Court Opinion

ID: 9651140
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:08:50.9531+00
Date Added: 2024-06-11T18:12:30.600739
License: Public Domain

DISSENTING OPINION BY
Judge FRIEDMAN.
I respectfully dissent. The majority holds that the Carbon County (County) Board of Assessment Appeals’ (Board) reassessment of eighty-five acres of unimproved land (Property) owned by Raymond R. Vees and Kathleen A. Vees (collectively, Taxpayers) does not violate the uniformity clause of the Pennsylvania Constitution or the equal protection clause of the United States Constitution. (Majority op. at 749-50.) For the following reasons, I disagree.
Taxpayers paid $170,000 for the Property in 2002, and the Board assessed the Property at $45,000 based on a market value of $90,0001 and an established predetermined ratio (EPR) of 50%. However, on August 14, 2002, the Palmerton Area School District (School District) appealed that assessment. After a hearing on the matter, the Board reassessed the Property at $80,950 based on a market value of $161,900. Taxpayers appealed to the trial court, which held a de novo hearing and also assessed the Property at $80,950. Taxpayers now appeal to this court.
Taxpayers argue that the Board’s reassessment of the Property violates constitutional principles of uniformity and equal protection because the Board utilized a different methodology for its original valuation of the Property than it used for the reassessment following the School District’s appeal.2 There is no question that counties use different methodologies to value properties in county-wide assessments as opposed to assessment appeals. Section 602(a) of The Fourth to Eighth Class County Assessment Law (Law)3 sets forth the methodology which counties must utilize in county-wide assessments, and sections 702 and 704 of the Law set forth a different methodology which boards and courts must utilize in assessment appeals.4 72 P.S. §§ 5453.702, 5453.704.
*751I. The Statute
A.Original Assessment
Section 602(a) of the Law requires that a county value real property according to its “actual value.” 72 P.S. § 5458.602(a). To arrive at the “actual value,” the county may utilize the current market value or base year market value, the latter being the market value determined in the most recent county-wide assessment. If the county chooses to utilize the current market value, the county may consider sale prices in the current taxable year, and if the county chooses to utilize the base year market value, the county may consider sale prices in the base year. However, the sale prices are not controlling; rather, they are “subject to revision by increase or decrease to accomplish equalization with other similar property within the county.” Id. Moreover, the county must consider: (1) the reproduction or replacement cost, as applicable, less depreciation and all forms of obsolescence; (2) comparable sales; and (3) income. Id.
Once the county has determined the “actual value” of the property, the county applies the EPR, not exceeding 75% of “actual value,” to determine the property’s assessed value. Id. A board may change the assessed value only when: (1) a parcel of land is divided and conveyed away in smaller parcels; (2) the economy of the county or any portion thereof has depreciated or appreciated to such extent that real estate values generally in that area are affected; and (3) improvements are made to real property or existing improvements are removed from real property or are.destroyed. Section 602.1 of the Law, added by the Act of January 18, 1952, P.L. (1951) 2138, 72 P.S. § 5453.602a.
B.Reassessment on Appeal
Sections 702 and 704 of the Law require that, in an assessment appeal, the adjudicator: (1) determine the “market value as of the date such appeal was filed before the board”; (2) determine the common level ratio published by the State Tax Equalization Board (STEB) on or before July 1 of the year prior to the tax year being appealed; and (3) apply the EPR to the niarket value unless the EPR varies from the STEB ratio by more than 15%, in which case apply the STEB ratio to the market value. 72 P.S. §§ 5453.702, 5453.704.
C.Three Differences
In other words, although the County may utilize the base year market value in its original valuation of a property, the County never utilizes the base year market value in an assessment appeal. Moreover, although the County may utilize the current market value in the County’s original valuation of a property, the County never utilizes the current market value as of the date of the assessment appeal, which, at the time of the County’s original valuation, is actually the property’s future market value. Finally, although the County utilizes only the EPR in its original valuation of a property, the County may be required to utilize the STEB ratio in an assessment appeal.
II. Case Law
A. Appeal of Armco
In Appeal of Armco, Inc., 100 Pa. Cmwlth. 452, 515 A.2d 326 (1986), appeal *752denied, 516 Pa. 643, 533 A.2d 714 (1987), a trial court utilized a county’s STEB ratios of 23.9% and 26.9% instead of the EPR of 75% to reduce a board’s reassessments on two properties. In doing so, the trial court simply followed section 704 of the Law, which requires that a trial court use the STEB ratio when the EPR varies from the STEB ratio by more than 15%.
The county filed an appeal with this court, arguing that section 704 of the Law is unconstitutional because it results in the discriminatory treatment of taxpayers. The county asserted that section 602 requires one method of assessing real estate, and section 704 requires a different method only as to those taxpayers who appeal. More specifically, the county maintained that, once it adopted the method of applying the EPR to base year market value, the county could not change methods for taxpayers who filed appeals by applying the STEB ratio to the current market value.
