Coatesville Area S.D. v. Chester County Bd. of Assessment Appeals ~ Appeal of: Preserve at Milltown Lantern Owner LLC

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Coatesville Area School District :

:

v. : No. 1313 C.D. 2022

: Argued: December 6, 2023

Chester County Board of Assessment :

Appeals and Preserve at Milltown :

Lantern Owner LLC :

:

Appeal of: Preserve at Milltown :

Lantern Owner LLC :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE ELLEN CEISLER, Judge

HONORABLE LORI A. DUMAS, Judge

HONORABLE STACY WALLACE, Judge

OPINION BY

PRESIDENT JUDGE COHN JUBELIRER FILED: August 15, 2024

This case requires us to consider three questions. First, is a school district’s

use of a facially property-type-neutral monetary threshold in an effort to choose the

most cost-effective properties for tax assessment appeals a per se violation of

article VIII, section 1 of the Pennsylvania Constitution, PA. CONST. art. VIII, § 1

(Uniformity Clause)? Second, did Coatesville Area School District (CASD) violate

the Uniformity Clause through its implementation of a policy containing an

otherwise neutral monetary threshold (Policy) because it resulted in no appeals of

residential properties? And finally, was CASD’s process of selecting properties for

appeal arbitrary? Consistent with this Court’s prior cases, use of monetary

thresholds does not per se violate the Uniformity Clause. Further, discerning no

Uniformity Clause violation in CASD’s implementation of the Policy, we affirm the

Court of Common Pleas of Chester County’s (common pleas) Order granting

CASD’s tax assessment appeal.

I. BACKGROUND

The Preserve at Milltown Lantern Owner LLC (Taxpayer) owns an apartment

complex located in Caln Township, Chester County, known as the Preserve at

Milltown (Property). (Common pleas’ opinion issued pursuant to Pennsylvania Rule

of Appellate Procedure 1925(a), Pa.R.A.P. 1925(a) (common pleas’ op.) at 1.)1

CASD initiated a tax assessment appeal of the Property, and the Chester County

Board of Assessment Appeals (Board) denied the appeal, issuing a Notice of No

Change in Assessment to Taxpayer on October 18, 2019. (Reproduced Record

(R.R.) at 12a.) CASD appealed the Board’s decision to common pleas, asserting

that the Property’s approximately $8 million assessed value was too low. (Id. at 13a-

14a.) In its answer and new matter, Taxpayer argued that CASD’s appeal of the

Property’s assessed value violated the Uniformity Clause. (Common pleas’ op. at

1-2.) Common pleas held a de novo trial on October 13, 2022. (Id. at 2.) Notably,

the valuation of the Property was not at issue, as the parties stipulated to the

Property’s fair market value and assessed value, which for 2020 were $49,500,000

and $24,403,500, respectively. (R.R. at 25a.)2

1

Common pleas’ Pa.R.A.P. 1925(a) opinion can be found at page 416a of the Reproduced

Record.

2

Counties using the base-year method compute property tax as follows. First, in a

countywide reassessment year, the property is assigned its fair market value. Then, to reach the

assessed value of the property, the fair market value is multiplied by the predetermined ratio.

(Footnote continued on next page…)

2

A. Proceedings Before Common Pleas

Taxpayer first called Charles Linderman as on cross-examination. Linderman

testified that he began working for Great Valley School District (Great Valley) in

1981, where he worked for 38 years, and from which he retired in 2019. (R.R. at

34a.) For the majority of his career, he served as a school district business

administrator, and, in that capacity, he initiated tax assessment appeals. (Id. at 35a.)

From March through July 2019, he served as acting business manager, or consultant,

to CASD. (Id. at 36a.) He presented the idea of CASD initiating its own assessment

appeals, as CASD had never done so before. (Id. at 38a.) The purpose of the tax

assessment appeals was to generate revenue. (Id. at 39a.) Linderman testified that

he presented the idea of a tax assessment appeal program involving a monetary

threshold to the school board in April 2019. (Id. at 40a.) He acknowledged that the

idea of a $10,000 monetary threshold derived from the notion that the program

Section 8842(a) of the Consolidated County Assessment Law (Law), 53 Pa.C.S. § 8842(a). The

assessed value is multiplied by the county’s millage rate to determine amount due.

Under a base[-]year system of valuation, a county performs a countywide

reassessment of all real property in the base year, and then uses each property’s

base[-]year assessment as that property’s basis for taxation in the base year, as well

as its basis (i.e., assessed value) in subsequent years. . . . In the base year, a

property’s assessed value may be 100% of its actual value, and thus, assessments

of all real estate in the county are based on actual, fair market value for the base

year. Each year thereafter, however, a given property’s market value may change,

but its assessment ordinarily remains static, fixed at its base[-]year level until the

next countywide reassessment. . . . This is so because a county utilizing a base[-

]year method of valuation typically does not consider market fluctuations

subsequent to the base year when assessing “current value,” or factor in variables

such as improvements to a property that may increase its assessed value. If a

building is constructed on a lot that was vacant during the base year, the property’s

assessed value is determined by using either sales of comparable properties in the

base year or base[-]year construction schedules.

Clifton v. Allegheny County, 969 A.2d 1197, 1203 (Pa. 2009) (footnote and citations omitted).

3

needed to be manageable with respect to attorney and consultant time; the monetary

threshold would ensure selection of only those properties for appeal that would be

worth CASD’s time and money. (Id. at 41a-42a.) He also testified that CASD did

not have the “bandwidth” to appeal every assessment that would generate $10,000

in revenue. (Id. at 42a.) Linderman noted that “fiscal responsibility” required

“cost[-]benefit analysis.” (Id. at 42a-43a.)

Linderman testified that he selected a monetary threshold of $10,000 based

on his prior experience working with Great Valley, which he testified also had a

limitation of 10-15 properties. (Id. at 43a-44a.) Linderman testified that he told the

CASD school board that the assessment appeals would only impact commercial and

high-end residential properties. (Id. at 46a-47a.) He also testified that the list of

properties he forwarded to the superintendent for consideration in June 2019 were

all commercial properties. (Id. at 63a-64a.) He acknowledged that he had described

certain types of properties, like convenience stores, as “low hanging fruit” for

assessment appeal purposes because they were, in his experience, underassessed.

(Id. at 66a.)

Linderman and Taxpayer’s attorney had the following exchange:

Q: . . . . Other than a school district[-]initiated tax assessment appeal,

there[ are] other ways to raise revenue, correct?

A: Correct.

Q: There could have been a county[]wide reassessment, right? . . .

A: Yeah, and it might snow tomorrow, but, yes.

Q: Understood. I think we talked about it being a great equalizer. It

could actually snow tomorrow. It’s pretty cold out there. The

county[]wide reassessments . . . would be the great equalizer, right?

A: It usually is for a couple years.

Q: . . . . [T]he last [reassessment] was in 1998; is that fair?

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A: I believe they valued everything in ’96 and it became effective in

’98.

Q: We talked a little bit in your deposition about why it wasn’t done

more frequently, and I believe you told me there’s some politics

involved, fair?

A: That’s absolutely fair.

(Id. at 69a-70a.)

Also admitted into evidence and played for the court were videos and

transcripts of Linderman’s comments on two occasions before CASD’s school

board, once on May 14, 2019, and the other on June 15, 2019. (Id. at 56a-57a, 62a,

246a-48a.) At the May 14 meeting, Linderman explained:

You have to do residential along with commercial[;] there was a case

called Valley Forge [Towers Apartments N, LP v. Upper Merion

Area School District, 163 A.3d 962 (Pa. 2017) (Valley Forge

Towers),] [] not too long ago that require[s] it, but you’re really going

to be looking at the very high[-]end residential, not the low end, it’ll

be . . . most people that you’re talking about will not even have to

think about it.

(Id. at 246a.) He explained that practically, “a $10,000 increase . . . to your property

tax” means that “if you’re paying $4,000 now, that’s a lot of money to pay, we have

to say that your tax bill should be $14,000.” (Id.) At the June 15 meeting, Linderman

reiterated that the Policy would cause CASD “to be looking at the larger,

commercial[,] and very large residential properties.” (Id. at 248a.)

Taxpayer then called Reaves Lukens, who confirmed that he served as a

consultant to the school district in 2019. (Id. at 72a-73a.) Lukens testified that he

complied with the $10,000 monetary threshold in identifying properties, and that he

ultimately generated a list of 16 properties for appeal. (Id. at 73a, 77a.) Lukens

responded in the affirmative to the following question from Taxpayer’s attorney

regarding the fact that he provided a list of 16, rather than 10-15 properties, to

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CASD: “[i]n your words, your rational[e] was it’s like a deli, give a customer a

pickle, right?” (Id. at 78a.) Lukens agreed that the first step of the process was “to

prepare a median sales price analysis for groups of recent sales of non-residential

properties in the county[.]” (Id. at 80a.) Then, he grouped them by their land use

codes and calculated median sales prices for each land use group. (Id.) Lukens

confirmed that the next step is to “look[] for a potential increase in market value that

would potentially hit the threshold for each of those properties, using that

analysis[.]” (Id. at 83a.)

Lukens confirmed that the second step of the analysis involved sorting based

on various other characteristics. (Id. at 85a-86a.) He also confirmed that on the

spreadsheet there was a tab, the purpose of which was “to calculate the market value

increase necessary for a property to hit the $10,000 threshold.” (Id. at 86a.) That

tab included 141 properties that met or exceeded the threshold, (id. at 93a), and from

there, Lukens “performed a more in-depth review of some of th[ose] properties[,]”

(id. at 94a). Lukens referred to the forum for culling the list of 141 down to the final

list as a “conference table session,” in which the team reviewed the properties by

looking at online resources and photographs. (Id.) Lukens confirmed that he did

not review “all of the 141 properties” from that list. (Id. at 94a-95a.)

