For the second year in a row, the Central Bucks School District struck out in its plan to increase revenues by appealing residential and commercial property tax assessments.
Last year, it was the Bucks County Board of Assessment appeals that denied the district’s request to increase the assessments on about 130 properties because it did not provide enough evidence they were assessed below market value.
This year, it was a tight deadline combined with a software glitch by a third-party vendor that cost the district a chance at about $1 million in much-needed tax revenue.
Now, it will be almost two years before the district could see any additional revenue from property tax appeals.
“We learned some lessons,” said school district business manager Dave Matyas.
A property’s assessment is used to determine school district, county and municipal tax bills.
The assessed value is multiplied by the millage rate to calculate the amount of tax due. For example, the owner of a property assessed at the district average of $40,000 pays $4,832 a year in school tax. ($40,000 times 120.8 mills).
Earlier this year, the district hired the Residential Tax Assessment Analysis Group to conduct an appraisal of all 35,000 tax parcels in the district to determine their market value, and to use the annual common-level ratio set by the State Tax Equalization Board to see which were out of line. The common-level ratio multiplied by the assessment should be close to a property’s market value.
The STEB missed its July 1 deadline for issuing the common-level ratio by three weeks, which gave the consultant and the district only a few days to compile their report before the county deadline for appeals.
Last month, that would yield at least an additional $500 each in annual revenue. Including filing and legal fees and other expenses, it would cost the district about $225 to file each appeal, said Matyas.
Matyas said they did come up with a list of 750 properties that appear to be under-assessed. But when it came time to transfer the data to the county application form, the computer software had a problem matching zip codes with municipalities, said Matyas. For example, it couldn’t process the fact that a property with a Doylestown Township zip code was actually located in Buckingham, he said.
The district could have completed a handful of appeal forms manually before the August 1 deadline but that would not have been fair or cost-effective, said Matyas.
Had all the appeals been successful, Matyas estimated the district would have received about $1 million more in revenue starting next July .
Matyas said he was unsure what the district would do next.
Assessment appeals can be filed any time during the year; the August 1 deadline was for the next taxing year. For county and municipal taxes, that’s January 1; for the school district, it’s July 1.
That means the earliest the district could see any additional revenue from assessment appeals would be the summer of 2013.
Over the last few years, the district has lost about $4 million in revenue because property owners have successfully reduced their assessments due to the overall slump in housing prices.
The district hoped to recoup some of those losses by targeting older properties whose values have skyrocketed but whose tax assessments have not gone up since the last countywide reassessment in 1972.
After an appeal is filed, the property owner is notified by the county Board of Assessment Appeals and invited to attend a hearing. Property owners are able to offer evidence to try to persuade the board to deny the district's appeal, said district solicitor Jeff Garton.
Last year, the district tried to appeal the assessments of 130 properties, using sales data to determine market value. The Board of Assessment Appeals rejected each one, saying the district did not provide enough evidence.