Downingtown Area School District v. Chester County Board of Assessment Appeals

the The- within the if city would remain neighborhood North atre were taken URA. joins dissenting opinion.

Justice CASTILLE

913A.2d 194 AREA DISTRICT DOWNINGTOWN SCHOOL BOARD CHESTER OF ASSESSMENT APPEALS COUNTY Lionville Associates Station S.C. Appeal Lionville Station S.C. Associates. Pennsylvania.

Supreme Court of July Re-Submitted 2006.

Decided Dec. Morillo, Unruh, Turner, Frees, Keenan Esq., John Burke & P.C., for Lionville Station S.C. Associates. Sommer, Brion, McGuire,

Jeffrey Buckley, R. Esq., Morris L.L.P., Chester, & Sommer West for Chester Board Assessment Appeals. Withers, P.C., McErlane, Esq.,

Scot Russel Lamb E. James McErlane, McErlane, P.C., Chester, Lamb Esq., West Downingtown Area School District. General, Esq.,

Gerald J. PA Office of Pappert, Attorney Attorney of PA. General Commonwealth CAPPY, C.J., CASTILLE, NEWMAN,

BEFORE: and SAYLOR, EAKIN, BALDWIN, BAER and JJ.

OPINION

Justice SAYLOR.1

This matter concerns the prevailing issue whether the statutory scheme for tax equalization obviates the common law procedure asserting for a challenge Uniformity under of the Pennsylvania Clause an Constitution. This is issue first impression this Court. subject is a property “neighborhood” (strip) shop

ping Appellee center within Downingtown located Area School District In County. County Chester assessed subject $5,800,000 property approximately part countywide in which reassessment all real estate was assessed value, 100% of its fair market effective January 1998.2 reassigned 1. This case was to this author.

2. Fair property, market value is the value actual and is defined as price purchaser, willing obliged buy, pay but not would an owner, sell, willing obliged to considering but not all uses to which the property adapted might reasonably applied. Green (“Appellant”) Associates S.C.

March Lionville Station $10,400,000. The approximately for property purchased assessment, $5,800,000 and the District appealed School increased the assess- Appeals Board Assessment County’s $6,500,000, foot. per square or 2000 to year $77.86 ment for have as- again seeking District appealed, The School $8,500,000, per or increased to sessment further $101.81 foot. square that, hearing, parties stipulated ensuing

At the de novo fair market value subject year property’s for tax 2000: (“CLR”) ratio for the $8,500,000; the common level was Tax Board Equalization the State determined County, value; (“STEB”), market and the established 85.2% fair was (“EPR”) real estate assessing for taxable ratio predetermined County’s market value. The 100% of fair County in the was shop- average testified that the chief assessor per subject was centers similar ping $64.29 foot, for the $77.86-per-square-foot figure and that the square unifor- in an effort to achieve subject arrived at property was adjusting age, other commercial mity properties, with such location, construction, demographic Appellant factors. testimony of commercial real estate expert also presented Eiffes, analysis com- performed had who appraiser Scott centers shopping with seven other paring analysis, he In his comparable. in the which deemed comparables for the determined that the assessments Eiffes foot, and that the ranged per square $47.87 $89.62 comparables to actual for the ratio of the assessed value range Accordingly, Appellant in the of 34% to 69%. relief, that an requested arguing District’s opposed the School consti- in a violation of the increased would result Const, art. uniformity. of tax See requirement tutional Pa. (“All VIII, uniform, the class of 1 be same taxes shall authority levying the subjects, the territorial limits of within tax, general and collected under the and shall levied laws.”). 6, 185, County Appeals, 194 n.

Schuylkill 772 Bd. Assessment (2001). n. 6 however, rejected Appellant’s argument, The trial court initial indicating Appellant’s as an matter that all of evidence comparable the irrelevant because concerning properties was pertinent the class of of all real estate properties consisted The also the the district. court stated that existence CLR, STEB, meth superseded prior the as calculated the ods of trial determining uniformity. The court nonethe less apply granted declined to the CLR and instead the School District’s relief requested by assessing the value, $8,500,000. EPR of 100% of market or the fair See Area Downingtown Sch. v. Bd. As County Dist. Chester (CCP 00-01233, sessment No. Order Chester Dec. Appeals, 2001). subsequent explain In its did not opinion, the court CLR, itwhy had decided not to but apply merely repeated Appellant’s proof its assertion that regarding comparables Downingtown irrelevant. See Area Dist. v. was Sch. Chester County Bd. Assessment No. Appeals, slip op. 2002).

