Millage Change Requirements Following Reassessments

Member Group : Allegheny Institute

Policy Brief (Volume 12, Number 8)
Millage Change Requirements Following Reassessments

(February 8, 2012)–In the weeks since the 2012 assessed values were
judicially postponed to become the 2013 assessed values, mailings
have been sent out to property owners in some parts of the County.
During this time statutes requiring the adjustment of millage rates
to prevent revenue windfalls have been treated with disdain,
disbelief, and disregard. Indeed, the County Executive has commented
in news articles that such requirements have "no teeth" and that it
is "only a theory".

When the County last reassessed in 2002 taxing bodies in Allegheny
County were permitted to take 105 percent of what they collected in
tax revenue the year before the reassessment (new construction and
improvements are not included). This was set out by Act 146 and
reinforced for the County in Article II, Section 3 of the Home Rule
Charter. A review by the County Controller’s office dated July 1,
2003 found that four of the County’s 43 school districts (9%)
violated the 105 percent limit by taking in more than that amount
without separately voting for a tax increase after the 2002

The 105 percent requirement stayed in place until the state passed an
amendment to the Second Class County Code which came to be known as
Act 71 of 2005. That law stated that when there is a reassessment
the County, the municipalities, and the school districts in Allegheny
County would have to amend millage rates to be revenue neutral and
could then, "by a separate and specific vote", take another 5 percent
over that revenue neutral amount. In other words, the old 105
percent could not come in one step without a vote letting the public
know that it was happening. Taking in more than 105 percent under
Act 71 requires Allegheny County and its municipalities to seek
approval of the courts.

A year later (2006) the General Assembly held a special session on
school property taxes and produced Act 1, which addressed tax
shifting among types of taxes, limits on school property tax
increases, exceptions to those limits, and tax increases through
voter referenda. The act contained a section on property tax limits
on reassessment and noted "notwithstanding any other provision of
law" that a school board "shall…reduce its tax rate, if necessary,
for the purpose of having the percentage increase in taxes levied for
that year…be less than or equal to the index for the preceding
year". That does not mean revenue neutral, but within the index
determining how much school taxes can increase under the statute.

Act 1 applies to all school districts in the Commonwealth including
those in Allegheny County. Thus, the reassessment provisions of Act
71 have been superseded as far as school districts in the County are
concerned. Finally, note that in non-reassessment years school tax
increases are limited to the amount of the district’s index as
determined by the Department of Education. A district can apply to
the Department for an exception to go beyond the index or submit the
increase to the voters.

For Allegheny County these laws mean that in a reassessment year the
taxing bodies are going to have to roll back millage rates but with
different requirements depending on whether it is a school district
or the County or one of its municipalities. The County, currently at
5.69 mills, and the 130 municipalities, with varying millage rates,
do so under Act 71 while the 43 school districts do so under Act 1.
While the Executive expresses skepticism about what the
municipalities and school districts will do in regards to rollbacks
he needs to keep in mind that the County is likewise required to

So the questions, as far as the Allegheny County reassessment goes,
are threefold. First, will the taxing bodies follow the law and roll
rates back? That will only become clear once the reassessed values
are certified and put into place. Conversations with assessing
officials in counties that have reassessed in recent years (Adams in
2010, Luzerne in 2009) indicate that the taxing bodies from the
county down to the school districts followed the law. Note that
counties other than Philadelphia and Allegheny were until recently
subject to other statutes but are now all under a consolidated act
that requires revenue neutral rollbacks and a separate vote to take
up to 10 percent above the prior year’s revenue. The counties’
actions were vetted by the contractors who conducted the

An examination of the millage rates in those counties before and
after can only tell so much about the impact of the law. In fact, the
millage rates were lowered but there are complicating factors such as
changes in the predetermined ratio (for instance raising the ratio of
taxable amount to appraised value from 50 to 75 percent).

Second, what happens if taxing bodies refuse to comply with the
anti-windfall provisions? A serious shortcoming of the laws is that
they don’t spell out who is in charge of ensuring that taxing bodies
follow the requirement, nor specify what, if any, punishment should
be imposed for refusal to follow statutory requirements. In the
aforementioned 2003 Controller’s study all that could be done was to
make recommendations for corrective action. Moreover, there is
nothing in the April 2009 Supreme Court decision ordering the Common
Pleas court to ensure compliance on the rollbacks.

Clearly, refusal by elected officials to comply with state laws ought
to be grounds for severe punishment, including possible removal from
office. There is a dire need for the Legislature to write a blanket
law or amend statutes to specify the actions that will be taken
against elected officials when they refuse to obey laws they have
taken an oath to obey. These actions need to be severe enough to
dissuade elected officials from even contemplating ignoring or
violating state laws.

Third, who will have the power to act and on what grounds? Perhaps
it would fall to the Attorney General on the recommendation of a
judge that has been petitioned by citizens who have documented
evidence of the elected officials’ malfeasance. Legislators can draw
on constitutional and legal experts to draft the language. But it is
high time that elected officials learn to live by the law and honor
their oath to obey the laws. And they should be put on notice that
elected office is not the proper venue for civil disobedience.

Eric Montarti, Senior Policy Analyst
Jake Haulk, Ph.D., President

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