Lukens testified that he “didn’t go deliberately looking for Wawas[] [and]

pharmacies” but rather “net leased properties” because they “don’t fit into the county

system very well [which has] historically missed the net lease real estate.”3 (Id. at

97a.) Lukens could not recall exactly what he did to review residential properties.

(Id. at 98a.) He testified that generally, he would look at a multiple listing service

(MLS) for recent sales to identify residential properties that may be underassessed.

3

A net lease is “[a] lease in which the lessee pays rent plus property expenses (such as

taxes and insurance).” Lease, BLACK’S LAW DICTIONARY (11th ed. 2019).

6

(Id. at 100a-01a.) Further, he noted that Act 3194 “Clean and Green” properties were

generally excluded because they would not generate sufficient revenue. (Id. at 100a,

103a.)

On cross-examination, Lukens explained that he did look at both residential

and commercial properties because he “understood the rules of the road in

assessment appeal[s] for school districts was that you consider all types of

properties.” (Id. at 112a.) He explained the process in more detail with respect to

residential properties, noting that he started with the MLS.

I sat down at the computer. I would have selected [CASD]. I would

have selected a period of time, probably three to five years. I would

have checked the boxes sold, listed, I probably would have selected

under contract, various ones that seem relevant. I set a floor of, I think

it was probably like $450,000 maybe $425,000, which basically said

that the property had to have a value of 425 and an assessment of 0 to

potentially meet the [] [P]olicy. It then dropped a list of properties

down, and I would go through them and mostly it was look at the sale

price, look at the assessment. At the time it was roughly a 50 percent

ratio. I’m not a math guy . . . but I can times two in my head, see if it

had merit. If it did, I made a note of it, clicked it, onto the next one,

and then I went through the entire list. I suspect there were [Act] 319

properties that I had to double-check, and then that was the extent of

the process really.

4

Act of December 19, 1974, P.L. 973, No. 319, as amended, 72 P.S. §§ 5490.1-5490.13.

Act 319 is also known as the Pennsylvania Farmland and Forest Land Assessment Act of 1974.

According to the Pennsylvania Department of Agriculture,

Clean and Green is a preferential tax assessment program[] that bases property

taxes on use values rather than fair market values. This ordinarily results in a tax

savings for landowners. The Pennsylvania General Assembly enacted the program

in 1974 as a tool to encourage protection of the Commonwealth’s valuable

farmland, forestland and open spaces. Currently, more than 9.3 million acres are

enrolled statewide.

Pa. Dep’t of Agriculture, Clean & Green, https://pa.gov/en/agencies/pda/plants-land-

water/farmland-preservation/clean-and-green.html (last accessed August 14, 2024).

7

(Id. at 112a-13a.) Lukens expressed that it was impractical to employ the same

methodology for residential properties as commercial properties. (Id. at 113a-14a.)

Common pleas next accepted Peter Angelides, Ph.D. (Dr. Angelides) as an

expert in economics and statistics. (Id. at 127a.) He holds a Ph.D. in economics, as

well as a master’s degree in urban planning. (Id. at 119a.) Dr. Angelides testified

that there are 23,793 properties in CASD, of which 19,524 were single-family

residential properties in 2020. (Id. at 130a.) He concluded “that the $10,000

threshold is high enough that it effectively precludes the ability to appeal single-

family properties.” (Id. at 131a.) He agreed that approximately 82% of properties

in CASD are residential, whereas only about 3% were apartments or commercial

properties. (Id. at 135a-36a.) “The conclusion [is] that [CASD] disproportionately

appealed commercial properties, whether you count by number of properties or by

assessed value.” (Id. at 136a.) He testified that CASD appealed 0% of residential,

5.6% of apartments, and 1.9% of other commercial. (Id. at 137a.) “[T]he $10,000

threshold effectively eliminates the potential to appeal single-family properties”

because “very few, if any . . . single-family residential properties will qualify for

appeal under the [P]olicy.” (Id. at 137a-38a.) Dr. Angelides calculated that in order

to meet the threshold in Caln Township, where the Property is located, the assessed

value would have to increase by $214,460, which translates to a $435,000 market

value increase. (Id. at 139a.)

According to Dr. Angelides, the residential property that came closest to

satisfying the threshold would have generated about $7,500 of tax revenue. (Id. at

163a.) He explained that “there is no property identified in which the difference in

property tax revenue satisfies [CASD’s] threshold.” (Id. at 164a.) On cross-

examination, Dr. Angelides acknowledged that the threshold also would eliminate

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some commercial properties from consideration. (Id. at 170a.) He also

acknowledged that he used sales price as a proxy for fair market value, and that he

did not use either the cost approach, the sales comparison approach, or the income

approach to appraise the properties. (Id. at 171a.)

B. Common Pleas’ Opinion

Common pleas found the facts as follows in its Opinion:

By way of background, CASD is centered around the City of

Coatesville. It is, at best, a financially struggling entity. In March[]

2019, CASD hired [] Linderman as its Acting Business Manager. []

Linderman previously served for thirty (30) years as the Business

Manager for Great Valley . . . . He was brought on to assist CASD in

preparing a budget.

Linderman testified at trial that CASD was financially challenged and

needed to find revenue. Linderman was familiar with school district-

initiated appeals from his time at Great Valley . . . . He was unaware

of any CASD-initiated appeals prior to his tenure. After consultation

with the then Superintendent of [CASD], he eventually presented the

idea of district-initiated appeals to CASD’s [s]chool [b]oard.

Linderman testified that he recommended the [s]chool [b]oard consider

a policy that would authorize an assessment appeal of any property so

long as it would be a successful appeal producing at least $10,000 in

revenue. He also advised that another important and practical

consideration for the [s]chool [b]oard with regard to such appeals had

to be CASD’s ability to manage the number of selected appeals. Based

upon his professional experience, he concluded that approximately 10-

15 appeals per year would be “doable” for CASD. According to

Linderman, CASD simply did not have the manpower to appeal every

property.

Around May 10, 2019, CASD developed . . . [the Policy, which it called

the] “District-Initiated Real Estate Tax Assessment Appeals” policy.

The Policy provided authorization for CASD to “file assessment

appeals related to properties within the [CASD] that may be

under[]assessed so as to increase revenue and equity in the management

of the district’s tax base.” ([R.R. at 251a.]) The Policy’s guidelines or

parameters for any appeal was as follows:

9

The identification of potential properties to be subject to a

[CASD]-initiated real estate tax assessment appeal shall be

consistent with the following guidelines.

1. The Director of Business Management may review

recent real estate transactions to identify properties that

may be under[]assessed.

2. The Director of Business Management may consult with

the [CASD] solicitor or an independent

appraisal/consulting firm to identify properties that may be

under[]assessed.

3. The Director of Business [Management] may rely on

guidance from the courts and statutory authorities to

support the identification of properties in which a

[CASD]-initiated assessment appeal may increase

revenues based on reasonable financial consideration,

including, but not limited to the cost to file and litigate the

appeal and the value of the underlying property.

4. The properties recommended to the [school] [b]oard by

the Director of Business Management to be the subject of

a [CASD]-initiated real estate tax assessment appeal shall

be under[]assessed to the extent that the Director of

Business Management, in consultation with the [CASD]

solicitor and independent appraisal/consulting firm,

reasonably believes that the potential increase in total tax

revenue to be collected in the aggregate by all taxing

districts within [CASD] for the year to be appealed

exceeds $10,000 in the event the appeal is successful.

(Id. at [252a.])

In summary, the Policy was a monetary-driven one. It was to be used

to determine whether an appeal would result in enough revenue to make

the litigation process cost effective for CASD. The identification of

properties that might fall within the Policy was left to a professional,

certified appraiser. Linderman testified that he did not otherwise

interact with the consultants regarding which properties would be

recommended for appeal.

On May 14, 2019, Linderman was present at a [s]chool [b]oard

committee meeting at which the Policy was discussed. Linderman

testified he advised adopting a policy that would select properties for

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appeal based upon a monetary threshold. During the meeting,

Linderman answered questions from committee members about the tax

implication for residents. ([Id. at 246a.)] He acknowledged that the

recommended threshold likely would result in appeals of “high-end”

residential and commercial properties. (Id.)[] Thereafter, in July[]

2019, CASD adopted the Policy and approved the initiation of sixteen

(16) tax appeals for properties within CASD, including [] Taxpayer’s

Property. ([Id. at 253a.)]

(Common pleas’ op. at 2-4 (emphasis in original).)

Common pleas found that no Uniformity Clause violation had occurred

because the Policy directs that all properties, regardless of property type, be

considered. Further, common pleas observed that “[o]ther citizens of CASD are

being taxed on the [fair market value] of their property as impacted by the [Common

Level Ratio (]CLR[)].”5 (Common pleas’ November 14, 2022 Decision and Order

(common pleas’ decision and order) at 6.)6 It continued that “[i]f CASD

5

The Law defines CLR as

The ratio of assessed value to current market value used generally in the county and

published by the State Tax Equalization Board [(STEB), established by the STEB

Law, Act of June 27, 1996, P.L. 403, as amended, added by the Act of April 18,

2013, P.L. 4, 71 P.S. §§ 1709.1500 - 1709.1521,] on or before July 1 of the year

prior to the tax year on appeal before the board . . . .

53 Pa.C.S. § 8802. We have explained:

The CLR is calculated for each county on an annual basis by the STEB using data

from all arms-length sales transactions during the relevant period, supplemented by

independent appraisal data and other relevant information. . . . For example, “a

county’s CLR will be 70 if the total assessed value of properties sold in arms-length

sales in a year is 70% of the total market value of the properties” in the county.

GM Berkshire Hills LLC v. Berks Cnty. Bd. of Assessment, 257 A.3d 822, 825 n.4 (Pa. Cmwlth.

2021), aff’d by evenly divided court, 290 A.3d 238 (Pa. 2023). Taxpayers use the CLR “to

demonstrate that [their] property has been over-assessed, as it allows [them] to compare the

assessed-to-market value ratio of [their] property to the average ratio throughout the district.” In

re Sullivan, 37 A.3d 1250, 1255-56 (Pa. Cmwlth. 2012) (citation and quotation marks omitted).

