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Sara Innamorato was elected as Allegheny County Executive just last week. But winning a grueling race in which she was badly outspent, and triumphed by a razor-thin 2 percentage points, might have been the easy part. Especially when it comes to one of the most contentious issues during the campaign: property tax reassessment.
The subject already surfaced this past Tuesday, when Pittsburgh City Council heard a presentation about the city’s 2024 spending plan from council budget director Peter McDevitt.
McDevitt noted that long-scheduled debt payments in 2025 and 2026 could mean a couple of lean years with cuts to expenditures for things such as street paving. And while the debt crunch will ease after 2026 for the long term, “We need to find a way to bring in more revenue,” he said.
Among other fixes, he said, “Hopefully the next Allegheny County executive … will consider doing a real estate reassessment, and that will buy us some breathing room.”
A reassessment is a countywide effort to assign a fair valuation to properties as a basis for taxing them: The last one in Allegheny County happened after a court ordered it more than a decade ago. And council’s budget committee chair, Daniel Lavelle, agreed it was past due.
Such a move could produce between $5 million and $6 million “to help this city out,” he said. He suggested council send a formal resolution urging Innamorato to undertake the process.
“I’m not sure if members support reassessment, but in my personal opinion, we should do it every two to three years,” Lavelle added.
No one exactly ran out to grab a pen and paper to draft a statement: There was hardly any discussion at all. Reassessment has been a third rail in local politics for nearly two decades, ever since the first Allegheny County executive, Jim Roddey, lost his reelection bid amid a contentious reassessment process.
Still, Innamorato’s campaign included a promise to reassess properties as part of a broader effort to be fair — one she said would include protections from spiking tax bills for longtime homeowners and seniors. It was one of the boldest positions of the campaign. And while allies of her Republican rival, Joe Rockey, often tried to portray Innamorato as a policy lightweight, on this issue she had a broad array of policy experts on her side.
“I don’t think there’s a whole lot of debate that it would be better to have a regular and routine reassessment,” said Chris Briem, a regional economist at the University of Pittsburgh. “There’s nothing good that happens from putting it off,” because the more time elapses after values are weighed, the more out of whack they get.
Pittsburgh is arguably ground zero for the problem, thanks in part to COVID-19.
Work-from-home policies have cratered the commercial real estate market. That threatens to make the Golden Triangle — which represents some of the priciest real estate in western Pennsylvania — less valuable.
“We’d expect those owners to appeal their property values downward” to get a cheaper tax bill as a result, Briem said.
In the absence of a global reassessment, tax values change when well-heeled owners try to reduce them or a local government sees a recently purchased property fetched a much higher price than its previous assessment level. If the tax base erodes, officials are more likely to raise rates or cut services for everyone, including those least able to weather the change.
By reassessing everyone at once, Briem said, “You could capture all these changes, reset [property] values for everyone and the taxing body should remain whole.”
But the debate here is less about the policy than the politics, and the difficulty of getting assessments right in a county that has 130 municipalities and 43 school districts, each with their own officials setting tax rates.
Critics of reassessment raise a number of fears. Higher valuations can drive residents over the county line to places like Peters Township or Cranberry, where values haven’t changed. And while state law caps the revenue bonus a school district or municipality can get from reassessment, that applies only to the total haul, not what any given taxpayer is charged. Your township may get only a 5% revenue boost from reassessment, but your assessment could increase by much more than 5% — while your neighbor’s falls.
Of course, your neighbor could be on the losing end instead: It all depends on how your property’s value changes relative to the community. But people — and the politicians they elect — are often risk-averse.
Innamorato has said she’d push reassessment as part of a “modern, transparent and fair” system — and she’s pointed out that doing nothing may not be an option because a judge could order yet another assessment. And that is nobody’s idea of a good time. Court-ordered reassessments have been one-offs, rather than an ongoing review of values every few years, which is what assessment experts recommend to reduce sticker shock and ensure fairness.
The occasional reassessments mean in Allegheny County, “You’ve been getting the worst of both worlds,” said Ron Rakow of the Lincoln Institute of Land Policy, which is based in Massachusetts. “You’re getting the shocks when the re-evaluations occur, but you’re only having the equity and fairness for a couple years.”
Rakow himself helped establish regular assessments in Boston. And while “it’s never tranquil in an assessor’s office, it was as close to tranquility as you could get, because we had a regular cycle and predictable values,” he said.
For the sake of her own tranquility, it would be easy for Innamorato to leave this to the courts as her predecessors did. There are other ways to help the city: McDevitt, the City Council budget director, suggested the county could help pay for community-health initiatives to serve homeless residents, for example.
No doubt there are risks, political and otherwise, to doing a reassessment. But there are risks in not doing one as well.