(CCP March Chester A published divided Commonwealth Court affirmed decision. Area Downingtown County Sch. Dist. Chester (Pa.Cmwlth.2003) Bd. Assessment Appeals, A.2d 615 (en banc). that, Initially, majority noted under a amendment to A County Second Class and Third Class 1931,3 Law of Assessments the Board of Assessment Appeals utilize required the EPR unless CLR varied from by more than fifteen It percent.4 also indicated that 26, 1931, (as amended, 5342-5350k) Act of §§ 3. June P.L. P.S. (the Law”). County “Assessments Since Chester is a third of the class, and, governed by real estate assessment is the Assessments Law enactment, County extent not with such inconsistent the General Law, (as amended, May Assessment Act of P.L. 853 72 P.S. 5020-101-5020-602). §§ statutory provisions govern Similar relative classes, counties of other with General Assessment Law See, applying contrary provisions. also e.g., absence of Kowenho- County Allegheny, ven v. Pa. n. 548 & (2006). 1005 & n. 1 Bright, Joseph Jur2d Summ. Pa. (2004). 15:5 Taxation Law, 8(d.2) The court cited Section of the Assessments which states: board, determining property, after market value shall apply predetermined then established ratio such value unless published by level Equalization common ratio the State Tax 464 uniformity mounting challenge

traditional method of —offer upon county records— ing expert compute CLR based in permissible legislative of the 1982 longer light no change. id. at Hromisin v. Board Assess (quoting 619 (Pa. A.2d 819 County, ment Luzerne 719 Appeals of Cmwlth.1998)). Nevertheless, court, majority like the trial CLR, apply indicating declined to instead was county its undisputed County’s that the EPR from 1996-97 100%, reassessment set and that the CLR wide was year 2000 Because the CLR varied from the EPR was 85.2%. EPR, majority less than fifteen conclud percent the subject property ed the trial court’s decision to assess fair statutory at 100% of its market value consistent with was requirements, rendering Appellant’s uniformity challenge thus meritless. See id. at 620.5 Friedman filed a in Presi-

Judge dissenting opinion which line dent on a of decisions Judge joined. Relying Colins Court, Judge proof tending this Friedman stated that properties establish the assessment-to-value ratio of average challenge, uniformity within the district is relevant to specifically approach and that this Court has endorsed an taxpayer proffers regarding which the evidence assess- ratio of to the one at issue. properties ment-to-value similar (Friedman, J., In re dissenting) (quoting See id. at 622-23 94, 101, (1958), 137 A.2d Deitch Bldg., Brooks Pa. Assessment, Appeals Co. Board & Review Prop. 213, 223, County, Pa. 402-03 Allegheny A.2d (1965), and Keebler v. Board Revision Taxes Co. percent varies than Board ... more fifteen from the established ratio, predetermined apply in which case the board shall that same property. common level ratio market of the to the noted, 5349(d.2). provision

72 P.S. As in 1982. added Although 5. the court its its determination that the rested decision fifteen-percent challenge statutory precluded any uniformity rule context, present reprinted testimony portions also trial court alia, pertaining, Appellant's expert manner inter in which had appraised comparable properties, id. at 620-21 nn. see testimony A.2d view that and stated its such showed expert appraisal” had not conducted an "official question. id. at Phila., (1981)). Judge Pa. Friedman therefore concluded that the trial court had erred refusing comparable that the Appellant’s consider evidence properties had all been assessed at 34% and 69% of between that, fair also their market value. She to the extent opined Assembly fifteen-percent the has made the rule of General 8(d.2) 4) (see supra Section of the Assessments note the Law uniformity, judicial for tax usurped exclusive test has the of interpreting Pennsylvania function the She Constitution. indicated, moreover, the fifteen-percent “actually rule uniformity” by allowing defeats variances assessment-to-value (fifteen of EPR), to 30 and up percent percent above the below VIII, whereas courts have interpreted Article Section embodying a requirement taxing authorities assess all property at the of percentage same See at 624. value. id. review,

This Court granted discretionary limited to two issues, the being first whether the Commonwealth Court and 8(d.2) trial court in concluding erred that Section of the Assessments supersedes Law the methods determining of uniformity by established this Court. second issue— is only which if relevant we conclude that the not EPR should have been to the applied subject property pertains wheth- — er the trial and court Commonwealth Court erred disre- garding Appellant’s testimony. uncontradicted valuation See Downingtown Area Sch. Dist. Chester Bd. As- County of (2004) Appeals, sessment 577 Pa. (per A.2d 74 cu- ). riam