6

Common pleas’ decision and order can be found at page 389a of the Reproduced Record.

11

intentionally allowed this systematic undervaluation to continue, it would be the

rights of all other taxpayers that would have been violated.” (Id. at 7.)

Common pleas cited Valley Forge Towers and GM Berkshire Hills LLC v.

Berks County Board of Assessment, 257 A.3d 822 (Pa. Cmwlth. 2021) (GM

Berkshire Hills I), aff’d by equally divided court, 290 A.3d 238 (Pa. 2023) (GM

Berkshire Hills II). It relied on those cases for the proposition that monetary

thresholds are permissible, so long as on their face, they do not discriminate based

on property type. Turning to Taxpayer’s evidence that the intent and effect of the

Policy was discriminatory against commercial properties, common pleas first noted

that no evidence suggested that a residential property had been identified but

nonetheless not selected over a commercial property. Second, common pleas found

that “there was no credible evidence that the reason or purpose behind the Policy

was discriminatory. To the contrary, the evidence at trial was that CASD, through

Linderman, was looking for avenues to assist CASD with increasing much[-]needed

revenue.” (Common pleas’ decision and order at 10.) Further, common pleas

explained, with respect to the monetary threshold itself, there was no evidence that

it selected the threshold to eliminate certain property types, but rather to “achieve its

revenue goal” with a “cost[-]effective and practical” solution. (Id.) “Stating the

obvious, if costs outpaced potential benefits, CASD’s goal would not be met. There

was a legitimate, non-discriminatory distinction for the properties that fell above and

below the [monetary] threshold.” (Id.) Finally, common pleas rejected any

suggestions that “political motivations led to prohibited disparate treatment of

classes of property.” (Id.) Taxpayer timely appealed to this Court.

On appeal, Taxpayer advances three main arguments, which we have

reordered for ease of disposition: (i) that the monetary threshold aspect of the Policy

12

violates the Uniformity Clause; (ii) that the Policy’s criteria “[i]ntentionally or

[s]pecifically [o]perate to [t]arget [o]nly [c]ommercial [p]roperties for [a]ppeal” in

violation of the Uniformity Clause; and (iii) that CASD applied the Policy in a non-

uniform way, such that it selected properties for appeal in an arbitrary and capricious

manner in violation of the Uniformity Clause. (Taxpayer’s Brief (Br.) at i-ii.)

II. PARTIES’ ARGUMENTS

A. Taxpayer’s Brief

Taxpayer argues that monetary thresholds are per se invalid under the

Uniformity Clause, noting that our “Supreme Court has held that ‘classification

based solely on the quantity or value of the property being taxed’ is ‘arbitrary and

unreasonable, and hence, forbidden’ under the Uniformity Clause.” (Taxpayer’s Br.

at 50 (quoting Nextel Commc’ns of Mid-Atl., Inc. v. Dep’t of Revenue, 171 A.3d 682,

696 (Pa. 2017)).) Taxpayer asserts that our decisions in GM Berkshire Hills I and

Kennett Consolidated School District v. Chester County Board of Assessment

Appeals, 228 A.3d 29 (Pa. Cmwlth. 2020) (Kennett Consolidated), were incorrect

because they misconstrued Valley Forge Towers. Taxpayer notes that our evenly

divided Supreme Court, affirming our decision in GM Berkshire Hills I, did not

reach consensus on whether monetary thresholds pass constitutional muster.

Relatedly, Taxpayer urges us to reject the proposition that there was a cost-benefit

analysis at play in this case because CASD never actually performed such an

analysis; “[s]imply targeting for appeal only high-valued properties guaranteed to

yield a large amount of additional tax is not a ‘cost-benefit analysis.’” (Taxpayer’s

Br. at 41.) Even if such a cost-benefit analysis was permissible under the Uniformity

Clause, Taxpayer suggests that it does not justify discriminatory treatment.

13

Taxpayer next argues that “CASD’s appeal program violated the Uniformity

Clause because its appeal selection criteria intentionally or systematically operate to

target only commercial properties for appeal.” (Id. at 27.) Taxpayer relies on the

opinion in support of reversal (OISR) in GM Berkshire Hills II for the proposition

that “appeal selection criteria cannot be a pretext for targeting or excluding certain

classes of properties from appeal.” (Id.) It points to the fact that CASD did not

appeal any residential properties as evidence that the Policy excludes residential.

Further, it points to Dr. Angelides’ testimony, which “show[s] that commercial

properties were much more likely to meet the threshold.” (Id. at 29.) According to

Taxpayer, common pleas “logically should have made explicit findings of fact about

this relevant, credible, and unrebutted testimony” but “instead simply ignored it,

entirely failing to mention Dr. Angelides or his testimony anywhere in its [d]ecision

or Opinion.” (Id. at 30-31.)

Taxpayer also argues that Linderman’s and Lukens’ testimony confirms that

CASD intended to focus on commercial, and not residential, properties. Further,

Taxpayer argues that “Lukens’ review of residential properties was limited and

perfunctory, at best, showing that he did not expect any residential properties to

reach the threshold.” (Id. at 34.) In addition, Taxpayer argues that CASD school

board members publicly expressed their belief that CASD’s Policy would not result

in appeals from residential assessments. Common pleas’ “conclusions about the

knowledge or intent of CASD regarding the effect of its selection criteria are

unsupported, given that it overlooked the fact that at least one [school] [b]oard

member, on two separate occasions, expressed concerns about the impact of district-

initiated appeals on residential taxpayers.” (Id. at 37.) Taxpayer is of the view that

the school board knew that the Policy would result in no residential appeals, which

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it argues belies common pleas’ “suggestion that CASD must have acted in a neutral

manner because it could not guarantee discriminatory results is entirely unsupported

by the record.” (Id. at 38.) Taxpayer also asserts that common pleas erred in

believing Taxpayer had to show discriminatory intent or purpose, but rather it must

show either discriminatory intent “or that the application of the tax has a

discriminatory effect[.]” (Id. at 39 (quoting Millcreek Twp. Sch. Dist. v. Erie Cnty.

Bd. of Assessment Appeals, 737 A.2d 335, 339 (Pa. Cmwlth. 1999)) (Taxpayer’s

emphasis omitted, emphasis added).)

Taxpayer’s final argument is that CASD’s method of culling the list from 141

properties that met the threshold down to the 16 it ultimately chose was arbitrary.

First, Taxpayer reiterates that limiting the number of appeals absent sufficient cost-

benefit justification was arbitrary. Second, CASD, in Taxpayer’s view, provided no

guidance on how to whittle the list down to that smaller number, and it points to the

fact that 6 properties not on the 141-property list made it onto the final list because

CASD specifically targeted net-lease properties (drug stores and convenience stores)

as “low-hanging fruit.” (Taxpayer’s Br. at 48.)

B. CASD’s Brief

CASD first argues the use of a cost-benefit analysis by a school district in

choosing which property tax assessments to appeal does not violate the Uniformity

Clause. It emphasizes that CASD made a business decision to appeal only those

property tax assessments that would generate sufficient revenue to justify them, and

the Policy allowed it to “judiciously appeal the tax assessments of some of the most

under[]assessed properties in [CASD], without regard to the type of property in

question[.]” (CASD’s Br. at 5.)

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CASD also highlights the Supreme Court’s statement in Valley Forge Towers

that “nothing in this opinion should be construed as suggesting that the use of a

monetary threshold . . . or some other selection criteria would violate uniformity if

it were implemented without regard to the type of property in question or the

residency status of its owner.” Valley Forge Towers, 163 A.3d at 979 (footnote

omitted). CASD also brings to our attention two unreported decisions of this Court:

East Stroudsburg Area School District v. Meadow Lake Plaza, LLC (Pa. Cmwlth.,

No. 371 C.D. 2018, filed October 17, 2019), appeal denied, 231 A.3d 772 (Pa. 2020),

and East Stroudsburg Area School District v. Dallan Acquisitions, LLC (Pa.

Cmwlth., No. 529 C.D. 2018, filed October 17, 2019).7 It argues that under GM

Berkshire Hills I, which remains good law after our Supreme Court’s evenly-divided

affirmance, monetary thresholds are permissible.

CASD emphasizes that here, the stipulation reveals that the Property is

“grossly under[]assessed.” (CASD’s Br. at 16.) It encourages the Court to consider

“[p]resent[-]day economic realities” which “not only explain and justify” CASD’s

use of the Policy, “they actually necessitate the use of a cost[-]benefit analysis by a

taxing district when deciding whether to file an assessment appeal.” (Id. at 17.) It

summarized:

[F]rom a cost-benefit standpoint and in consideration of the real[-

]world litigation risks associated with differing expert opinions and the

potential for the added cost of potential appellate proceedings, [CASD]

acted financially responsibly by electing to exercise its statutory right

to appeal only those properties that made economic sense, and not other

properties that may have been under[]assessed by comparatively

marginal amounts. It would be a violation of the public trust and breach

7

While not binding, unreported opinions of this Court may be cited for their persuasive

authority pursuant to Rule 126(b) of the Pennsylvania Rules of Appellate Procedure, Pa.R.A.P

126(b), and Section 414(a) of our Internal Operating Procedures, 210 Pa. Code § 69.414(a).

16

of [CASD]’s fiduciary duty to not consider and follow some reasonable

guidelines to protect public funds.

(Id. at 17-18 (emphasis in original, footnote omitted).)

CASD asserts that this Court would be reweighing the evidence in violation

of our standard of review if we were to accept Taxpayer’s argument that the Policy

was merely a pretext to discriminate against commercial properties. It explains that

common pleas found that there “was no credible evidence that the reason or purpose

behind the Policy was discriminatory.” (Id. at 19 (quoting common pleas’ op. at

10).) CASD also submits that common pleas specifically credited Linderman’s

testimony regarding the “reasons and basis for his suggested policy.” (Id. at 19-20.)

