Outdated Property Tax Assessments Result in Unfair Tax Burdens

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One of the most significant sources of revenue for public schools and local governments in Pennsylvania is property taxes. As homeowners across the Commonwealth know, property tax bills greatly affect the budgets of many households, from middle-class families to single parents to older adults on fixed incomes.

Despite the huge impacts of property taxes, many counties across the Commonwealth lack an up-to-date tax assessment. About half of the counties in Pennsylvania are using assessed values from before 2000; more than a dozen have not had a reassessment since before 1980.

Lackawanna County is one such county, having completed its last reassessment in 1968. Much has changed since then: housing in suburban communities has grown, while the City of Scranton lost about a quarter of its residents since the 1970 Census. Jobs and people have moved and shifted as the world has changed. The Institute’s analysis of data from Zillow found that some ZIP codes in Lackawanna County have seen home prices grow by anywhere from 23 percent to 48 percent from 2017 to 2021. Over a longer period, it is possible that these discrepancies could be even larger.

When property values appreciate at different rates in different neighborhoods, inequities result. Taxpayers who have seen relatively little appreciation in their property values since the last reassessment pay more taxes relative to the actual value of their home than those whose properties have appreciated more quickly; for this latter group of property owners, a larger gap exists between the assessed value used to calculate their tax bill and their home’s actual value. In other words, taxpayers whose property values have grown at above-median rates are under-taxed relative to taxpayers whose properties have either appreciated more slowly or depreciated. Accordingly, some judges in the Commonwealth have ruled that using out-of-date assessment values violates the Pennsylvania Constitution’s requirement that taxes be uniformly applied.

Earlier this year, Lackawanna County moved to begin the reassessment process. But dozens of other counties around the state still base their property tax bills on decades-old data. As a major source of government revenue and substantial part of most homeowners’ budgets, property taxes need to be collected equitably. While many homeowners may worry that a reassessment will bring higher tax bills, state law requires that reassessments be revenue-neutral – meaning that the overall tax burden will move around, but not go up. Some property owners will see their tax bills increase, others will see decreases, and others will see little change. In the end, though, these changes are important in ensuring that taxes levied on Pennsylvanians are uniform and fair.

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