In tax assessment appeals, this Court considers wheth er discretion, the trial abused its court error of committed an law, or a decision not supported by reached evi substantial dence. See v. Allegheny Beattie County, Pa. (2006);

A.2d Area Wilson Sch. Dist. v. Hosp., Easton .6 (2000) 5 n. 747 879 n. 5 Presently, scope present 6. Because the question our calls review into the 8(d.2) Law, constitutionality Section Assessments P.S. 5349(d.2), Attorney General was invited to intervene. Down- ingtown Appeals, Area Sch. Dist. v. Chester Bd. Assessment Pa. at 74-75. He has not to do elected so. erred claims that Court Appellant Commonwealth Law, 8(d.2) based Section Assessments concluding, challenge a uniformity method mounting traditional from the EPR no no varies longer valid where CLR that, urges despite percent. Appellant more than fifteen resulting formula contained in that provision, uniformity. requirement must still meet the constitutional to the that the 1982 amendments The School District counters con- means of statutory assuring Assessments provide Law district, and relieve uniformity stitutional within voluminous data taxpayer compiling onerous task a claim of non- expert testimony order raise presenting District) (School at 13-14. Brief for uniformity. Appellee contrast, maintains Appeals, The Board of Assessment that, clarity, uniformity the sake of STEB-calculat- fair applied property’s ed CLR should be appeals, notwithstanding market in all assessment done there is only directive that where statutory EPR. fifteen-percent differential between the CLR (Board at 17. Appeals) of Assessment Appellee See Brief 1930, is that a early recognized taxpayer As this Court his Uniformity entitled to relief under Clause where of fair market higher percentage is at assessed taxing throughout than other district. properties value 385, 388, 653, Co., 149 Realty In 299 Pa. A. Harleigh See re (1930). principle This based precept general 654 is their pay propor- no more or less than taxpayers should Deitch, 220, at 209 Pa. government. tionate share Delaware, Tax at L. & Co.’s 401. See W.R. (1909) (“While Assessment, 240, 243, every Pa. 73 A. burden, the citizen cheerfully tax is a it is more borne when his share only required proportionate feels that he is to bear the value of his of that burden measured thought is not an idle in the mind of neighbor. of his This speculative theory nor is it a mere advocated taxpayer, but is a subject; princi- learned on the it fundamental writers every into and statutes of almost ple written the Constitutions in country.”). state presenting

A evi- taxpayer may prove non-uniformity by of “similar properties dence assessment-to-value ratio neighborhood.” Bldg., the same nature Brooks 391 Pa. 101, Deitch, at at acknowledged 137 A.2d the Court compara- that all in the properties taxing relevant district purposes calculating appropriate ble ratio (as of assessed value to market all real estate is a class treatment). Keebler, which is entitled to uniform Accord 142, observed, however, Pa. at 436 A.2d at 584. The Court that, in the context of a uniformity challenge, parties the trial court may rely upon concerning evidence assess- ment-to-value ratio of similar done in properties, was Deitch, 223, 402-03; Brooks see Bldg., 417 Pa. at 209 A.2d at see also Brooks 391 Pa. Bldg., (stating 137 A.2d at 275 that “the tax applied must be similar uniformity upon with kinds of business or property”), because such “similar proper- evidence, ties” not comprehensive, while is nonetheless rele- to the uniformity analysis; further, vant a prac- would be tical impossibility require the taxpayer to evaluate the assessment-to-value ratio of every parcel district. Keebler, 584; 496 Pa. at Harleigh, 436 A.2d at 299 Pa. Moreover, relevant, A. at 655. given that it is such Deitch, proof must be considered. See 417 Pa. at (“Where relevant, A.2d at 402 the taxpayer’s testimony unrebutted, credible and it must be due given weight and court.”); cannot ignored see also In re Woolworth Co., 583, 587, (1967); 235 A.2d 795-96 McKnight Assessment, Shopping Ctr. v. Board Prop. Pa. (1965). This led to a situation which

courts determined the by expert CLR ordi- testimony, which narily cases, consisted of statistical analyses. In such where property owner able to demonstrate that the parcel question was assessed at a percentage exceeding of value percentage applied generally district, throughout taxing the property owner was entitled to a reduction in the assess- ment in conformance with the generally applied percentage. Keebler, 584; Deitch, 496 Pa. at 436 A.2d at 401; Pa. at 209 A.2d at McKnight, 417 Pa. at 391-92; A.2d at 276; Brooks Bldg., Pa. at 137 A.2d at Indeed, this is 149 A. at 654.