CASD also argues that we should reject Taxpayer’s approach, as under it, no

economic threshold would be constitutional, contrary to our holdings in Meadow

Lake Plaza, Dallan Acquisitions, and Punxsutawney Area School District v.

Broadwing Timber, LLC (Pa. Cmwlth., No. 1209 C.D. 2018, filed October 29, 2019).

Finally, CASD suggests that Taxpayer’s appeal is really about Taxpayer

evading the payment of its fair share of tax. CASD explains that part of the

“integrity” and “fairness” of the tax system is diminished “[w]hen a property owner

evades or is excused by virtue of underassessment from paying its proportionate

share of the burden for supporting governmental services[.]” (Id. at 23.) CASD

emphasizes that Taxpayer has no right to pay less than its fair share, and that the

Property was grossly underassessed.

C. Taxpayer’s Reply Brief

In its reply brief, Taxpayer reiterates that there is no factual basis for the

proposition that the monetary threshold in this case was the product of any cost-

benefit analysis. Next, it argues that CASD failed to respond to its argument that

17

common pleas erred in requiring some motive or purpose of discrimination on the

part of CASD for a Uniformity Clause violation to result. Taxpayer also argues that

while it is true that this Court is bound by credibility determinations and factual

findings (to the extent they are supported by competent, substantial evidence), we

are not bound by the inferences and deductions derived by common pleas from those

facts. In Taxpayer’s view, CASD failed to also respond to its claim that CASD’s

selection of properties from among eligible properties was arbitrary. Finally,

Taxpayer rejects the argument that Taxpayer is somehow getting away with not

paying its fair share where it concedes the underassessment of the Property because

Taxpayer is “hardly paying [its] ‘fair share’ when other taxpayers have been left

alone to continue paying taxes on their underassessed properties.” (Taxpayer’s

Reply Br. at 8-9.)

III. DISCUSSION8

A. Monetary Thresholds and Cost-Benefit Analysis

Our logical starting place is determining whether, as Taxpayer suggests,

monetary thresholds are per se invalid under the Uniformity Clause. Because it is

related, we also address whether common pleas erred in finding that the monetary

8

Where a common pleas court takes additional evidence in its de novo review of a tax

assessment appeal case, this Court’s review is limited to whether the common pleas court abused

its discretion, committed an error of law, or made findings unsupported by substantial evidence.

Sher v. Berks Cnty. Bd. of Assessment Appeals, 940 A.2d 629, 632 n.4 (Pa. Cmwlth. 2008).

“Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion.” Norwegian Township v. Schuylkill Cnty. Bd. of Assessment Appeals, 74

A.3d 1124, 1128 n.3 (Pa. Cmwlth. 2013). The common pleas court, sitting as factfinder,

“maintains exclusive province over matters involving the credibility of witnesses and the weight

afforded to the evidence. [] As a result, this Court is prohibited from making contrary credibility

determinations or reweighing the evidence . . . .” In re Penn-Delco Sch. Dist., 903 A.2d 600, 608

(Pa. Cmwlth. 2006).

18

threshold at issue in this case was the product of a bona fide cost-benefit analysis.

But first, we survey the legal landscape surrounding this case more generally.

1. Applicable Law

Pennsylvania school districts rely heavily on property tax revenue to carry out

their missions. See William Penn Sch. Dist. v. Pa. Dep’t of Educ., 294 A.3d 537,

909 (Pa. Cmwlth. 2023) (Cohn Jubelirer, P.J.) (single-judge op.)9 (“[T]he fact

remains that public schools are heavily reliant on local funding. While

approximately one-third of school funding revenue comes from the state, more than

half generally comes from local sources, primarily in the form of local property

taxes.”). Clearly, then, school districts have an interest in ensuring that properties

are assessed accurately because, to state the obvious, the higher the assessment, the

greater the revenue to the school district. Recognizing that interest, the General

Assembly has provided a mechanism for school districts to appeal assessments.

Section 8855 of the Consolidated County Assessment Law (Law) provides that

[a] taxing district[10] shall have the right to appeal any assessment within

its jurisdiction in the same manner, subject to the same procedure and

with like effect as if the appeal were taken by a taxable person with

respect to the assessment, and, in addition, may take an appeal from any

decision of the board [of assessment appeals] or court of common pleas

as though it had been a party to the proceedings before the board or

court even though it was not a party in fact. . . .

9

This Court’s Internal Operating Procedures provide that “[e]xcept as provided in

subsection (d) (relating to single-Judge opinion in election law matters), a single-Judge opinion of

this Court, even if reported, shall be cited only for its persuasive value and not as a binding

precedent.” 210 Pa. Code § 69.414(b).

10

Section 8855 refers to taxing districts, which the Law defines to include “[a] county,

city, borough, incorporated town, township, school district or county institution district.” 53

Pa.C.S. § 8802.

19

53 Pa.C.S. § 8855. While the Law does not prescribe a precise methodology for a

school district to employ in appealing assessments, our Supreme Court has made

clear that school districts must exercise the discretion afforded by Section 8855

within “constitutional boundaries.” Valley Forge Towers, 163 A.3d at 980.

The relevant constitutional boundary in this case is, of course, the Uniformity

Clause, the operative language of which has remained unchanged since becoming

part of our Constitution in 1874,11 and which provides that “[a]ll taxes shall be

uniform, upon the same class of subjects, within the territorial limits of the authority

levying the tax, and shall be levied and collected under general laws.” PA. CONST.

art. VIII, § 1. As our Supreme Court has explained,

[t]he Uniformity Clause is a product of the Gilded Age, drafted in the

late nineteenth century, an era of “robber barons” and rapid economic

growth. This Court long has recognized that the Constitution of 1874

sought “to correct the evil of unwise, improvident and corrupt

legislation which had become rampant at the time of its passage.”

Consumer Party of [Pa]. v. Commonwealth, . . . 507 A.2d 323, 333

([Pa.] 1986), abrogated on other grounds by Pennsylvanians Against

Gambling Expansion Fund, Inc. v. Commonwealth, . . . 877 A.2d 383

([Pa.] 2005); see Perkins v. City of Phila[delphia], . . . 27 A. 356, 360

([Pa.] 1893) (“It is certainly not forgotten that the well-nigh unanimous

demand which brought the convention of 1873 into existence was

prompted by the evils springing from local and special legislation.”).

With regard to taxation, “[t]he burden of maintaining the state had been,

in repeated instances, lifted from the shoulders of favored classes, and

thrown upon the remainder of the community.” Fox’s Appeal, . . . 4 A.

149, 153 ([Pa.] 1886). The Uniformity Clause sought to eradicate

inequitable fiscal policies that had resulted from parliamentary

favoritism and class legislation. Id. One commentator offered the

following account of the circumstances that precipitated the 1873

constitutional convention:

11

“[T]he general text of the [U]niformity [C]lause has remained unchanged since

enactment.” Kristin E. Hickman (Note), The More Things Change, The More They Stay the Same:

Interpreting the Pennsylvania Uniformity Clause, 62 ALB. L. REV. 1695, 1699 (1999) (examining

the role of federal equal protection jurisprudence in the interpretation of the Uniformity Clause).

20

The Pennsylvania Constitution of 1874 . . . was drafted in

an atmosphere of extreme distrust of the legislative body

and of fear of the growing power of corporations,

especially the great railroad corporations. It was the

product of a convention whose prevailing mood was one

of reform . . . and, overshadowing all else, reform of

legislation to eliminate the evil practices that had crept into

the legislative process. Legislative reform was truly the

dominant motif of the convention and that purpose is

woven into the very fabric of the constitution.

ROSALIND L. BRANNING, PENNSYLVANIA CONSTITUTIONAL

DEVELOPMENT 37 (1960).

Mount Airy #1, LLC v. Pa. Dep’t of Revenue, 154 A.3d 268, 273 (Pa. 2016).

In the real estate tax context, it is well established that “real estate as a subject

for taxation may not be validly divided into different classes.” In re Lower Merion

Township, 233 A.2d 273, 276 (Pa. 1967) (emphasis added). Recently, our Supreme

Court has reaffirmed that principle, emphasizing that “real property is the

classification[,]” and, therefore, taxing authorities may not further subclassify real

property into subcategories and treat those categories differently. Clifton

v. Allegheny County, 969 A.2d 1197, 1212 (Pa. 2009) (emphasis in original).12

12

Interestingly, contemporaneously with its adoption, our Supreme Court did permit

reasonable classification and disparate taxation of property based on property type. As the Court

explained,

[i]t is quite true . . . that this Court’s initial interpretation of the [U]niformity

[C]lause permitted division of real estate into different classes. In both Kitty

Roup’s Case, 81 1/2 Pa. 211 (1874)[,] and City of Williamsport v. Brown, 84 Pa.

438 (1877)[,] ordinances taxing rural and urban property at different rates were

sustained. . . . But in 1909 these . . . cases were all implicitly overruled by Mr.

Justice Elkin, writing for the Court in Delaware, Lackawanna & Western

Rail[way] Co[mpany’s] Tax Assessment (No. 1), [] 73 A. 429 ([Pa.] 1909).

Lower Merion Township, 233 A.2d at 276.

21

Those general principles in mind, we turn to the leading case on the matter.

Valley Forge Towers involved a school district’s tax assessment appeal program

“concentrated solely on commercial properties, including apartment complexes.”

163 A.3d at 966 (emphasis added). The appellants, apartment complex owners in

the district, sued, arguing that the selective appeal of their properties violated the

Uniformity Clause. Sustaining the taxpayers’ challenge, the Supreme Court

reiterated the “longstanding principle that ‘a taxpayer is entitled to relief under the

Uniformity Clause where his property is assessed at a higher percentage of fair

market value than other properties throughout the taxing district.’” Id. at 972

(quoting Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals,

913 A.2d 194, 199 (Pa. 2006) (Lionville Assocs.)). That principle derives from the

notion “that taxpayers should pay no more or less than their proportionate share of

government.” Id. (quoting Lionville Assocs., 913 A.2d at 200). Particularly relevant

here, the Court made two points clear.