An en banc panel of this court rejected the county’s argument. The court explained that section 602 provides an efficient administrative method of assessing real estate by allowing a county to apply the EPR to base year market value. However, the assessment method is imperfect because base year market value may not reflect current year market value. On the other hand, section 704 provides a method for reviewing administrative assessments so that they reflect the reality of appreciation or depreciation in property value. Although section 704 reassessments utilize current market values instead of base year market values, the STEB ratio converts current market values to equivalent base year assessed values. Id. In other words, the constitutional goal is uniform assessed values, and the application of the STEB ratio to current market values under section 704 results in uniform assessed values.5
In Armco, because the EPR varied more than 15% from the STEB ratio, the trial court was • required to apply the STEB ratio to obtain a uniform assessed value. Here, however, the County’s EPR of 50% does not vary by more than 15% from the STEB ratio of 45%. Therefore, the Board and the trial court did not apply the STEB ratio to obtain a uniform assessed value. This means that, while the average property owner in the County is paying taxes based on an assessed value, that is 45% of the market value of the property, Taxpayers must pay taxes based on an assessed value that is 50% of the market value of the Property.
Because Armco requires application of the STEB ratio to ensure the uniformity of assessed values and because the STEB ratio was not applied in this case, I would conclude that the reassessment of Taxpayers’ Property on appeal is in violation of the constitutional requirement for tax uniformity.6
*753B. City of Lancaster
In City of Lancaster v. County of Lancaster, 143 Pa.Cmwlth. 476, 599 A.2d 289 (1991), appeal denied, 530 Pa. 634, 606 A.2d 903 (1992), the county reassessed ten of its sixty taxing districts because they had a common level ratio that was 15% greater than or less than the county’s STEB ratio. In doing so, the county utilized current market values while continuing to utilize base year market values for the other districts.7 This court stated that the statute “does not provide authority for a county that utilizes base year market value to suddenly begin injecting current market value into the formula in a selected group of taxing districts without applying the same methodology to all property in the county.” Id. at 296. This court also concluded that, in utilizing a different method of valuation in the ten districts, the county violated the constitutional requirement for tax uniformity.8 Id.
Although City of Lancaster does not involve the reassessment of properties on appeal, if utilizing base year market values for some properties and current year market values for others violates the constitutional requirement for tax uniformity, it does not matter whether the violation occurs before or after an assessment appeal.9 The use of two different methods creates a lack of uniformity in either case. Thus, although the Law may permit the use of two different valuation methods, the constitution does not.
C. Wilkinsburg School District
In Wilkinsburg School District v. Board of Property Assessment, 797 A.2d 1034 (Pa.Cmwlth.2002), appeal denied, 573 Pa. 681, 822 A.2d 706 (2003), the board resolved that, to remedy any inequities that may have developed over the years, it would freeze assessments unless there were new buildings, construction, improvements or subdivisions on a property. Nevertheless, the board increased the assessed value of a property which had no new buildings, construction, improvements or subdivisions. The property owner filed an appeal with the board, and the board rolled back the assessment. The school district then appealed to the trial court, which, because of the board’s resolution, dismissed the appeal. The school district took a further appeal to this court, which affirmed the trial court.
*754In affirming the trial court, this court recognized that a governmental body must apply the same methodology for valuing real property to all property within its jurisdiction. This court then stated:
Here, the Board stipulated that the event that would trigger a new assessment was a new building, construction, improvements, or subdivisions. There had been no such event that would cause an increase in the property’s value. Any successful appeal by the school district (or any other taxing body) ... for any reason except the three triggering events ivoidd result in a de facto spot assessment.
The school district’s remedy was to attack the legality of the freeze, not to take an action [i.e., file an assessment appeal] that would create a different methodology for one property owner. A tax assessment freeze was in place.... Property tax appeals could commence if the triggering events occurred. Here, none did.[10]
Id. at 1036 (emphases added). Thus, under Wilkinsburg, in an assessment appeal, a board or trial court would violate the constitutional requirement for tax uniformity if the board or trial court were to treat a single taxpayer unlike other similarly situated taxpayers by utilizing a different “methodology” to assess his or her property.11
III. Conclusion
A board violates the constitutional requirement for tax uniformity when it utilizes different methodologies to value property within its jurisdiction. City of Lancaster. This is true whether different methodologies are applied before or after the taking of an assessment appeal. Wil-kinsburg. Although the use of the STEB ratio may result in a uniform assessed value, Annco, the use of the STEB ratio does not cure the lack of uniformity caused by the use of different valuation methods. City of Lancaster.
Here, the County utilized the current market value as of the date of the Board appeal and applied the EPR to assess Taxpayers’ Property. However, the County utilized the base year market value and EPR to assess other properties. I submit that this violates the constitutional requirement for tax uniformity.
Accordingly, I would reverse.
President Judge COLINS joins in this dissent.