Harleigh, Woolworth, thus, uniformity. equalization, essence “uniformity has at (stating at 795 426 Pa. at among of the ratio all equalization heart the its district”). Tax Equalization amendments to the State Due to the 1982 Law,7 for each now calculates CLR Board the STEB 4656.16a(a).8 Furthermore, § 72 P.S. on an annual basis. See Law, CLR, the Assessments is defined purposes § 5342.1. This See 72 P.S. that calculated STEB. the tradi- question raised the of whether revision legislative non-uniformity was proving approach tional expert-witness In district had a circumstance where still viable. EPR, margin legislatively-determined presence set or raised figure of fifteen above below such percent of error statutorily-endorsed margin issue of whether the additional satisfy the dictates may operate automatically of error Clause, taxpay- relief for a thereby precluding Uniformity from the CLR assessment at the EPR deviates er whose the first range of tolerance. As to less than the defined Hromisin, Court, suggested the Commonwealth question, (albeit dicta) non- approach proving the traditional matter, the In the present no be valid. uniformity may longer the second question has answered Commonwealth Court in effect statutory fifteen-percent rule indicating that margin any uniformity challenge within eliminates error. implicated presently. questions

Both of these for the because the basis question plainly second raised that the CLR of 85.2% disposition was Commonwealth Court’s amended, (as P.L. No. 447 72 P.S. 7. Act of June 4656.1-4656.17). §§ CLR, "statistically acceptable computing tech- the STEB uses methodology published. See 72 P.S. niques,” must be its 4656.16a(b). regulations, the STEB § to its administrative Pursuant county by using develops each data from transfers the CLR for selling prices, 61 Pa. Code there are bona fide see property in which 603.1, rele- supplemented by independent appraisal data and other information, see, e.g., 61 Pa.Code 603.31. vant

469 percent was within fifteen of the EPR of 100%. The first because, is question implicated although well the STEB- 85.2%, determined CLR is Appellant’s evidence tended assessed, average, show that similar on properties were significantly level. lower outset,

At the the agree while we trial court that this with Uniformity Court has the interpreted precluding Clause as being real from into property divided different classes for assessment, of purposes systemic property tax do not find we general uniformity that this precept any opportuni- eliminates or ty need to consider as a meaningful sub-classifications component of overall of the evaluation uniform treatment Indeed, application taxation scheme. this would represent impermissible departure equal pro- federal jurisprudence, Pennsylvania’s tection which sets floor for uniformity assessment. See 1 Wade J. Newhouse, Constitu- (2d Uniformity 27-28 Equality and tional in State Taxation ed.1984) (describing the “floor” as “a minimum standard fall, states equality below which cannot a minimum standard required by equal protection clause of the Fourteenth Constitution”).9 so, Amendment the federal This since federal clearly contemplates law the seasonable attainment rough equality in treatment among similarly property situated Coal, Allegheny owners. See 488 Pittsburgh U.S. at (stating S.Ct. that “the fairness of one’s allocable share Although Equal has Court indicated that Protection Clause of Uniformity the United States Constitution and the the Penn- Clause of sylvania analyzed coterminously Constitution are as to matters of taxa- tion, 317, 320, Thornburgh, see Leonard v. (1985), equalization States require United Constitution does not (for potential all property example, across of real sub-classifications commercial). Allegheny residential Pittsburgh versus See Coal Co. Va., 336, 344, County, Webster Comm'n West U.S. ("A (1989) S.Ct. 102 L.Ed.2d 688 State divide different assign kinds of into classes and to each class a different long (citing burden so divisions those and burdens reasonable.” Bowers, 522, 526-27, Allied Stores Ohio v. 358 U.S. S.Ct. (1959))). generally 3 L.Ed.2d 480 John Martinez and ("Absent (2004) 4 Local Government 23:10 Libonati, Michael Law contrary, provision legislature state constitutional state has great leeway fashioning among classifications between and various types raising purposes provided revenue that it has not fashion.”). palpably arbitrary invidiously discriminatory acted or only meaningfully total tax burden can evaluated similarly the share of others situated relative

