Your state’s property tax system got a report card. How did it do? (Part 2)

What grade would you give the property tax system in your state?

 In 2019, the Council on State Taxation (COST) and the International Property Tax Institute (IPTI) graded the property tax systems in all 50 U.S. states and select international jurisdictions. This scorecard compares property tax systems based on three broad characteristics - transparency, consistency and procedural fairness in tax appeals. The Scorecard didn’t consider the amount of property taxes (you can breathe a sigh of relief, New Jersey) but rather administrative practice based on the jurisdiction’s laws and regulations.

 On the A-B-C-D-F scale, the highest grade given was a B+, which went to only two U.S. states and three non-U.S. jurisdictions. On the low end, the U.S. had two state systems with an “F”, while the three lowest-ranked non-U.S. systems came in at a C-.

 The Scorecard breaks the general categories into three subcategories with three questions each, for a total of twenty-seven questions for each state. For transparency, the Scorecard examines the availability and clarity of centralized information from the state, notice of assessments and valuation practice. For consistency, the Scorecard questions central oversight of the state system, assessment practices and assessor requirements and training. Finally, the procedural fairness subcategory looks to the initial review, appeals to an independent tribunal and a catchall category for miscellaneous issues. Scores are given a rating of 0 (good), 1 (average) or 2 (poor).

In this post, we’re looking at Pennsylvania. PA has the dubious distinction of being one of the two states to rate an “F” on the COST-IPTI scorecard. Both PA’s Transparency and Procedural Fairness categories rated an “F”; only Consistency was marginally better, with a “D” rating.

For transparency, the Scorecard reports that PA has no centralized website with explanations, laws/regulations or forms. Taxpayers only receive valuation notices if there is an assessment change to their property. Even then, the form and contents of the notice vary by county. 

Procedurally, it’s also a mixed bag. Some counties have an informal review process, but only after assessments have been noticed. Deadlines for appeals after assessments vary, so there may not be enough time to evaluate whether an appeal would benefit the taxpayer. County assessors maintain the property’s record, and there’s no specific requirement for them to justify their assessment. While PA law on the burden of proof in a tax appeal is not as clear as other jurisdictions, it’s generally the taxpayer’s burden to demonstrate the assessment is improper. Unlike some other states, including NJ, there is no specialized court of review for cases appealed from the county boards; they are filed in Commonwealth court, where all government and state agency-related matters are heard. 

I have to guess that the COST-IPSI scorers felt bad for PA, because it probably should have been given and “F” for consistency, too. There is no direct equalization of assessments, no state agency policing county assessors, no required standard forms, no consistent due dates for tax filings or payments, and caps, rates and ratios may apply differently between property types. 

PA’s property tax system is rescued from complete disaster by the fact that they’re comparatively low. While you’d be hard pressed in many NJ towns to find a tax bill below $10,000, that figure would generally be considered shockingly high in much of PA. Still, an overhaul of the PA property tax system to be more modern, accessible and consistent appears to be overdue.  

A full copy of the COST-IPTI Scorcard is available here.