. In assessing the Property, the Board apparently used the Property's base year market value, i.e., the market value for the 2001 tax year, the year in which the County last conducted a county-wide reassessment. See section 602(a) of The Fourth to Eighth Class County Assessment Law, Act of May 21, 1943, P.L. 571, as amended, 72 P.S. 5453.602(a).

. The majority does not address whether the Board’s use of a different tax assessment methodology violates the constitutional principles of uniformity and equal protection. However, Taxpayers present this argument in their brief with bold letters and underlining as follows: “[A] governmental body must apply the same methodology for valuing real property to all property within its jurisdiction." (Taxpayer’s brief at 13.) Moreover, Taxpayers then argue that, under Wilkinsburg School District v. Board of Property Assessment, 797 A.2d 1034 (Pa.Cmwlth.2002), appeal denied, 573 Pa. 681, 822 A.2d 706 (2003), "appeals cannot cause a taxpayer to be reevaluated using different methodology than that of the rest of the property on the assessment roll.” (Taxpayer’s brief at 14.) Thus, I question the majority's failure to discuss this issue.

. Act of May 21, 1943, P.L. 571, as amended, 72 P.S. 5453.602(a).

. The majority states repeatedly that Taxpayers have not challenged the constitutionality *751of these statutory provisions. (See Majority op. at 745, 746, 747, 749.) I agree that Taxpayers do not raise a facial challenge to the constitutionality of the provisions. However, having questioned the Board’s use of a different methodology to reassess their Property in the School District’s assessment appeal, Taxpayers clearly challenge the constitutionality of the statutory provisions as applied to them.

. It is clear that the court in Armco was concerned that assessments reflect the reality of property appreciation and depreciation. Obviously, this reality is reflected in the determination of a property's current market value, as opposed to the base year market value, but property appreciation and depreciation is also reflected in the STEB ratio. The STEB common level ratio is based on the bona fide real estate sales in a county for the prior calendar year. Thus, if the bona fide real estate sales in a county for a given year show a 5% increase in property values, the STEB ratio will be 5% less than the ratio for the preceding year.

. In Downingtown Area School District v. Chester County Board of Assessment Appeals, 819 A.2d 615 (Pa.Cmwlth.2003), appeal granted in part, 577 Pa. 420, 846 A.2d 74 (2004), the trial court assessed the taxpayer’s property using the EPR of 100% instead of the STEB ratios of 89.8% and 85.2%. The taxpayer argued that the application of the EPR instead *753of the STEB ratio violated principles of uniformity and equal protection. This court held only that the application of the EPR complied with the statute because it varied from the STEB ratio by less than 15%. This court did not specifically examine whether the 15% variation allowed by the statute satisfies the constitutional requirement for tax uniformity.

. Because the EPR varied by more than 15% from the STEB ratio in the ten taxing districts, these districts were the most non-uniform districts in the county. Moreover, because of the 15% variance, the county would have applied the STEB ratio to the current market value to obtain a uniform assessed value. See Armco.

. Likewise, in City of Harrisburg v. Dauphin County Board of Assessment Appeals, 677 A.2d 350 (Pa.Cmwlth. 1996), appeal denied, 548 Pa. 620, 693 A.2d 590 (1997), the county reassessed rehabilitated properties in the city utilizing current market values while continuing to assess properties which had not been rehabilitated at base year market values. This court held that the reassessments violated the constitutional requirement for tax uniformity. Id.

.In City of Lancaster, the use of the STEB ratio did not cure the lack of uniformity in the valuation method. Although this may seem to conflict with this court's holding in Armco, we note that the focus in Armco was on whether the use of the STEB ratio in an assessment appeal violated the constitutional requirement for tax uniformity. The court did not address whether a different valuation method, by itself, would violate tax uniformity requirements.

. In Millcreek Township School District v. Erie County Board of Assessment Appeals, 737 A.2d 335 (Pa.Cmwlth.1999), appeal denied, 563 Pa. 668, 759 A.2d 389 (2000), this court held that a school district has a statutory right to appeal any tax assessment by which it is aggrieved. Thus, I understand Wilkins-burg to say only that a school district taking an appeal cannot prevail where the board has established certain triggering events for a reassessment, and none of those events has occurred.

. The different ''methodologies” in Wilkins-burg were: (1) freezing an assessment unless a triggering event occurred, which, in effect, means utilizing the methodologies, market values and ratios used in the previous year; and (2) determining the current market value at the time of the appeal to the board and then applying either the EPR or STEB ratio.