comparison with that the substan concluding to their property holdings” tial, comparable denied property” “relative undervaluation law). petitioners equal protection (2004) (“The Local Taxation Am.Jur.2d State re uniformity in tax assessment constitutional mandate for having in like uniformity quires area.”). in the qualities, characteristics and located same Moreover, equal protection that the federal is well settled systemic discrimina concept proscribing purposeful and/or floor Pennsylvania uniformity jurispru for again, tion— Village even a class of one. Willow pertains See dence— Olech, 1073, 1074, 120 145 brook v. 528 U.S. S.Ct. alia, (2000) (citing, Allegheny Pittsburgh L.Ed.2d 1060 inter 633). Coal, Therefore, 336, 488 U.S. at 109 S.Ct. at while the may certainly seek to achieve overall uniformi Commonwealth among differently to standardize treatment ty attempting owners, its in this do not regard situated efforts similarly situat prevailing requirement shield it deliberately differently by ed treated taxpayers should not authorities.10 Pennsylvania’s statutory scheme for as Significantly, tax directed to the broader suring primarily equalization equalization among properties, all as it establishes plane upon each calculated based applies CLR for 5349(d.l); 61 Pa. §§ market value. See 72 P.S. aggregate Code, obviously yields leeway Ch. 603. This substantial among similarly local officials situ potential discrimination gener in the underrepresented ated owners who in the significance range al both population, given (often in of a “coeffi application averages expressed terms Beattie, 7, 131 dispersion,” cient of see 589 Pa. at n. 7; at 530 n. Bert M. Goodman, Law Assessment & Procedure context, exclusively In this the term "deliberate" does not connote conduct, wrongful any systematic or but includes intentional meth- also Beattie, od laws. Pa. at 907 of enforcement of 589 Commonwealth, (citing A.2d at 523 Fisher Controls Co. v. (1977)). A.2d 1257 381

471 Pennsylvania (2002-2003 ed.)), and the fact that under- in yields diminished representation surveyed population in In re impact averages. on resultant Kents (1961) Inc., Ave., A.2d Atlantic N.J. equaliza limited of an significance average (acknowledging there is a with high dispersion tion ratio where coefficient widely property). assessment ratios classes of varying within Indeed, limitations, theoretically it is more than given such on the of that possible discriminatory treatment order Su disapproved by which was United States expressly Allegheny Properties persist Court in Coal without preme common for testing equaliza remediation if the law procedure in in tion in its as set forth this Court’s decision application, Deitch, Court’s and as elaborated the Commonwealth v. Pa. decision Fosko Board Assessment Appeals, (1994), role as Cmwlth. is removed from its an essential check.11

Moreover, extensively developed by Judge Friedman her dissent Carbon Bd. Assessment Vees (Pa.Cmwlth.2005), Appeals, 867 A.2d scheme statutory internal, issue from an argu- suffers defect systemic which ably regard, renders it unconstitutional on its face. In this that, the statute as a expressly prescribes consequence mere an lodging equaliza- assessment the benefit appeal, lost, tion that required is is statutory otherwise scheme unless and a until deviation criterion that spans thirty- a (Friedman, J., percent met. range is See id. at 750-54 (criticizing 11. Accord Goodman, Assessment Law & Procedure cognize Commonwealth Court's failure in to law Hromisin common raising uniformity challenge, stating: thought scheme for a and “It spelled that when in procedures the court Fosko the rules for out and uniformity challenges system in a workable was established for litigation these cases. itNow must wait for to if the future determine put final uniformity.''); nail has into the tax been coffin of Bright, (criticizing sugges- § 15:12 Hromisin and its Summ Pa. Jur2d Taxation procedure mounting uniformity tion that the law common a chal- foreclosed). lenge might be regard, acknowledged In this it must that a tension between remains analyze which uniformity solely Court's decisions tend to in terms district, single of a classification of all real in a and law, equal protection clearly disparate federal which takes into account comparable properties treatment of within the broader classification. P.J.). noted, Colins, Judge As Friedman joined by dissenting, scheme,12 a board of county’s under the relevant statutory designates year, from time to time a specific commissioners perform county-wide “base in to a year,” known as a which county. of all of real estate in the parcels reassessment year”). § 5342.1 “base In the base (defining 72 P.S. market of all such is ascer- year, fair value Then, EPR each to arrive tained. is to such value applied every property county.13 at the base assessment for year common, its example, To take a but set simple, county value, thus, year base EPR at 100% actual reassess all county year. real in the at its actual value for the base estate thereafter, year Each until the next reassess- county-wide ment, a assessment given property’s may change, value but its static, base ordinarily year remains fixed at its level. (as May applicable 12. The law Veeswas the Act P.L. 571 amended, 5453.101-5453.706), eighth pertaining §§ to 72 P.S. to fourth counties, supplemented by County class the General Assessment provisions substantially to pertinent Law. The of such law similar A and Law at issue Second Class Third Class Assessments 5453.602(a), e.g., § § Compare, here. 72 P.S. 5349. P.S. with county’s intended value EPR is defined as ratio of assessed 5342.1; any given year, to see 72 P.S. market value Bright, 15:5, thus, have appear would to been Summ Pa. Jur.2d Taxation Nevertheless, methodology equalization. conceived as a to advance statutory requires equalization accomplished scheme otherwise to be prior (requiring §§ application of the EPR. See 72 P.S. 5020-402 actual, "selling price, shall be revision estimated or 5348(d) (same). accomplish equalization”), increase or decrease to then, appears justification, provisions With some that the latter have former, and, precedence practice, been over the an EPR afforded represent does a true the ratio of not (and annually vary assessed to market which would value thus fixed, just change where values but assessments remain Armco, ratio, Inc., does the level In re 100 Pa.Cmwlth. common cf. (1986) (“In any equation, maintain change changes, constant when one variable another must result it.”)). Rather, application, the EPR treated as counterbalance merely which is fixed number fractionalizes assessments and generally county-wide pending constant See Good held reassessments. (describing EPR Law & Procedure at 258 the as "an man, Assessment arbitrary government”); selected 27 Summ. Pa. number the Bright, ("It why Pennsylvania § 15:12 is unclear has institution Jur.2d Taxation assessment, appear practice alized since it not the fractional does purpose.”). serve useful discussed, previously As the the CLR for STEB calculates county each on an annual basis from data county-provided the concerning prior year’s arm’s-length transactions. See 4656.16a(a). § P.S. because the as- example, above during sessed-value-to-fair-market-value ratio is 1.0 the base Thereafter, 1.0, 100%, year, year. the CLR is also or for that conditions, under normal economic STEB-calculated CLR tends to diminish each year, reflecting ongoing inflation and See, appreciation. Brewing real estate F & e.g., M Schaeffer v. Lehigh County Appeals, Co. Bd. n. (1992) slow, (showing 3 n. steady, annual diminu- tion in County); City the CLR for Lancaster v. Lehigh Lancaster, 483 n. Pa.Cmwlth. (same (1991) 6n. County). Lancaster

