After weeks of sounding the alarm, Pittsburgh Public Schools has filed a lawsuit with the Allegheny County Court of Common Pleas in hopes of compelling a court-ordered countywide property reassessment.
School board members voted unanimously last month to authorize district solicitor Ira Weiss to file the lawsuit. Weiss initially said that he would give Allegheny County Executive Sara Innamorato time to respond to the district’s claims of her own volition.
That changed Tuesday: the complaint names both Allegheny County and County Executive Sara Innamorato in her official capacity as defendants.
“We have provided the County Executive with a reasonable time to consider our request to order the reassessment,” Weiss said in a statement. “She has replied with the same general statements about more ‘review and study.’ The time has passed for that.”
Former county executive Rich Fitzgerald never ordered a countywide tax reassessment in the 12 years he was in office. Weiss said that created a broken assessment system.
He alleges that the county is violating the state constitution’s uniformity clause, which requires local and state taxes to apply the same measure to all taxpayers or properties.
A 2011 Pennsylvania Supreme Court ruling deemed Allegheny County’s real estate tax system unconstitutional given that it produced non-uniform tax burdens for owners of similar properties. That led to the county’s last reassessment in 2012.
“This indefensible refusal to have a reassessment since 2012 has also created a situation where the lower valued properties are over assessed, and higher valued properties are under-assessed,” Weiss continued. “This means those at the lower end of the spectrum pay more taxes than they should and those at the higher end pay less than they should. That is simply illegal and unfair.”
According to PPS chief financial officer Ron Joseph, the district is projected to deplete its fund balance by 2026, in part due to the barrage of property reassessment appeals approved by the county’s Board of Property Assessments and Appeals Review (BPAAR).
Reductions granted by BPAAR are projected to reduce the district’s revenue by 4%, or more than $4 million. While the district is appealing many of the county’s reassessment decisions, it could be liable to pay back $7.4 million in tax refunds — and that’s for the 2022 and 2023 tax years alone.
According to the complaint, that figure balloons to more than $10 million when appeals filed for tax year 2024 are taken into account.
Nearly a dozen appeals from Downtown office buildings have sought and won lower tax assessments in the wake of the coronavirus pandemic and court-mandated changes to how properties are valued.
A 2022 Common Pleas Court ruling ordered that the county's Common Level Ratio — a state measure used to reconcile current market values with those calculated in the last assessment — be reduced from 81.1% to 63.53%, meaning that property values for tax purposes would be set at 63.53% of current values. That number dropped to 54.6% at the start of this year.
“The [Common Level Ratio] essentially provides office building owners with a ‘market appreciation’ deduction on properties that either have had no market appreciation or have actually depreciated in value,” the district’s complaint alleged.
Like her predecessor, Innamorato will wrestle with a court-driven fight over reassessments
In a statement Tuesday, county spokesperson Abigail Gardner said officials would not comment on the pending litigation.
"Any reassessment must be revenue neutral and not a backdoor tax hike for the people of Allegheny County and should protect seniors and low-income homeowners in the process," Gardner added. "Ideally reassessments would be state-mandated, mundane, regular occurrences and not once per decade shocks to the system."
County Executive Innamorato made the same suggestion in a recent sit-down with WESA, adding that a state-mandated regular property assessment could address disparities in Pennsylvania's school funding system.
A Commonwealth Court decision declared the current system unconstitutional last year, highlighting disparities created by its reliance on local property taxes.
The lawsuit means that Innamorato, like her predecessor, will be wrestling with a court-driven fight over reassessments at the outset of her tenure: A lawsuit filed in 2010 triggered the last reassessment in 2012 – Fitzgerald's inaugural year in office.
And for a time during her campaign for the county executive post, Innamorato said she would support the county undertaking an initiative on its own, in part to fend off the likelihood of legal action. She later backed away from that position, saying a more thorough review of property taxation was necessary before she would undertake a reassessment. But she has continued to support protections for long-term homeowners, including an expanded homestead tax exemption, to help cushion them from a sudden change in their tax bills.
She and Pittsburgh Mayor Ed Gainey recently told WESA that, ideally, the state government would establish rules that set a timetable and other rules for regular reassessments. Innamorato said that would be the best way to "move reassessments from this political hot topic to one that is mundane, that's revenue-neutral, and just something that happens on a regular basis and we don't really think about it."
State senator Wayne Fontana has suggested that he’s willing to lead this effort. Fontana announced in a press release last month that he would begin to gather stakeholder input, as well as both state and national expertise, to develop a fair and equitable system for statewide county reassessments.
As of this week, no new legislation has been introduced. District solicitor Weiss added that school officials would not rely upon “the mirage” of future state legislation to address its revenue issues before the district depletes its fund balance. Administrators say that could happen as soon as 2026.
“If the situation is not stabilized, the District cannot continue to fund the early childhood, preschool and school programs that are essential,” Weiss stressed. “The School District, more than any municipal government or the County, relies upon the real estate tax as its ‘oxygen.’ The District does not have access to the array of taxes of other governmental bodies.”
Many experts agree that the current approach — in which values are more or less frozen for a decade or more until a court forces it to act — amounts to "the worst of both worlds." The years-long delay between reassessments makes sudden shifts in property valuations all but certain, and while state law limits the total amount of revenue that a reassessment can bring in, individual property owners can see huge shifts in value.