First, all property in a taxing district is a single class, and, as a

consequence, the Uniformity Clause does not permit the government,

including taxing authorities, to treat different property sub-

classifications in a disparate manner. . . . Second, this prohibition

applies to any intentional or systematic enforcement of the tax laws,

and is not limited solely to wrongful conduct. . . .

Id. at 975 (citations omitted).

The Court rejected the argument that the only recourse available to school

districts was to appeal all property tax assessments, and the related proposition that

an appellant must demand a countywide reassessment or nothing at all. Indeed, the

Court left open the possibility of “other, nondiscriminatory, methods of deciding

which properties to appeal.” Id. at 977.

22

The implications of the constitutional backdrop, the Court observed, were that

“a taxing authority is not permitted to implement a program of only appealing the

assessments of one sub-classification of properties, where that sub-classification is

drawn according to property type—that is, its use as a commercial apartment

complex, single-family residential, industrial, or the like.” Id. at 978. But the Court

clarif[ied] that nothing in [its] opinion should be construed as

suggesting that the use of a monetary threshold—such as the one

challenged in [In re] Springfield [School District, 101 A.3d 835 (Pa.

Cmwlth. 2014)13]—or some other selection criteria would violate

uniformity if it were implemented without regard to the type of property

in question or the residency status of its owner.

Id. at 979 (footnote omitted). According to the Valley Forge Towers Court, the goal

of maximizing revenue must give way to nondiscriminatory implementation of the

taxing system; it observed that “the two objectives do not necessarily conflict.” Id.

at 980.

Post-Valley Forge Towers, this Court has considered the issue of monetary

thresholds several times. In Kennett Consolidated, we emphasized that the Supreme

Court had left open the question whether monetary thresholds violated the

Uniformity Clause. There, we were satisfied that our holding in the unreported

Meadow Lake Plaza was correct, summarizing and incorporating it as follows:

We concluded [in Meadow Lake Plaza] that “nothing in our Supreme

Court’s analysis in Valley Forge [Towers] precludes application of a

reasonable monetary threshold for assessment appeals, based on an

estimate of the minimum potential revenue gain that will make a tax

assessment appeal cost [] effective.” [Meadow Lake Plaza, slip op.] at

11. We also rejected the taxpayer’s argument that, even though the

13

The Springfield Court explained that “[t]he [s]chool [d]istrict’s $500,000 threshold was

based on the reasonable financial and economic considerations of increasing its revenue and the

costs of filing assessment appeals. The $500,000 difference between the sale price and the implied

market value represented $9[,]000 to $11,000 in additional tax revenue, which justified the costs

of appeals.” Springfield, 101 A.3d at 849.

23

policy was facially neutral, it ran afoul of the Uniformity Clause

because only commercial properties had their assessments appealed.

Id. This Court pointed out that the court of common pleas credited the

testimony that the school district searched “for any and all properties”

meeting the $10,000[] threshold, and would have filed an assessment

appeal of a residential property so long as it came within the threshold.

Id. at 12. Moreover, we concluded that the “$10,000 threshold [was]

reasonable and [did] not violate the uniformity requirement of the

Pennsylvania Constitution, despite the fact that in this particular

instance, only commercial properties in the [s]chool [d]istrict met that

threshold.” Id. at 13.

Thus, our decision in [Meadow Lake Plaza] authorized the use of such

thresholds. Our holding in [Meadow Lake Plaza] plainly determined

that, even though a monetary threshold resulted in only commercial

properties having their assessments appealed, such practice did not

violate the Uniformity Clause.

Kennett Consol., 228 A.3d at 41 (some brackets omitted). We concluded, quite

simply, that “monetary thresholds do not violate the Uniformity Clause.” Id. We

emphasized that in that case, the school district “was using a monetary threshold

only for the purpose of making prudent fiscal decisions, and not for the purpose of

discriminating against sub-classes of properties. Because [the d]istrict deliberately

ignored the property type and focused only on its fiscal considerations, [it] did not

violate the Uniformity Clause.” Id. While the Supreme Court initially granted

allocatur in Kennett Consolidated, 240 A.3d 611 (Pa. 2020), after argument, it

dismissed the appeal as improvidently granted, 259 A.3d 890 (Pa. 2021).

Accordingly, Kennett Consolidated remains precedential.

A year after Kennett Consolidated, we decided GM Berkshire Hills I, in which

we reaffirmed the constitutionality of monetary thresholds. There, the owner of two

apartment buildings—which it had purchased for approximately $54 million, and

which had an assessed value of approximately $10 million—appealed from the court

of common pleas’ decision which granted the school district’s assessment appeal.

24

The policy in GM Berkshire Hills I required the school district to pursue appeals

where the difference between the assessed value and the current value (as

documented by a recent sale and multiplied by the CLR) was more than $150,000.

That monetary threshold was based on “a cost-benefit [analysis] at which the

revenue from a successful appeal would justify the cost of the legal and appraisal

fees necessary for the [d]istrict to undertake the appeal.” GM Berkshire Hills I, 257

A.3d at 825. The policy was facially sub-classification neutral, and in effect, it led

to appeals of industrial, farm, commercial, residential, and apartment complexes.

The property at issue there, the district determined, was underassessed by more than

$26 million, such that it satisfied the $150,000 threshold.

We concluded that “[b]ecause the [d]istrict’s method is purely quantitative . . .

beginning with type-neutral listings for recent sales transactions in [] monthly []

reports, we find it does not present the type of constitutional infirmities present in

Valley Forge Towers.” Id. at 834. We recognized that our Supreme Court had put

its imprimatur on the idea that

perfection in property assessment may not be possible and that

uniformity considerations will not be offended by an otherwise

acceptable “salutary methodology to better assure that each taxpayer

would pay no more nor less than his fair share, to the extent that such

fair share [is] reasonably susceptible of ascertainment.”

Id. (quoting Lionville Assocs., 913 A.2d at 205). We described our approach as

“realistic” and “dovetail[ing] with the Court’s recognition that while constitutional

principles are primary, the practical fiscal concerns of a school district still matter

and may not be ignored.” Id. at 834-35 (citation omitted) (emphasis added). And

of course, one of the practical concerns for school districts is “the cost effectiveness

of each assessment appeal it decides to undertake.” Id. at 835. An equally divided

Supreme Court affirmed in GM Berkshire Hills II, and thus, like Kennett

25

Consolidated, our opinion in GM Berkshire Hills I remains good law and binding

precedent of this Court.

2. Analysis

As discussed above, and consistent with our Supreme Court’s reasoning in

Valley Forge Towers, and holdings in Kennett Consolidated and GM Berkshire Hills

I teach that facially property-type-neutral monetary thresholds do not per se run afoul

of the Uniformity Clause. Indeed, we have definitively read “Valley Forge Towers

. . . [as] [impl[ying] that so long as a school district’s selection methods did not

discriminate on the basis of property type, use of a monetary formula would not

amount to a per se constitutional violation.” GM Berkshire Hills I, 257 A.3d at

833 (emphasis added).

We continue to believe our reasoning in Kennett Consolidated, GM Berkshire

Hills I, and Broadwing Timber is correct, and, therefore, we reaffirm the logic of

those cases. First, as a general matter, monetary thresholds represent school

districts’ reliance on the commonsense notion that “the two objectives” of generating

revenue on one hand, and ensuring implementation of a taxing system that operates

in a nondiscriminatory manner on the other, “do not necessarily conflict.” Valley

Forge Towers, 163 A.3d at 980. Indeed, when a school district adopts such a

monetary threshold, it sends the message that no specific property type is the target,

but rather underassessed properties of all types because the school district simply

wants to increase revenue by applying a facially fair and neutral policy.

Further, we continue to recognize that “a reasonable monetary threshold for

assessment appeals, based on an estimate of the minimum potential revenue gain

that will make a tax assessment appeal cost [] effective” is not precluded by Valley

26

Forge Towers, and that “a taxing district’s selection of a property for an assessment

appeal that failed to take into account whether the appeal was likely to be cost-

effective might well be fiscally irresponsible.” GM Berkshire Hills I, 257 A.3d at

834 (emphasis added). This flows from the understanding that it would be

impossible—and not cost effective—for a school district to appeal each

underassessed property, and thus a waste of taxpayer funds for it to spend time and

resources on appeals that would lose the school district money.

At bottom, the General Assembly has given school districts the power to

appeal assessments. 53 Pa.C.S. § 8855. Valley Forge Towers explained that school

districts have tools to appeal property tax assessments short of countywide

reassessments. See Valley Forge Towers, 163 A.3d at 977 (“There are other,

nondiscriminatory, methods of deciding which properties to appeal.”). For that to

mean something, school districts must have a means of designing facially neutral,

quantitatively grounded policies to create predictability and fairness in a taxing

district. Indeed, it seems doubtful that Section 8855 of the Law would be anything

more than a nullity if we were to conclude that no monetary threshold could pass

constitutional muster. What is more, in allowing school districts to appeal property

assessments, the General Assembly necessarily recognized that school boards are

politically accountable. Accordingly, taxpayers in disagreement with a school

board’s approach to assessment appeals can use the political process to advocate for

different methodologies.

Here, Taxpayer relies on the OISR from GM Berkshire Hills II for the

proposition that we have misconstrued Valley Forge Towers in our cases approving

of monetary thresholds. We recognize that when our Supreme Court divides equally

in a case, neither opinion having commanded a majority of the Court, neither

27

opinion becomes precedential. See Commonwealth v. James, 427 A.2d 148, 149

(Pa. 1981) (“no precedent [is] established in an affirmance by an equally divided

court”); Lower Bucks Cnty. Joint Mun. Auth. v. Koszarek, 244 A.3d 54, 65 n.15 (Pa.

