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TAXING TIMES: Answers to some of your questions

Saturday, August 26, 2000

Do the new property values that were mailed starting Friday become effective immediately?

No. The values mailed by Sabre are preliminary. They won't become official until they are accepted by the county, which will mail its official notices of property values around Jan. 1. Between now and then, property owners who disagree with the preliminary values can contact Sabre to request an informal review.

If Sabre's reassessment places higher values on most properties in Allegheny County, doesn't that mean that most people's property tax bills will go up?

No. Sabre's reassessment is revenue-neutral. To raise the same amount of money on properties with higher assessments, school districts and local governments will need to reduce millage rates accordingly.

(That doesn't mean that school boards and municipal councils won't raise property taxes next year. But they can do that any year, reassessment or not.)

The biggest impact of the reassessment will be on people whose property has been greatly underassessed compared with neighbors who live in the same school district and municipality. They will pay much more in taxes than they have paid. Others will pay the same, or less. Put another way: For every person who pays $1 more in taxes because of the reassessment, another person will pay $1 less. The ultimate goal is that people who live in houses of similar market value will pay similar taxes.

But won't school districts and local governments get a windfall because of the higher property values?

They're not supposed to.

State law prohibits these jurisdictions from reaping a windfall of more than 5 percent from the reassessment.

But windfall makes it sound like this money will fall from the sky.

In fact, the elected boards of school districts and municipalities decide each year how much money they need to raise through property taxes. They set the property tax rates needed to raise those taxes, property reassessment or not. That is their decision, and it's independent of the property reassessment.

If they decide to collect 5 percent more just because they can, you have good reason to complain.

Why was a reassessment of Allegheny County properties needed?

A judge decided in 1997 that the assessments were so unfair that a reassessment of every property was the only way to fix it.

If the assessed value of my home goes up 25 percent, will my taxes go up 25 percent?

It's almost impossible to say. If the values of most of the other properties in the taxing districts where your home is situated also go up 25 percent, then your property taxes should remain about the same, unless those districts vote to raise taxes. But if the values of these other properties don't increase at all after they are reassessed, then your taxes would go up 25 percent. You won't know how the reassessment will affect the amount of property taxes you owe until each taxing district refigures its tax rate based on the changes in value of all the properties within its boundaries, which won't happen until the end of this year and early next year.

The assessed value of my residence used to be 25 percent of its market value. Now the county says the assessed value will be the same as the market value, which is the amount the property could fetch if put up for sale. Why the change?

It's just a lot simpler. No longer will it be necessary to divide the market value of your residence by four to get the assessed value. Market value and assessed value will be the same. School districts and local governments will lower their millage rates to account for the change. To figure the property taxes you owe beginning next year, you will simply multiply your millage rate by your property's market value.

No one from Sabre Systems looked inside my house. How can my new assessment be accurate?

If you weren't home when a Sabre data collector stopped to see your home, a questionnaire should have been left for you to fill out and mail. If you declined to let a data collector inside, he or she should have questioned you about the interior. If you didn't provide information about your home's interior, the data collector calculated what was inside through information gathered from outside -- the number of standpipes on a roof is a good indicator of the number of bathrooms, for instance. Sometimes neighbors offer information. You should have received in the mail the data about your home's interior that was used in its appraisal, which you could return to Sabre with any corrections.

Even so, a home's interior accounts for only about 10 percent of a residence's appraisal, says George Donatello, Sabre operations director for Allegheny County's reappraisal. An accurate appraisal is possible without looking inside a house.

How does millage work?

A mill means one thousandth, or .001. When school districts, municipalities and counties levy property taxes, each mill levied raises $1 for every $1,000 of a property's assessed value. For example, a school district that levies 50 mills (.050) in property taxes will receive $2,500 in tax revenue from a home assessed at $50,000.

Here's the math: .050 x $50,000 = $2,500.

For years, Allegheny County failed in its efforts to accurately appraise properties so that the property tax would be more fair. The Pittsburgh Post-Gazette wrote lots of stories about the problems. Won't this reappraisal soon be out of date and put the county back into the same old rut?

That's possible. Sabre Systems will complete its work on the reappraisal at the end of the year. It will then turn its work over to the county, which will take over the responsibility of keeping property appraisals accurate. It will take a commitment on the part of the county to provide enough money to do that. The computer programs used by Sabre should make it simpler for the county to track changing property values than in the past. Updating property values on a regular basis would help avoid the shock of one-time reappraisals that come years apart.

I'd like to know the preliminary value that Sabre placed on my neighbor's home, which is very similar to mine. Can I find out without asking my neighbor?

Not until January. Sabre Systems' reappraisals won't be added to county computers until they become official at the end of the year. At that time, you'll be able to use computers at the Allegheny County Courthouse to find property values of homes similar to yours, which is helpful if you plan to appeal your property's value.

For most people, getting to the courthouse or the municipal building isn't very convenient. But the county so far has turned down a proposal by Sabre that would have allowed people to check on the assessed value of county properties over the Internet.

What should I do if I don't agree with the assessment set by Sabre?

Set up an informal review. It's explained in our step-by-step look at the appeals process.

What if I'm still not satisfied when my assessment becomes official?

You can file a formal appeal with the county appeals board. A hearing will be scheduled at which time you will be able to explain your objections and offer information to back them up. Again, for a step-by-step explanation, click to our report on the appeals process.

I have a modest home that is beautifully furnished with expensive furniture and antiques. I'm certain my home will be appraised higher because of that.

The property cards used by Sabre data collectors for each Allegheny County residence include specific spaces for structural information about your home's interior, ranging from the type of heating system to the number of bathrooms. But furnishings are not included or written down. They are not part of a home's assessed value.

The assessments on my property were raised this year and the year before. Why am I being reappraised again?

In a 1997 ruling, Common Pleas Judge R. Stanton Wettick Jr. ordered that every property in Allegheny County be reassessed. He also directed the county's assessment board to raise property values across the board by 2 percent in 1999 and 2 percent this year as interim steps. The current reappraisal, which will go on the books next year, is the final step in the judge's order.

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