Notably, because between discrepancy present-year dollars, dollars and base-year county when board assess- ment appeals alters the particular value associated with a piece of see property, § 72 P.S. 5347.1 (listing permissible value), bases for a board-initiated alteration assessed board designates new value in terms of base year dollars. 72 P.S. (defining year” 5342.1 “base and stating that shall equalized “[r]eal values within any changes the board of appeals values”); shall be expressed in terms such year base accord 72 P.S. 5020-402 (requiring selling esti- price, actual, or mated “shall be or revision increase decrease to accomplish equalization with other similar proper- district”). within ty example, For if a home lot, on a replaced parcel’s (say) value increase $100,000 $200,000 in present-year dollars due to the new However, construction. the board does not re-assess simply $200,000; tables, charts, rather, using other accepted techniques, board determines what the improved property would have been year-in worth the base $180,000; example, perhaps figure it is this latter $180,000, EPR, multiplied by year the base which becomes the parcel’s assessed present year. new In this because, above, way, uniformity is maintained explained not been altered also whose assessments have properties other base dollars. See according year remain assessed to Lancaster, at 295-96 at 599 A.2d City 143 Pa.Cmwlth. year that uses base market values county that a (holding not, Uniformity the county may the consistent with most of Clause, current market value as utilize a formula based districts taxing only). a selected group to the case arises present illustrated difficulty (such a as the School taxing authority because a within here) scheme, may disrupt equalization premised District it aggrieved feels solely upon a determination as See 72 currently it stands. property’s assessment specific 5349(c). event, the no less long In this so CLR is P.S. EPR, authority able to of the such is percent than 85 to fair market to increase the assessment the force the board taken, see 72 P.S. year appeal the the was value as of 5349(d.l), (d.2), figure, EPR to that merely apply the base-year dollars. Be expressed rather than to a figure cause, however, no corresponding for all other made, only targeted the owners for- adjustment is are burdened with assessments appeal by taxing authority the In present-year to dollars.14 representing applied the EPR words, mere that a based on the fact tax assessment other filed, any equalization the benefit of effort at lost appeal is regard, In this it is relevant range.15 over a thirty-percent ago half nearly century that this Court stated is taxed at whose alone right taxpayer to value is have his assessment cent its true per of that value at which others are percentage reduced departure requirement though taxed even this is Indeed, Appellant’s proper- conceded at trial that 14. the School District targeted past ty only parcel appeal within the two was the that it procedure governing when years, no or criteria and that had written appeal. See N.T. June 31-32. take such fact, percent expressly the EPR is because a CLR of 15 below statute, nearly approved by present-year Here, county. higher average for percent than the STEB-calculated (1.0) higher applied Appellant’s property percent the EPR 17.4 that, (0.852). mathematically, 1.0 than CLR The reason is the relevant percent is 117.4 of 0.852. on principle the statute. conclusion is based Th[is] impossible it is to secure where both standard and the uniformity equality required true value law, just requirement the latter is to be as the preferred purpose and ultimate of the law. Building,