Cmwlth. 2020) (same). To the extent this Court may have cast doubt on the

constitutionality of monetary thresholds by quoting the OISR in GM Berkshire

Hills II, such reliance was inconsistent because our Court’s precedents, as of now

undisrupted by the Supreme Court, approve of monetary thresholds. See Sch. Dist.

of Phila. v. Bd. of Revision of Taxes, 303 A.3d 1150, 1164 (Pa. Cmwlth. 2023)

(noting that the potential approval of monetary thresholds was not the holding but

“unfortunate dicta”) (quoting GM Berkshire Hills II, 290 A.3d at 253 (OISR));

Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals, 303 A.3d

1104, 1113 (Pa. Cmwlth. 2023) (Marchwood) (citing the OISR for the proposition

that “the potential propriety of a monetary threshold was dicta”), pet. for allowance

of appeal granted sub nom. Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of

Assessment Appeals Tax Parcel No.: 33-5-43.3, __ A.3d __ (Pa., Nos. 678, 679

MAL 2023, order filed June 12, 2024) (per curiam), 2024 WL 2951367.14 In short,

14

The Supreme Court granted allocatur as to the following questions:

(1) Whether the Commonwealth Court Majority incorrectly held that the [s]chool

[d]istrict must appeal all potentially underassessed properties in the [s]chool

[d]istrict in order to comply with the Uniformity Clause . . . [,] which holding is

inconsistent with Pennsylvania Supreme Court precedent explicitly recognizing

that there will never be perfect uniformity in real estate taxation, and constitutes a

wholly impractical requirement?

(2) Whether the Commonwealth Court Majority incorrectly held that the [s]chool

[d]istrict implemented its tax assessment appeal policy in an arbitrary fashion—

where the factual basis for such holding was not established at trial, is explicitly

contradicted by the record, and improperly disregards the totality of the trial

(Footnote continued on next page…)

28

because GM Berkshire Hills I remains good law, and because Taxpayer has not

persuaded us that it was erroneous, such that we should overrule it, the OISR in GM

Berkshire Hills II does not compel a different result.15

evidence and testimony—and is inconsistent with the standards set forth by the

Pennsylvania Supreme Court, as well as Commonwealth Court precedent?

Downingtown Area Sch. Dist., __ A.3d at __, 2024 WL 2951367, at *1. On June 19, 2024, CASD

filed an Application for Relief Seeking Leave to File Post-Argument Communication in the Nature

of a Post-Submission Communication (Application), to which Taxpayer filed an answer, asking

the Court to deny the Application. Because the Court takes judicial notice of the fact that the

Supreme Court granted allocatur, and recognizing that the grant of allocatur does not affect the

precedential nature of our decision, the Application is denied. Marks v. Nationwide Ins. Co., 762

A.2d 1098, 1101 (Pa. Super. 2000) (an intermediate appellate decision remains precedential,

despite an intervening grant of a petition for allowance of appeal as to that decision, unless or until

the Supreme Court overturns it).

15

The dissent argues we should overrule GM Berkshire Hills I and similar cases like

Kennett Consolidated. Coatesville Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals,

___ A.3d ___, ___ (Pa. Cmwlth., No. 1313 C.D. 2022, filed August 15, 2024), slip op. at 1-2

(Dumas, J., dissenting). We disagree.

First, under basic stare decisis principles, this Court now sitting en banc should not overrule

GM Berkshire Hills I. The command of stare decisis is simple: we are bound to follow our own

precedent unless the Supreme Court overrules it, or unless a litigant gives us a “compelling reason”

to warrant departure from it. See City of Philadelphia v. Tax Rev. Bd. of City of Phila., 713 A.2d

718, 720 (Pa. Cmwlth. 1998); Armstrong County v. Workmen’s Comp. Appeal Bd. (Ross &

Borough of Kittanning), 473 A.2d 755, 757 (Pa. Cmwlth. 1984). Courts do not typically overrule

their precedent sua sponte. Here, Taxpayer does not explicitly call on this Court to overrule our

monetary threshold precedent, nor has it briefed (or given CASD the opportunity to respond to)

any argument why there exists a “compelling reason” to overrule those cases. City of Philadelphia,

713 A.2d at 720. Nor has Taxpayer briefed the factors courts typically consider in deciding

whether precedent should be tossed. See Allegheny Reproductive Health Ctr. v. Pa. Dep’t of Hum.

Servs., 309 A.3d 808, 882-83 (Pa. 2023) (listing factors courts may consider, including “quality of

the precedent’s reasoning, consistency and coherence with other decisions, changed law, changed

facts, and workability, among other factors”) (quoting Ramos v. Louisiana, 590 U.S. 83, 121

(2020) (Kavanaugh, J., concurring)); see also Ins. Fed’n of Pa., Inc. v. Koken, 801 A.2d 622, 632

(Pa. Cmwlth. 2002) (Pellegrini, J., concurring) (analyzing reliance, workability, changes in law,

or changes in fact as relevant considerations in the stare decisis analysis), rev’d, 889 A.2d 550 (Pa.

2005). We should not overrule our precedent unless a litigant explicitly asks us to do so,

accompanied by thorough briefing addressing at least the compelling reason upon which that

litigant relies, which very well may include consideration of other relevant factors.

(Footnote continued on next page…)

29

However, along with its monetary threshold argument, Taxpayer relatedly

argues that even if monetary thresholds are permissible, this threshold is invalid

because it was not the result of any real cost-benefit analysis on the part of CASD.

However, the record belies that assertion. It is true that Linderman did not rely on a

precise formula in determining the exact break-even point for the school district or

the exact number of district-initiated appeals his team could handle, but he did rely

on his experience and on information from neighboring districts to estimate what

would be workable for CASD. (R.R. at 43a-44a.) Our cases do not require exact

science or an actuarial analysis; rather they require a “reasonable monetary threshold

. . . based on an estimate of the minimum potential revenue gain that will make a

tax assessment appeal cost-effective.” GM Berkshire Hills I, 257 A.3d at 834

(quoting Meadow Lake Plaza, slip op. at 5) (emphasis added). That comports with

the bedrock principle of our Commonwealth’s Uniformity Clause jurisprudence that

Even if Taxpayer had argued in a full-throated and thorough manner that GM Berkshire

Hills I ought to be overruled, we discern no compelling reason to do so. While there are certainly

respectable arguments on the merits from the three Justices who endorsed the OISR in GM

Berkshire Hills II, there were still three Justices who would have affirmed GM Berkshire Hills I.

It is hard to say that our Supreme Court equally dividing on a difficult legal question means that

we were so grievously wrong such that overruling is warranted.

Further, a grant of allocatur does not effect a change in the law; it signals that a change in

the law is possible. Marks, 762 A.2d at 1101. While an argument might exist that we should hold

this case pending the Supreme Court’s disposition of a case presenting similar issues, Taxpayer

has not made that argument. Taxpayer brought its Application under Pa.R.A.P. 2501(a), explicitly

acknowledging that its letter to the Court regarding the Downingtown Area School District

allocatur grant “does not contain any argument.” (Appl. ¶ 9.) This Court decides the cases that

come before it under the law as it exists at the time of its disposition.

In sum, as our extensive analysis in this opinion reveals, we disagree with the dissent on

the merits that GM Berkshire Hills I should be overruled. But more to the point, we believe that

under the doctrine of stare decisis—given that Taxpayer has not explicitly argued for its overruling,

nor has it briefed the compelling reasons and other factors we should consider in overruling

precedent—GM Berkshire Hills I should not be overruled. It is binding precedent of this Court

unless or until our Supreme Court overrules it.

30

“[t]axation . . . is not a matter of exact science; hence absolute equality and perfect

uniformity are not required to satisfy the constitutional uniformity requirement.”

Clifton, 969 A.2d at 1210. See also In re Harleigh Realty Co., 149 A. 653, 654 (Pa.

1930) (“Scientific formulae, arithmetical deductions and mental contemplations[]

have small value in making assessments under our practical system of taxation.”)

(emphasis added). Common pleas credited Linderman’s experience and his belief

that 10-15 appeals would be “doable” for CASD. (Common pleas’ op. at 2.)

Common pleas did not err in finding that a bona fide cost-benefit analysis, based on

Linderman’s more than three decades of experience, led to the adoption of the

$10,000 monetary threshold.

In sum, there is no per se rule that facially neutral, quantitative monetary

thresholds violate the Uniformity Clause. And here, the monetary threshold was the

product of a reasonable cost-benefit analysis on the part of CASD.

B. Policy Implementation

Having concluded that there is no per se constitutional problem with monetary

thresholds, we next address whether CASD’s Policy unconstitutionally targeted only

commercial properties.

To support its argument that the Policy’s effect was intentional and systematic

disparate treatment of commercial properties, Taxpayer points to Lionville

Associates, in which our Supreme Court referred to the “prevailing requirement that

similarly situated taxpayers should not be treated differently by taxing authorities.”

913 A.2d at 201 (footnote omitted). In a footnote, the Supreme Court clarified that

“deliberate” differential treatment does not necessarily mean “wrongful conduct,”

but rather “includes any intentional or systematic method of enforcement of the tax

laws.” Id. at 201 n.10.

31

In Broadwing Timber, we rejected a taxpayer’s argument that the fact that a

policy had not yet resulted in the appeal of a residential property’s assessment

evidenced a Uniformity Clause problem. There, we explained:

[T]hat the [school] [d]istrict’s practice thus far has resulted in appeals

of commercial or commercially-used properties is not determinative

where that practice is implemented or carried out without regard to the

type or ownership of a property. The [school] [d]istrict relies on the

occurrence of a triggering event to bring a potentially underassessed

property to its attention. So far, no sale of residential properties has

resulted in a high enough realty transfer tax to warrant review, and [the

taxpayer] has not presented evidence to the contrary. That is not to say

that none will in the future, and, based on [the] [b]usiness

[a]dministrator’s credited testimony, if one does, the same process will

be used to determine whether that property’s assessment should be

appealed. Such result is consistent with [Meadow Lake Plaza], wherein

we rejected the taxpayer[’]s argument that, even if the threshold was

facially neutral, it resulted in the appeal only of commercial properties

based on the credited evidence presented by the school district that it

would have appealed any residential property’s assessment had any met

the threshold. Slip op. at 11-12.

