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Spot Appeals Under Attack in Pennsylvania

by Tom Branham, Washington D.C., January 2015


In Pennsylvania, school districts have the authority to appeal values on properties that appear to be under-assessed. This practice of filing "spot appeals" is becoming an increasingly common method to generate more money for public education.


Apartment Properties Targeted


Apartment properties are a favorite target for spot appeals by school districts. That's because apartments have shown the biggest gains in assessed values over the last decade.


The Pennsylvania Apartment Association charges spot appeals are killing any incentive to invest or improve apartment properties in the state. "Less investment leads to less valuable property, fewer desirable living locations, and less quality rental housing," a PAA member statement reads.


Now the PAA is calling on lawmakers to pass legislation prohibiting school districts from initiating spot appeals.


Round Two


A bill outlawing spot appeals died in the last legislation session. The bill lost support after a provision was inserted allowing school districts to demand a reassessment only if the district stood to make $10,000 or more from the process. Another version of the bill is expected to be filed this session.


Proponents say the legislation is needed because spot appeals violate Pennsylvania's uniformity clause. The state Constitution says taxes should be uniform across all property types and therefore an individual apartment, office, or retail store can't be singled out and taxed at a different level.


Courts Do Not Concur


Pennsylvania courts have ruled that school districts have the same right to appeal an assessment believed to be too low, as property owners have to appeal an assessment believed to be too high. A landmark 2013 court case ended in favor of the school district. It was appealed to the Pennsylvania Supreme Court but the court declined to hear the case.


In similar cases, Federal Courts have ruled in favor of taxpayers on issues of uniformity and equity. Justices held that equal and uniform assessment trumps any need to determine a 100% market value estimate.


Change is Needed


As things stand now, property owners should realize they will face an uphill battle fighting a spot appeal by a Pennsylvania school district. The only way for that to change would be via successful litigation or a directive from the Legislature.


This is a battle that needs to be fought. POER has the experience to help owners and managers get involved in the debate. New legislation is needed to prevent inequities and uphold taxpayers' rights.