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How Local Government Works

Property taxes are the lifeblood of local government, but officials, residents hate to adjust them

by Min Xian of Spotlight PA State College |

How Local Government Works series illustration
Dan Nott / For Spotlight PA

Property taxes are a critical source of revenue for Pennsylvania municipalities and school districts, but political inertia and fear of rising costs can prevent communities from keeping rates updated.

The taxes are determined by assessments, which dictate how much a property is worth and shape how much property owners must pay.

So when assessments are outdated, funding for schools, roads, and other essential services potentially falls short. Local leaders have the ability to adjust taxes and ensure assessments happen regularly, but because such tweaks can raise costs for constituents, the issue is touchy. Some officials have been voted out following changes.

Spotlight PA Local Accountability Reporter Min Xian spoke with a panel of experts about outdated assessments and how they affect Pennsylvanians.

Here are five key takeaways from the panel discussion, which can be viewed in full at spotlightpa.org/events:

Property taxes are the lifeblood of local government.

Property taxes are calculated by multiplying the assessed value of a home or piece of real estate with the tax rates — also known as millages —set by county governments, local municipalities, and school districts.

Each year, those bodies come up with budgets and decide how much revenue they need to provide essential functions like public education, police, and human services. They also set their own tax rates and rely heavily on property tax as a steady source of income.

Outdated assessments flout the tax uniformity rule.

Counties conduct assessments, which serve as the basis for different property taxes levied by various levels of government. The Pennsylvania Constitution requires that taxes be uniform, meaning the tax burden must be equitably shared among residents.

When counties have uneven taxes, they can be taken to court. A 2009 Pennsylvania Supreme Court decision determined that the use of an outdated assessment in Allegheny County to establish the tax liability for a property violates the uniformity clause of the Pennsylvania Constitution. Allegheny underwent a countywide reassessment following the outcome of the case. The next year, the county's overall assessed value increased while tax rates went down.

Counties differ in population, property types, and market values, so the threshold for when a property reassessment is necessary varies geographically, said Lisa Schaefer, executive director for the County Commissioners Association of Pennsylvania.

In a housing market that has remained relatively unchanged, an older assessment does not necessarily mean it’s less fair, she added. Without a mandate for regular assessments, counties make their own decisions about when updates are needed.

Some counties are way behind on updating property values.

Property reassessments are politically unpopular and can cost a lot of money if they haven’t been done in decades.

Lackawanna County commissioners voted in 2022 to reassess properties, something it had not done in 54 years, County Assessor Patrick Tobin said.

The county was facing litigation over outdated property values, and Tobin said that it was “painfully obvious” a reassessment was needed, but the monetary and political costs were steep.

The ongoing reassessment has a price tag of over $5 million.

Tobin argued the decision will pay off over time. “If we wait 54 years again, it's going to cost a hell of a lot more than $5 million. But if we keep up with it, it's going to, in the long run, save taxpayers money,” he said.

The political price of the move has already been paid: The two county commissioners who voted to initiate the revalue were not reelected.

Individual assessment disputes deepen tax disparities.

Counties are the first place property owners go if they dispute the assessed value of their property. Eric Montarti, research director for the Allegheny Institute for Public Policy, estimated that seven to eight thousand appeals take place in Allegheny County each year. Across Pennsylvania, many disputes are decided by the courts.

But individual adjustments don’t address wider uniformity issues. In fact, they can worsen existing disparities. In April, Pittsburgh Public Schools sued Allegheny County to force a countywide reassessment, citing the potential to lose millions in tax revenue over assessment disputes.

The state legislature could step in, but it hasn’t so far.

The possibility of an increased tax bill or a lower home value turns some taxpayers away from embracing assessments, even though they could benefit from higher overall housing value and income in the region. Knowing this, elected leaders tend to shy away from the issue to protect their political careers. State Sen. Wayne Fontana (D. Allegheny) said that’s why he believes lawmakers should mandate reassessments on a scheduled basis and take politics out of the question.

“I still have to go convince everyone in the Senate and the General Assembly to get enough votes,” Fontana said. “It's a long shot.”

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