Broadwing Timber, slip op. at 21-22. In sum, we recognized in Broadwing Timber

that the mere fact that a given assessment appeal policy has not yet resulted in appeal

of a residential property does not mean that the policy is being implemented in an

unconstitutional manner. Further, evidence to suggest that the school district would

appeal an eligible residential property can be probative of the constitutionality of a

policy.

Here, common pleas found that “there was no evidence presented that the

Policy resulted in the identification of a residential property that met the threshold,

but such property was not selected for appeal. There was no evidence that CASD

chose to appeal one qualifying commercial property and not a similarly qualifying

residential property.” (Common pleas’ op. at 9.) Further, Lukens testified to the

detailed fashion in which he analyzed residential properties to see if any had merit.

32

(R.R. at 112a-13a.) In sum, the Policy is blind to property type, and substantial

evidence of record establishes that, like in Broadwing Timber, CASD was open to

appealing a residential property tax assessment; it simply had not identified one yet

that met the threshold.

Dr. Angelides’ testimony does not compel a different result. Sitting as

factfinder in the de novo review context, common pleas had the prerogative to

believe all, some, or none of the evidence, to make credibility determinations, and

to weigh the evidence. In re Penn-Delco Sch. Dist., 903 A.2d 600, 608 (Pa. Cmwlth.

2006). Further, common pleas was not obliged to accept even unrebutted expert

testimony. Green v. Schuylkill Cnty. Bd. of Assessment Appeals, 772 A.2d 419, 429-

30 (Pa. 2001). Quite simply, common pleas acted within its discretion in

disregarding Dr. Angelides’ testimony.

Further, we also reject Taxpayer’s argument that common pleas disregarded

the political motivations at play. Common pleas rejected that argument after hearing

the videos of the school board meetings at issue and after listening to Linderman’s

live testimony about “the reasons and basis for his [then-]suggested policy.”

(Common pleas’ op. at 9.) Further, having determined that, in operation, the Policy

worked no Uniformity Clause violation, Linderman’s comments about how he

viewed the Policy would operate are irrelevant. And even if those comments were

relevant, Linderman simply stated that the Policy would mostly affect higher-end

residential and commercial properties. Linderman acknowledged that Valley Forge

Towers required bona fide consideration of both residential and commercial

properties, and he made no assurance that residential properties would be immune

from the Policy.

33

In sum, consistent with Broadwing Timber, we discern no constitutional

violation in the operation and effect of the Policy. CASD looked at residential

properties, and it signaled openness to appealing a residential tax assessment. Like

Broadwing Timber, no residential property met the threshold for the year in question,

but that certainly does not mean that one will not in the future.

C. Arbitrary and Capricious Selection of Properties

1. Applicable Law

In Valley Forge Towers, our Supreme Court made clear that the Uniformity

Clause requires “that similarly situated taxpayers should not be deliberately treated

differently by taxing authorities.” Valley Forge Towers, 163 A.3d at 975 (quoting

Lionville Assocs., 913 A.2d at 201) (some emphasis added).

Recently, this Court has decided two cases finding school districts’

implementation of monetary thresholds arbitrary. In School District of Philadelphia,

a school district developed an appeal policy that required a monetary threshold of

$7,500 of additional tax revenue. The district contracted with a real estate advisory

firm, which, in the three weeks it had to do so, selected the properties for appeal in

the following manner. First, the real estate advisor listed 580,000 properties on a

spreadsheet, eliminating approximately 520,000 “randomly” and by “eyeball[ing]

it.” Sch. Dist. of Phila., 303 A.3d at 1159. That left him with approximately 65,000

properties. He used that process to further reduce the number of properties to 266,

138 of which he ultimately recommended for appeal. Despite evidence that some

residential properties would have met the $7,500 threshold, the real estate advisor

did not allocate time toward those. Further, the taxpayers’ expert noted that the real

estate advisor appeared to have selected properties only at the beginning and end of

34

his spreadsheet. Philadelphia’s Board of Revision of Taxes upheld the assessment

appeals, and the county court quashed those appeals.

We affirmed, describing the district’s methodology as “random and

piecemeal” and “neither objective nor neutral[,]” “tilt[ing] toward the selection of a

sub-classification of properties, i.e., commercial and industrial[.]” Id. at 1163-64.

Further, though the methodology was facially neutral, its “haphazard

implementation” rendered it practically discriminatory against commercial

properties and thus violative of the Uniformity Clause. Id. at 1164. We concluded

that

the findings of the trial court support[ed] its conclusion that the . . . tax

assessment appeals [at issue in that case] violated the Uniformity

Clause. [The real estate advisor’s] idiosyncratic and subjective

selection of underassessed properties was arbitrary and deliberately

exempted from review numerous properties that could have yielded an

additional $7,500 in annual tax revenue. At least 33 single-family

residential properties met the monetary formula threshold that could

have been appealed but were not. . . . This “systematic disparate

enforcement of the tax laws” created the violation of the Uniformity

Clause. Valley Forge [Towers], 163 A.3d at 978. It is well established

that a “taxpayer is entitled to relief under the Uniformity Clause where

his property is assessed at a higher percentage of fair market value than

other properties throughout the taxing district.” [Lionville Assocs.], 913

A.2d at 199. Here, [the t]axpayers showed that the [] [d]istrict’s appeal

sought to assess their properties at a higher percentage of fair market

value than most other properties in the City.

Id. at 1164-65.

That same day, this Court in Marchwood concluded that implementation of a

monetary threshold was arbitrary where the combination of the following four

factors was present:

First, [the school district] chose to appeal the assessments of 16

properties even though it knew that there were many more properties in

35

the [] [d]istrict that satisfied the monetary threshold. Second, Lukens[16]

testified that he “did not have a hard and fast rule with respect to the

methodology [he] used” to identify properties, and he could not

elucidate these flexible “rules” that he used. . . . He could only state

that he was “trying to maximize the return to the [s]chool [d]istrict.”

. . . Third, the [] apartment complex [subject to the appeal] was not on

Lukens’ list of properties identified for an assessment appeal, and the

[s]chool [d]istrict offered no explanation for the later selection of the

Marchwood apartment complex for an assessment appeal. Fourth, the

[s]chool [d]istrict rejected a commercial property that met the monetary

threshold for the sole reason that its counsel was aggressive.

Marchwood, 303 A.2d at 1113. The approach of the Marchwood and School District

of Philadelphia Courts reveals that whether a given policy has been implemented

arbitrarily turns on the unique facts of each of case, such that we must examine

the totality of the circumstances in making such a determination.

And while our caselaw does not set forth the precise legal standard of

determining whether a taxing authority has acted arbitrarily, we are mindful that

arbitrariness typically involves “determination[s] made without consideration of or

regard for facts, circumstances, fixed rules, or procedures” or decisions “founded on

prejudice rather than on reason or fact.” BLACK’S LAW DICTIONARY (11th ed. 2019).

2. Analysis

We agree with CASD and common pleas that CASD did not implement its

Policy in an arbitrary way. First, as discussed above, it was not improper for CASD

to employ a monetary threshold, and we approve of the propriety of $10,000

threshold in this case as finding support in substantial evidence of record. We

discern no requirement that the monetary threshold be calibrated to yield the precise

number of properties a given district has the capacity to appeal. Here, the record

16

Lukens also consulted with the school district in the Marchwood litigation.

36

shows that 141 properties potentially satisfied the $10,000 threshold, and that CASD

ultimately selected 16 of those properties for appeal. (R.R. at 94a-95a; common

pleas’ op. at 4.) Zooming out, we note that the monetary threshold eliminated a

substantial amount of discretion because it significantly narrowed the pool of

eligible properties. Nor does the fact that CASD considered a specific type of

commercial property it knew to be chronically underassessed—net-leased

properties—render its selection process arbitrary. To the contrary, consideration of

the unique factors of the properties holistically to determine which make the most

financial sense is not random or piecemeal, but rather reflects consideration of all

the facts and circumstances to make a principled decision. Lukens’ testimony

revealed that he and his team looked at the list and conducted further research to

determine, in their opinion and experience, the properties from that list to appeal.17

School District of Philadelphia does not compel a contrary result. There, the

Court explained that the consultant eliminated some 60,000 properties by

“eyeball[ing]” the spreadsheet. Sch. Dist. of Phila., 303 A.3d at 1159. Here, by

contrast, the consultant whittled down a list of 141 properties to 16 by discussing

with colleagues and doing further research. What is more, in School District of

Philadelphia, there was evidence that some residential properties met the threshold

but were nonetheless not selected. Id. No such evidence exists in this case.

Taxpayer did not demonstrate that the conference table session in this case resulted

in a “random and piecemeal” selection of properties for appeal. Id. at 1163.

17

While common pleas did not specifically address Lukens’ testimony, we are cognizant

that, in the context of a decision following a non-jury trial, we are to consider the evidence in the

light most favorable to the prevailing party. Pottstown Sch. Dist. v. Montgomery Cnty. Bd. of

Assessment Appeals, 289 A.3d 1142, 1145 n.3 (Pa. Cmwlth. 2023).

37

Marchwood is also distinguishable on its facts. Specifically, the Court there

focused on the fact that the subject property in that case was not on the consultant’s

list of properties to appeal in the first instance. Marchwood, 303 A.3d at 1113.

