This brings the controversy back into the public spotlight.
Dan Sullivan, an expert in this realm, wrote to the investigating team to provide additional
information. He hopes to get a response soon. WTAE TV needs to get it right and keep the story alive until it takes off as a community discussion point. We need the watchdogs to break the news and the citizens need to help sustain the news and discussion.
The transcript of their report is on the WTAE site. Check it out. The video (which seems to have the right edge clipped away) is in the upper right corner of the page.
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Team 4: Huge Property Tax Cuts For Some, But Not All
The following is a transcript of a report by Paul Van Osdol that first aired May 8, 2008, on WTAE Channel 4 Action News at 5 p.m.
A Team 4 investigation found that some homeowners in the Pittsburgh area getting a bargain on their property taxes while others get a raw deal.
It all depends on where you live.
As it turns out, people who live in the wealthiest areas like Shadyside, Sewickley Heights and Hampton actually have the lowest assessments, relative to what they paid for their homes.
But those living in the least affluent areas like Duquesne, North Braddock and Homewood are paying the most.
Steelers coach Mike Tomlin lives in a 9,200-square-foot mansion in Shadyside.
Retired steelworker George Ross lives in a 1,200-square-foot ranch in Duquesne.
But because of the way Allegheny County calculates your tax bill, basing it on home values in 2002 instead of the current market value, Tomlin is actually getting a better deal than Ross.
Tomlin paid $1.8 million for his house last year, but it is assessed at $1.1 million. That saves Tomlin $20,000 a year in property taxes.
Ross' daughter paid $19,000 last year for his house, but it's assessed at $32,000. That means Ross pays nearly $500 a year more in taxes than if the house was assessed at market value. And that's a lot for a retiree on a fixed income.
"That's not fair," Ross said.
But that's the way it works under Allegheny County's so-called base year system.
Many of Tomlin's neighbors are also getting a sweet deal. One house down the street from Tomlin sold last year for $1.4 million, but it's assessed at half that for $704,000, saving the owner $22,000 in taxes.
Overall, Team 4's Paul Van Osdol found properties in Pittsburgh's 14th ward, comprising Squirrel Hill and part of Shadyside, sold last year for an average of $306,000. But the average assessed value was just $191,000 or 38 percent below the sales price.
Compare that to Duquesne where the average sales price was $18,000, but the average assessed value $21,000, which is 14 percent above the sales price.
The low sales prices in Duquesne are no surprise to longtime resident Pat Bevan.
"There's two empty houses right here," said Bevan. "There's two empty houses down there. There's two empty houses right over here."
Yet a neighboring home on Friendship Street is assessed at $29,800, which is 50 percent higher than the $20,000 it sold for last year.
"It doesn't make me feel good," said Bevan. "It makes me mad. Why shouldn't I get a break too?"
But it's not just Duquesne. Team 4 looked at home sales last year all over Allegheny County.
In Tarentum, average assessments were 9 percent higher than the average sales price. In North Braddock, assessments were 29 percent higher than sales. In Pittsburgh's 13th ward, Homewood's and the East Hills' assessments were 51 percent higher.
But in wealthier communities, it's the opposite.
In Sewickley Heights, the average assessment was 27 percent lower than the average sale price. In McCandless, it was 30 percent lower and in Hampton, 37 percent lower.
Among those getting a boost from base-year assessments is $100 million Steelers quarterback Ben Roethlisberger. His home cost $2.2 million, but it's assessed at $1.7 million, which saves him $12,000 a year in taxes.
County Councilman Bill Robinson represents over-assessed areas like Homewood and East Hills.
"I think your research just bears out what I've known for a number of years," he told Van Osdol.
Van Osdol: "Is it fair for people in Homewood to have their property assessed higher proportionately than people in Sewickley?"
Robinson: "No. My position all along has been that we have to have a fair and transparent system."
County Chief Executive Dan Onorato concedes the base-year system is unfair, but he said it's necessary to keep people from fleeing to neighboring counties who assess property the same way.
"Is this 100 percent accurate? Absolutely not," he said. "But if the counties around us are going to do a base year, and my job is to keep Allegheny County competitive on property taxes. This is what we're going to do."
But an Allegheny County judge has found base year assessments are both unfair and unconstitutional. The Supreme Court is now reviewing the case.
The county's former top assessor, Dominick Gambino, said the system needs to change.
"You don't need any more evidence," he said. "A court ruling had determined you are unconstitutional, because you are discriminating against lower- and middle-class, middle-value properties."
Team 4 also looked at commercial properties and found sale prices are out of whack with assessments there as well. One prime example is the North Shore property bought by Don Barden's company where the new casino is being built.
PITG Gaming paid $22 million for the property last year, but the county assesses it at $6.5 million. That's a potential tax savings of nearly a $500,000 a year.
Target paid $4 million for the land where it built a store in Harmar. But the property was assessed at just $1 million.
Lowe's paid $20 million for a Bethel Park site that was assessed at $6.9 million.
Whether it's multimillion-dollar casinos or $1 million homes, critics say Allegheny County's property assessment system is rife with inequity and needs to be fixed.
"All the assessment is doing is determining the distribution of the tax burden," said Gambino. "And if you're living in a $1 million home, you should be paying your fair share."
Onorato said doing away with the base year assessments could mean a tax hike for most homeowners. But a study by Carnegie Mellon University found just the opposite. If the county used 2006 value, three-quarters of all homeowners would see a tax cut.
Pennsylvania is one of just two states that use a base year system. That could change if the Supreme Court finds Allegheny County assessments are unconstitutional. The court is expected to rule later this year.
To find the data, Team 4 looked at all the property sales last year and compared sale prices with assessed values.
John K. says: So to be clear here, what you are saying is that Roddey's method of assessing all the properties every 3 years is the correct method?
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