Brooks Pa. at 276 (emphasis added).16 Thus, in use of EPR rather allowing than CLR, has, effect, in General carved out a class Assembly taxpayers subjected of to an bur- unfairly high who those namely, appealed any whose assessment is by den— in taxing district which the is located. this property Because classification is not be- any legitimate based on distinction targeted tween the and arbi- non-targeted properties, it is thus, Leonard, trary, and unconstitutional.17 See Pa. at 507 Coal, 345, Allegheny Pittsburgh 16. Accord at 488 U.S. at 109 S.Ct. 639 (“ systemic by ‘[I]ntentional undervaluation state officials of other tax- property right able same class of contravenes the constitutional ” (citation omitted)); upon one property.’ taxed the full his (“Failing equalize at 257 to on Goodman, Assessment Law & Procedure [new is an by assessments] intentional violation state law local assessing agency Supreme and is in direct violation of the United States Coal."); holding Allegheny Pittsburgh Court Corp. McQuillin Mun (3rd ed.2004) § (observing “taxpayers normally 44.109.10 that have prevailed protection equal they on claims ... when are able to demon- discrimination, systematic pattern strate a where man- as a statute terms”); arbitrary dates and express intentional its discrimination (“Where (2004) 71 Am a revalua- and Jur.2d State Local Taxation formula, tion is to discriminatory shown have been based on a taxpayers required are not to demonstrate the overvaluation of each property prove unjust individual to in the discrimination taxes.”); (2004) ("To property 16C C.J.S. Constitutional Law violation, equal protection necessary establish an not for the officials; taxpayer prove that he was overassessed he instead show his was at assessed its true value while undervalued!.]”). properties intentionally other were 17. The including dissent disassociates itself this discussion— ultimate determination of unconstitutionality primarily facial on based — its Appellant Opin- view that Dissenting has not raised the issue. ion, brief, however, slip op. Appellant at 1-2. its maintains that the requirement uniformity prevails constitutional of tax over the statute's results, process produces mechanical whenever the latter non-uniform 9-10, 16-17, Appellant see Brief Appellant's we and credit Moreover, argument regard. previously recognized in this we Appellant's question constitutionality contention called into of Sec- 8.2(d) Law, tion expressly grant of the Assessments reflected in our Although, supra highlights, order. See note Appellant as the dissent 1352;

321, Harrisburg v. Harris- City 489 A.2d at see also Dist., (1998); A.2d burg School Commonwealth, 468 Pa. Corp. Columbia Gas Transmission (1976). Indeed, unfairness Board acknowledged out of such a scheme is arising noted, which, form of advocates some Appeals, Assessment Appel- as an Appellant, notwithstanding posture relief for its in this lee case. and reaf- procedure

The common described Deitch law Woolworth, 795-96, 426 Pa. at firmed Keebler, premised 436 A.2d at Pa. at uniformity, upon pertaining constitutional to tax constraints methodology to better salutary reflected a assure share, nor his pay no more less than fair taxpayer each would reasonably susceptible the extent that such fair share was jettison liberty We are not at ascertainment.18 statute constitutionally-grounded procedure based among potential which does not account for discrimination comparable systemi- and which owners certain whose tax assess- cally disadvantages property owners subject statutory appeal ments are the procedures. Thus, not although Legisla- do much question we that in the of the assess- improvement ture’s efforts have resulted fairness, in goal furtherance of the of fundamental ment law 15:1 see 27 Summ. Bright, Pa. Jur.2d Taxation (discussing quality prior assessment law and poor advances), agree present cannot that the stat- subsequent we inquiry. serve to foreclose all other ute decision, argument light not in of the Vees Vees has refined its subsequent filing parties' Court. of the briefs in this issued already have the dissent’s other criticism to the effect We answered grant encompass equal the limited in this case did not federal issue, principles protection developed we have federal that the because, uniformity again, they incorporated into state doctrine estab- protections. floor lish the for state constitutional out, Notably, points procedure Appellant law also common taxpayers in devel- took into account the limited resources available to oping unequal evidence of treatment. the common Because the trial court refused to consider law asserting challenge, reverse the procedure uniformity we Court, pleas vacate common order Commonwealth decision, adequacy court’s and remand consideration con- Appellant’s uniformity challenge under the Deitch struct, Fosko, as elaborated in as further reconciled protection equal jurisprudence. with federal CASTILLE, NEWMAN, Justice Justice BAER and Justice join opinion. Justice BALDWIN opinion

