50 Pa. Commw. 56 | Pa. Commw. Ct. | 1980
Opinion by
Johnstown Associates has appealed from an order of the Court of Common Pleas of Cambria County dismissing its appeal from the assessment of its real estate for local tax purposes by the Cambria County Assessment Board. We affirm.
The assessment at issue is for the year 1977. The Board, using the capitalization of income method, determined the fair market value of the property to be $1,807,910. In the assessment records this figure is broken down into land and building components with market values of $551,453 and $1,256,457, respectively. The Board used the predetermined ratio of assessment to market value established for Cambria County of 35% to arrive at an assessment of $632,770. All of the 1977 figures were not materially different from those of prior years, going back to 1974. Johnstown appealed the assessment.
The relevant statute is The Fourth to Eighth Class County Assessment Law (the Act), Act of May 21, 1943, P.L. 571, as amended, 72 P.S. §5453.101 et seq. The Court of Common Pleas of Allegheny County heard Johnstown’s appeal de novo as Section 704 of.the Act, 72 P.S. §5453.704 requires. The county produced its chief assessor who identified the assessment records of Johnstown’s property which were offered and admitted into evidence. The chief as
Johnstown’s evidence of value consisted of the testimony of an appraiser who thought the market value of the property for assessment purposes should have been arrived at by the following calculations: From information compiled by the Institute of Real Estate Management, a private real estate research enterprise, it is learned with respect to apartment projects located in Region III consisting of Pennsylvania, Maryland, the District of Columbia, West Virginia and Virginia, that on the average the percentage of local taxes to gross income is 10.3%, and that the same percentage of local taxes to gross income for apartment projects nationwide is 12%. Johnstown’s appraiser then says that the average of these two figures, 11.15%, should be multiplied by $331,723, the gross income of Johnstown’s facility, producing $36,-987 as the amount of local taxes Johnstown should be required to pay if it is to be treated in this respect uniformly with apartment projects in Region III and nationwide. To produce the amount of $36,987 in local taxes on Johnstown’s property at prevailing local tax rates, Johnstown continues, its assessment must be $306,075. Applying Cambria County’s predetermined 35% ratio of assessment to actual value to an assessment of $306,075 produces $874,500 as market value.
A further error in Johnstown’s proposal is its assumption that uniformity requires that the local taxes on its apartment project must he in the same proportion to its gross income as the average proportion of such taxes to gross income of apartment projects throughout the nation. We are here concerned with local taxes — the taxes imposed by Cambria County and by the school districts and municipalities located within the county boundaries, each of which is a taxing district. Although local taxes are levied in mills per dollar of the assessments of properties made by the county assessor, the millages and therefore the proportion of the amount of taxes to any other element, including gross income of rental properties, will differ among the districts according to the districts’ needs for revenue. So long as local taxes are imposed uniformly within each taxing district — that is, uniform rates applied to uniform assessments — the constitutional requirement is met. Hence, the proportion of local taxes to gross income of apartment projects in Region III or nationwide constituted no standard of uniformity requiring Johnstown’s property to he assessed at a figure which would provide the same proportion of taxes to gross income for its property. In short, the amount of local taxes are no indication of market value, standing alone or as a proportion of gross income.
Johnstown’s theory seems to be based on the further assumption that apartment projects generally, and federally funded apartment projects particularly, constitute classes of real estate which must be valued
Johnstown presents several other questions which we find also to be without merit and which we will dispose of briefly. It says that the county assessment record should not have been considered by the court as establishing the prima facie validity of the assessment because the values of land and buildings are there shown separately. This, it says, shows that the total assessment was arrived at by making separate valuations of the land and buildings and recording their sum as the assessment. Johnstown has over
Johnstown also attacks the qualifications of the county assessor. No objection to the assessor’s testimony was made on the basis of his lack of qualifications at the time of the hearing. His testimony was that he capitalized net income to arrive at the actual value of Johnstown’s project. Surely a county chief assessor, even one not as well qualified as the Cambria County chief assessor appears to have been, is competent to explain how he arrived at his determination of market value.
Johnstown finally complains that Judge Abood’s opinion for the court below demonstrated that he improperly considered the amount of the mortgage on Johnstown’s property and the tax shelter aspects of the project. Judge Abood did mention in passing the size of the mortgage and the tax benefits of the venture to Johnstown’s- investors. At the center of his opinion, however, is the recognition that, as he expressed it, “the law requires . . . the establishment of fair market value for assessment purposes. ” Judge Abood clearly delineated the positions of the parties and properly decided the merits of the case in the county’s favor.
Order affirmed.
Order
And Now, this 12th day of March, 1980, the order of the Court of Common Pleas of Cambria County made May 29,1979 is affirmed.
12 U.S.C. §1715z-l.