Downingtown Area School District v. Chester County Board of Assessment Appeals, 2023 Pennsylvania State Assembly LEXIS 161 (Pa. Commw. Ct., October 6, 2023). The Commonwealth Court dismissed the assessment appeal despite the standards set by the school district that made the property determination arbitrary.
Although a Pennsylvania appellate court allowed a school district’s tax assessment appeal to proceed if standards were set, the Commonwealth Court found that even with such objective standards, the appellate program’s It ruled that implementation must be uniform and not discriminate against particular classes of property. Based on the court’s decision, Appeal to Downingtown Area School District v. Chester County Board of Assessment, 2023 Pa.Commw. LEXIS 161 (Pa. Commw. Ct., Oct. 6, 2023) objections based on sales price or potential annual tax revenue are permissible, but the actual selection of the property is
This is because such challenges must follow established guidelines and cannot be arbitrary.
background
The Downingtown Area School District has established a policy to contest property assessments that could result in more than $10,000 in additional tax revenue annually. The adopted policy placed no limit on the number of appeals a school district could file in a tax year. But in 2019, the district hired Valbridge Property Associates to identify up to 15 properties that may have been undervalued by enough to meet the $10,000 threshold. The district has appealed 15 property tax assessments identified by Valbridge, adding another complex owned by taxpayer Marchwood Apartments. Marchwood owned her two separate tax parcels totaling 43.6 acres, on which were her 40 single-family buildings and her 504 residential apartments. Mr. Valbridge reviewed the valuations of real estate in the district, and the parties appear to have selected 15 to appeal as a “manageable number” given manpower and resources. Valbridge also excluded residential properties less than 3,500 square feet in its initial analysis. The company further divided commercial real estate into several categories. Furthermore, once 15 properties were selected, no additional objections were filed, even though there were many more properties that met the criteria. Even after Marchwood was added to the appeal list, one eligible land was not appealed because it was represented by a “very aggressive” lawyer.
The Chester County Common Pleas Court conducted the hearing on the district’s appeal. The trial court found that the school district’s policy failed because it did not direct the district to consider the type or nature of property when determining whether to appeal a property assessment. (Although the district has filed assessment appeals since the policy went into effect in 2012) in just one residential area). The trial court rejected the taxpayer’s constitutional challenge to the appeal, concluding that the Marchwood complex would remain undervalued and discriminate against other property owners if not appealed. The trial court also rejected a finding that the school district’s policy violated the state’s “uniformity clause,” which requires all taxes to be uniform for the same type of subject. The court noted that the article does not require absolute equality and complete uniformity in taxation. The district’s policy’s $10,000 threshold was neutral, especially since such a threshold is permitted based on previous state court decisions. Additionally, the policy did not effectively eliminate residential real estate appeals, resulting in the creation of an unconstitutional real estate subclassification. As a result, the trial court ordered that the assessed value of the Marchwood complex be increased to reflect its fair market value. The taxpayer then appealed the court’s decision to the federal court.
discussion
In its appeal to the Commonwealth Court, Marchwood again argued that the district’s policy violated the Equal Protection Clause and the Uniformity Clause. To address these, the Commonwealth Court examined the history of uniform clauses and valuation law in general. The court reiterated that all real property within a taxing district is a “single class” and that the Uniformity Clause does not permit taxing authorities to treat different subclasses of real property in disparate ways. Therefore, if a taxing authority challenges only the valuation of a particular type of property, it would be acting outside the applicable constitutional boundaries. However, the court cited precedent and reiterated that appeals can be based on neutral selection criteria, such as monetary criteria, as long as they are implemented regardless of the type of property in question or the owner’s residential status. This result holds true even when the monetary standard is very high and only affects the valuation of commercial real estate.
Based on this history, the court found that Downingtown’s policy of using monetary criteria to identify real property may be constitutional. However, the district chose to appeal the assessment of 16 properties even though it knew there were many more properties within the district that met this criteria, making the policy arbitrary. It was conducted. Additionally, Valbridge testified that there were no hard and fast rules regarding the methodology used to identify properties and that the goal was to “maximize the benefit to the school district.” The court noted that the Marchwood complex was not on the original list of properties identified for the assessment appeal, and the district provided no explanation for its subsequent selection. The court also viewed negatively the fact that the district had denied another commercial real estate appeal despite meeting the criteria because the attorney was aggressive. The district’s decision to deliberately leave many undervalued properties alone and to introduce a phased approach to its policies creates a lack of uniformity through the application of such random thresholds, creating a lack of uniformity. resulting in different treatment contrary to the gender clause.
Overall, the courts, while affirming the use of uniform standards in tax assessment appeals, appear to have taken issue with lax or inconsistent implementation of such policies, and appears to have made an ad hoc decision on the appeal.
practical advice
of downing town The court’s decision makes clear that while neutral standards may pass constitutional scrutiny, they must still be implemented in a fair manner. To avoid legal challenges to your program, you must closely follow your district’s policies and standards-setting practices.
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