Chief CAPPY files a in dissenting Justice which joins. EAKIN Justice CAPPY,

Chief dissenting. Justice

I dissent. respectfully

First, majority’s I from the discussion myself disassociate properties subject up carrying to assessment end appeals majority a heavier burden than other The properties. opinion takes this from the argument dissenting Vees (Pa.Cmwlth. Assessment, Bd. Carbon 867 A.2d 742 Ct.2005). Vees, opinion Judge In her Friedman dissenting expressed methodologies concern that “counties use different properties to value assessments as county-wide opposed majority Id. appeals.” springboards at 750. off of Friedman’s Judge produces dissent Vees argument asserting that used for methodology valuing following an appeal taxing authority filed assessments; in other employed majority differs also states that because of this differing methodology, proper- appeal authority ties which are to an aby taxing filed heavily properties. are taxed more than other M.O. at Legisla- 913 A.2d at 202-05. The that the majority concludes ture has thus “carved effectively taxpayers out a class who subjected are to an those unfairly high namely, tax burden — appealed by any taxing whose assessment district which property is located.” M.O. 913 A.2d at 204-05. finds that is not on majority as “this classification based non- targeted legitimate distinction between any thus, unconstitutional.” arbitrary, it is targeted properties, Id. subject to an regarding properties issue whether

While more is an heavily filed authorities are taxed appeals one, Appellant not interesting by Appellant. it was presented to argument appeals no that properties makes Rather, argu- to its systematically subject higher taxation. Assess- Property revolves around Deitch v. Board ment of ment, Pa. Allegheny County, Review Appeals and of (1965). it has contends since Appellant at a strip that a malls are assessed proven handful other mall, Deitch, then, per strip rate than its own lesser Uniformity property violates Appellant’s I to to speak As this court improper Clause. believe one constitu- parties particularly not raised issue — cannot join majority opinion.1 tional dimension—I Furthermore, my disagreement I to with express write Tax rejection of the method majority’s employed State (“STEB”) com- determining county’s Equalization Board ratio in of the common Deitch method. mon level favor law Deitch method of the common level my opinion, computing the Deitch method unsatisfactory. example, ratio is For taxpayer the common level ratio allows a to adduce computing which are similar only properties evidence relative Clause, however, Uniformity requires he owns. The one all must be taxed at the same rate. See types Taxes Philadelphia, Keebler Co. Board Revision (1981). Pa. A.2d Also, the the scantest of evi- requires only Deitch method Deitch dence to the common level ratio. cited with establish relative adduced evidence approval taxpayer case which county. merely three other similar Deitch, Pa. Building, at 403 Brooks (citing (1958)). A.2d 273 Furthermore, grant encompass a limited did not I note our Thus, equal improper I discuss protection federal issue. believe it federal matter. constitution hand, theOn other method utilized the STEB for computing county’s a common level ratio is quite comprehen- sive. The STEB utilizes the records of all real transfers each given a calendar year, examining both residential and commercial property transfers. It con- only siders arm’s-length sales and it excludes transfers consid- “questionable” ers in an effort to ensure that its statistics are 603.31(b) (d). as accurate possible. 61 Pa.Code STEB also “[periodically ... compare[s selling prices] with market values on the same properties, as appraised by inde- pendent 603.31(e). appraisers when available.” 61 Pa.Code

In my opinion, the STEB’s for computing county’s method common level ratio is more sound than the common law Deitch method. The STEB method at a arrives common level ratio only after considering the bulk of all arm’s-length property sales—whether these sales are of residential or commercial county. method, The Deitch on the other —in hand, permits a landowner establish the common level ratio by looking only to a single class of property; permits also landowner to establish his case via a fairly scant amount of evidence. It apparent that such a methodology would prone to gross distortions. The STEB method of adducing ratio, hand, common level on the other is far likely more arrive an accurate common level ratio as it is a broad ranging study Thus, of a county. contrary position taken by the I majority, believe that reject we should Deitch method of valuation and embrace the STEB’s method of computing the common level ratio.

For the reasons, foregoing I dissent. joins

Justice EAKIN this dissenting opinion.

Case Details

Case Name: Downingtown Area School District v. Chester County Board of Assessment Appeals

Court Name: Supreme Court of Pennsylvania

Date Published: Dec 27, 2006

Citation: 913 A.2d 194

Docket Number: 31 MAP 2004

Court Abbreviation: Pa.