STATE TAX EQUALIZATION BOARD
Objections/Appeal of the School District of Philadelphia and the City of Philadelphia to the Certified 2010 Common Level Ratio for Philadelphia County
[42 Pa.B. 2152]
[Saturday, April 14, 2012]
Memorandum and Order
Acting pursuant to section 16.1 of the State Tax Equalization Board Act (Act), 72 P. S. § 4656.16a, the State Tax Equalization Board (STEB) on August 6, 2011, published in the Pennsylvania Bulletin the certified Common Level Ratios for 2010. See 41 Pa.B. 4280. The certified Common Level Ratio (CLR) established for Philadelphia County was 18.1%. Id.
By letter dated September 30, 2011, the School District of Philadelphia and the City of Philadelphia (collectively, Philadelphia) timely filed with STEB Objections/Appeal to STEB's published 2010 CLR. Philadelphia's objections/appeal were lodged pursuant to section 16.1(c) of the Act. 72 P. S. § 4656.16a(c) (''Any political subdivision or taxpayer aggrieved by any finding, conclusion or any method or technique of [STEB] made pursuant to this section may, in writing, state objections thereto . . . .''). In its objections/appeal, Philadelphia asked STEB for the opportunity to revise its CLR based on the ongoing efforts of Philadelphia's newly formed Office of Property Assessment (OPA) to refine its data gathering, coding and analysis so that OPA might then be able to submit to STEB revised 2010 information that would ''present a more complete and accurate picture of real property values'' in Philadelphia.
After extensive work with STEB staff, OPA on December 28, 2011, submitted to STEB a second data set file containing 9,492 sales that OPA determined to be valid sales for the purpose of calculating CLR. Based on this second data set, STEB staff estimated that the revised CLR would be 25.5%. STEB staff also determined that this second data set appears to comply with STEB requirements and that a new CLR for Philadelphia should be set based on this submission.
However, on January 13, 2012, Philadelphia asked STEB to consider a third data set. As part of its submission of the third data set, OPA explained that it had adjusted its certified market values so as to correct for the skewing effect that it says Philadelphia Code § 19-1308 has on actual market values. This adjustment is necessary, OPA explained, Because STEB's methodology for calculating a county's CLR assumes that the county has reported to STEV its actual market values. Because Philadelphia Code § 19-1308 artificially mandates assessed values that do not reflect actual market values as required by STEB, OPA asserts that an adjustment is necessary so that actual market values can be reported. Only with the adjustments made in its January 13, 2012, submission would Philadelphia be able to report to STEB actual market values—as all other counties in the Commonwealth report to STEB and the STEB expects counties to report as part of STEB's uniform data collection and CLR calculation methodology.
In addition, Philadelphia in its January 13, 2012, submission asked STEB to adjust its uniform methodology for the calculation of CLRs to ''reflect legitimate, arms-length sales even though they do not fall within the parameters of STEB's automated formula for the calculation of CLRs.''
In accordance with the Act, STEB conducted a hearing on March 23, 2012, at which Philadelphia made a presentation in support of its third data set submission and asked STEB to revise its CLR based on this submission. In the alternative, Philadelphia asked STEB to accept its second data set and to revise the CLR based on this second data set.
After careful consideration of Philadelphia's submissions and arguments, the Board concludes that the third data set submitted by Philadelphia on or about January 13, 2012, is not valid under the Act. In setting the CLR, STEB may consider only the ''assessed valuations'' that are set ''for county tax purposes.'' See 72 P. S. §§ 4656.7(2), 4656.9(a). The submissions made by OPA in its third data set do not comport with the requirements of the Act and, therefore, cannot be accepted.
In addition, STEB cannot properly adjust the formula that it uniformly applies for the calculation of the CLR in all 67 counties. The formula that STEB uniformly employs is based on statistically acceptable techniques, as required by the Act. See 72 P. S. § 4656.16a(b). Consequently, the established uniform formula must be used to calculate Philadelphia's CLR.
For the reasons set forth in the Memorandum, it is hereby Ordered that the objections made by the School district of Philadelphia and the City of Philadelphia to the 2010 Common Level Ratio of 18.1% established by the State Tax Equalization Board and published in the Pennsylvania Bulletin on August 6, 2011, are Sustained in part and Overruled in part.
The objections are Sustained based on the revised data submitted to STEB on December 28, 2011, that STEB staff has recommended be used for the calculation of Philadelphia's CLR. Thus, the 18.1% CLR is hereby vacated.
The objections are Overruled to the extent that Philadelphia requests STEB to accept the third data set submitted on January 13, 2012, or to depart from STEB's established formula used for the calculation of the CLR.
Therefore, STEB staff is directed to calculate a new CLR for Philadelphia based on the second data set submitted on December 28, 2011, and accordingly to issue a new 2010 Common Level Ratio forthwith.
JAMES A. ZURICK,
2010 COMMON LEVEL RATIOS
County CLR ^Adams 26.2% *Allegheny 85.8% Armstrong 37.8% Beaver 32.7% *Bedford 78.4% *Berks 73.2% *Blair 15.0% Bradford 33.5% *Bucks 11.3% *Butler 19.1% *Cambria 33.4% Cameron 41.0% Carbon 42.9% Centre 28.1% *Chester 56.0% Clarion 29.6% Clearfield 20.2% *Clinton 98.9% Columbia 26.4% Crawford 37.3% *Cumberland 79.2% *Dauphin 73.5% *Delaware 67.5% Elk 42.4% *Erie 84.4% *Fayette 82.7% Forest 26.8% *Franklin 13.1% *Fulton 35.1% *Greene 83.3% Huntingdon 13.9% *Indiana 19.2% *Jefferson 54.1% *Juniata 21.1% *Lackawanna 18.2% *Lancaster 76.5% *Lawrence 95.6% *Lebanon 15.8% Lehigh 35.7% *Luzerne 100.4% *Lycoming 82.9% *McKean 86.4% *Mercer 34.6% Mifflin 52.3% Monroe 16.8% *Montgomery 58.0% *Montour 81.4% Northampton 33.6% *Northumberland 27.6% *Perry 74.0% **Philadelphia 25.2% Pike 21.4% *Potter 31.2% Schuylkill 47.3% *Snyder 18.0% Somerset 39.9% *Sullivan 69.6% Susquehanna 35.4% *Tioga 73.8% *Union 77.8% *Venango 90.4% Warren 34.6% Washington 21.3% *Wayne 80.0% *Westmoreland 23.8% Wyoming 19.7% *York 83.7% ^ partial sales data for the year
*Counties with a predetermined assessment ratio of 100%
[Pa.B. Doc. No. 12-722. Filed for public inspection April 13, 2012, 9:00 a.m.]
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