the actual values of properties and Schuylkill County have, on average, increased substantially, but the rate of appreciation of property values has not been uniform,” the lawsuit states.

It’s complicated

The percentage of assessed to current actual value in Schuylkill County is 38.6%. The 38.6% is computed using verified, bona fide, sales which took place in Schuylkill County between 2014 and 2017, as provided by Schuylkill County to the Pennsylvania Tax Equalization Board” as required by state law.

“Using the same verified sales data, the countywide assessment for Schuylkill County has a coefficient of dispersion of 44.8%,” the suit says.

The COD is a “widely accepted statistical indicator of uniformity and tax assessments. COD is an average deviation from the median, mean, or weighted mean ratio of assessed value to fair market value, expressed as a percentage of that figure.

“In other words, a low COD indicates that the parcels under consideration or being assessed close to an equal rate. The COD for an assessment of an older, heterogeneous area like Schuylkill County should be no higher than 15%,” the suit says.

“In Schuylkill County, with a COD of 44.8%, 25% of the properties have assessed to actual value ratio no higher than 0.2925, while another 25 percent of the properties have an assessed to actual value ratio no lower than 0.5067.

“… For each one dollar that the 25% of these property owners who are most underassessed pay in property taxes, the 25% who are the most overassessed pay at least $1.73,” the suit says.

The lawsuit specifically mentions mobile homes, which it says depreciate yearly.

But in Schuylkill and all other counties, the base year assessment stays the same until the next reassessment.

“The Pennsylvania Constitution requires that all taxes shall be uniform, not the taxes were uniform at some arbitrary point in the past,” the suit says.

A local example

The lawsuit cites the cases of Aviles and the others.

Aviles purchased 214 Race St. in Tamaqua in 2016 for $13,000. “The 1996 assessed value upon which this property was taxed at the time this lawsuit was filed was $11,970. If this property was taxed at the 38.6% median ratio for Schuylkill County properties, it would have had a current actual value of $31,010, considerably greater than what Aviles paid for the property. Assuming the purchase price reflects the home’s current actual value, the assessment for this property, using the 38.6 percent median assessed to actual value ratio for all Schuylkill County properties would’ve been $5,018 at that time.

“Given the current actual value and current millage rates, Ms. Aviles was paying $535 more each year in property taxes than she would have been if assessed at the 38.6% median ratio of assessed to actual value.”

Aviles’ property was reduced to $4,990 in October 2018, after the filing of the lawsuit. “The reduction in taxes does not fully compensate Ms. Aviles however, because it does not address the substantial under assessment of other properties, or compensate her for past over taxation,” the suit says.

Current county numbers

Chief Assessor Kent Hatter said the county has 94,469 properties, including about 60,000 residential units.

The actual number of parcels ebbs and flows with subdivisions and additions, demolitions and new building.

As of Nov. 3, 2021, the Fair Market Value of all taxable properties in the county was $5,314,209,100.

The total assessed value of county properties as of Nov. 3, 2021 is $2,657,104,550.

Fair market value is what a property sells for on the open market.

Taxes are determined by the assessed value, which is currently 50 percent of the fair market value.

This year, the county anticipates $40,283,278 in property tax revenues. That’s 61.1 percent of its total $65,450,758 revenue.