The Court also noted that a consultant testified that he declined to select an eligible

property because of aggressive counsel. Id. Those facts are certainly not present

here. Further, as discussed above, we must consider each case on its facts. Looking

to the record here, we note that Lukens was able to explain his method of examining

both residential and commercial properties and that he met with his team at a

conference table session to discuss a relatively short list of 141 properties, using his

expertise to whittle the list down to 16 properties. We cannot say that such a decision

was based on “prejudice” rather than “reason or fact” and thus arbitrary. “Arbitrary,”

BLACK’S LAW DICTIONARY (11th ed. 2019).18

IV. CONCLUSION

Our Supreme Court in Valley Forge Towers explicitly left open the possibility

of constitutionally permissible monetary thresholds, and GM Berkshire Hills I—

which remains good law—held that monetary thresholds that are blind to property

type do not per se violate the Uniformity Clause. Indeed, monetary thresholds are a

tool school districts can use to simultaneously respect the need for complying with

the Uniformity Clause while also making sound financial decisions with taxpayer

resources. Further, we agree with CASD that its implementation of the Policy did

18

We are not persuaded by Taxpayer’s argument that Lukens’ comment that the sixteenth

property on the list was the equivalent of a deli “[g]iv[ing] a customer a pickle” requires a finding

of arbitrariness. (R.R. at 78a.) Indeed, Linderman’s cutoff of 10-15 properties for appeal was a

range based on experience; he never purported to provide a scientific, down-to-the-decimal rule.

That Lukens, upon his review, identified 16, rather than 10-15 properties, does not render the

implementation of the Policy arbitrary.

38

not discriminate against commercial properties, and was not arbitrary, in violation

of the Uniformity Clause. Accordingly, we affirm.

__________________________________________

RENÉE COHN JUBELIRER, President Judge

39

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Coatesville Area School District :

:

v. : No. 1313 C.D. 2022

:

Chester County Board of Assessment :

Appeals and Preserve at Milltown :

Lantern Owner LLC :

:

Appeal of: Preserve at Milltown :

Lantern Owner LLC :

ORDER

NOW, August 15, 2024, the Order of the Court of Common Pleas of Chester

County, entered in the above-captioned matter, is AFFIRMED. The Application

for Relief Seeking Leave to File Post-Argument Communication in the Nature of a

Post-Submission Communication filed by Coatesville Area School District is

DENIED.

__________________________________________

RENÉE COHN JUBELIRER, President Judge

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Coatesville Area School District :

:

v. : No. 1313 C.D. 2022

: Argued: December 6, 2023

Chester County Board of Assessment :

Appeals and Preserve at Milltown :

Lantern Owner LLC :

:

Appeal of: Preserve at Milltown :

Lantern Owner LLC :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE ELLEN CEISLER, Judge

HONORABLE LORI A. DUMAS, Judge

HONORABLE STACY WALLACE, Judge

DISSENTING OPINION

BY JUDGE DUMAS FILED: August 15, 2024

I respectfully dissent for three reasons. First, in my view, the issue is

before our Supreme Court. Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of

Assessment Appeals, 303 A.3d 1104 (Pa. Cmwlth. 2023) (Downingtown II), appeal

granted (Pa., Nos. 678, 679 MAL 2023, filed June 12, 2024) (Downingtown III) (per

curiam order).1 Second, I am more persuaded by the opinions in support of reversal

in GM Berkshire Hills LLC v. Berks County Board of Assessment, 290 A.3d 238 (Pa.

2023) (GM Berkshire Hills II), which criticize the majority’s analytical

framework. Third, our Supreme Court has held unconstitutional similar taxes with

1

This Court has denied Coatesville Area School District’s (Coatesville) application to

address the Downingtown Court’s order. See Appl. for Relief Seeking Leave to File Post-

Argument Commc’n in the Nature of a Post-Submission Commc’n, 6/19/24.

monetary thresholds under the Uniformity Clause of the Pennsylvania Constitution.2

Thus, I believe this en banc Court should overrule GM Berkshire Hills, LLC v. Berks

County Board of Assessment, 257 A.3d 822 (Pa. Cmwlth. 2021), aff’d by an equally

divided court, 290 A.3d 238 (Pa. 2023), Kennett Consolidated School District v.

Chester County Board of Assessment Appeals, 228 A.3d 29 (Pa. Cmwlth. 2020), and

similar cases.

I.

Initially, the majority states that because “school districts rely heavily

on property tax revenue,” school districts have the right to appeal property tax

assessments. Coatesville Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals,

___ A.3d ___, ___ (Pa. Cmwlth., No. 1313 C.D. 2022, filed August 15, 2024)

(Coatesville), slip op. at 19 (citing 53 Pa.C.S. § 8855). The issue, however, is

whether the government may use a $10,000 monetary threshold as a mechanism to

select which property tax assessments to appeal. Id. at 18. Cf. Valley Forge Towers

Apartments N, LP v. Upper Merion Area Sch. Dist., 163 A.3d 962, 980 (Pa. 2017)

(Valley Forge) (“Where there is a conflict between maximizing revenue and ensuring

that the taxing system is implemented in a non-discriminatory way, the Uniformity

Clause requires that the latter goal be given primacy.” (citation omitted)).

A similar issue is presently before our Supreme Court: whether a school

district’s implementation of a $10,000 monetary threshold violates the Uniformity

Clause. Downingtown III; Downingtown II, 303 A.3d at 1114 (criticizing the school

district for its “piecemeal implementation of this policy,” which resulted in a

deliberate decision to not challenge other underassessed properties and a violation

2

Pa. Const. art. VIII, § 1 (“All taxes shall be uniform, upon the same class of subjects,

within the territorial limits of the authority levying the tax, and shall be levied and collected under

general laws.”).

LAD - 2

of the Uniformity Clause). I would hold the case pending our Supreme Court’s

disposition of the appeal.

II.

A.

Second, under the Uniformity Clause, a property owner should have no

reason to feel he is bearing a “disproportionate share of the tax burden” as compared

to his neighbor. GM Berkshire Hills II, 290 A.3d at 251 (Donohue, J., opinion in

support of reversal).3 As Justice Donohue points out, the key inquiry is not whether

the monetary threshold is “sound or reasonable, but whether the policy is

constitutional.” Id. at 251, 254 (emphasizing that “when addressing a Uniformity

Clause challenge . . . , we are not concerned with the intention of a selection criteria,

but with its impact” (emphases added)). Cf. Coatesville, ___ A.3d at ___, slip op. at

26-27 (suggesting no impact exists because the threshold is de facto neutral).

For example, government policies that classify properties by

neighborhood or type, e.g., commercial, residential, or industrial, are

unconstitutional. GM Berkshire Hills II, 290 A.3d at 251-52 (citing Valley Forge,

163 A.3d at 978, and Clifton v. Allegheny Cnty., 969 A.2d 1197 (Pa. 2009)). Such

policies are unconstitutional because they raise the specter of “discrimination by

local officials among similarly situated property owners who are underrepresented

in the general population,” e.g., the very rich or very poor. Id. at 252 (quoting

Lionville II, 913 A.2d at 201). Critically, the Lionville II Court “never suggested that

the government could divide the realty within a taxing district into multiple sub-

classifications and either apply disparate assessment ratios to the different sub-

classifications, or otherwise systematically treat them differently.” Valley Forge, 163

3

Accord Downingtown Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals, 913

A.2d 194, 200 (Pa. 2006) (Lionville II).

LAD - 3

A.3d at 973 (first emphasis in original).4

Yet, the majority sanctions the government’s classification of realty via

a monetary threshold. I respectfully disagree. See GM Berkshire Hills, 290 A.3d at

253 n.5 (Donohue, J., opinion in support of reversal) (opining that such “thresholds

could easily serve as methods of circumventing our holdings in cases such as Clifton

and [Valley Forge], as they could be set at amounts that would largely target only

certain neighborhoods (i.e., those known to contain more expensive homes),

property uses (large apartment buildings vs. small single-family homes), or types

(commercial versus residential). Under both Clifton and [Valley Forge], such

pretextual thresholds would run afoul of the Uniformity Clause, regardless of

whether they were intentionally created”). Compare id., with Notes of Testimony

(N.T.), 10/13/22, at 21-22 (reflecting agreement by a government witness that the

“average taxpayer probably doesn’t pay $10,000” of property tax and that the

threshold only targets “commercial properties and very high-end residential

properties”).

I perceive no principled distinction between the government (1)

selecting only “commercial properties and very high-end residential properties,”

N.T. at 21-22, and (2) selecting a “facially property-type-neutral” monetary threshold

that self-selects only those properties. See Coatesville, ___ A.3d at ___, slip op. at

4, 26. The Coatesville majority holds the latter is “facially fair and neutral.” Id. at

26. The latter is constitutional, the majority reasons, because it applies to

“underassessed properties of all types,” and thus, no subclassification of property

occurs. Id.

4

Accord Narehood v. Pearson, 96 A.2d 895, 899 (Pa. 1953) (stating that the “intentional,

systematic undervaluation by state officials of taxable property of the same class belonging to other

owners contravenes the constitutional right of one taxed upon the full value of his property”).

LAD - 4

Although the majority’s reasoning is facially appealing, I submit that

the majority fails to adequately consider how the government’s policy creates an

impermissible subclass: properties that could generate at least $10,000 of tax

revenue. See GM Berkshire Hills II, 290 A.3d at 253 n.5 (Donohue, J., opinion in

support of reversal) (stating that “blanket allowance of rigid monetary thresholds

could violate uniformity, while general allowance would require courts to constantly

draw lines based upon whether the record demonstrates that the monetary threshold

is a mere pretext, either by design or in its impact”); Valley Forge, 163 A.3d at 980.

In other words, owners of “commercial properties and very high-end residential

properties” are members of a class targeted solely for their membership in that class.

See GM Berkshire Hills II, 290 A.3d at 255 (Donohue, J., opinion in support of

reversal).

In addition to endorsing the government’s de facto property

classification, in my view, the majority does not sufficiently address the obvious

impact of its holding: underassessed properties below the monetary threshold will

shoulder a less proportionate tax burden than underassessed properties above the

monetary threshold. See GM Berkshire Hills II, 290 A.3d at 254 (Donohue, J.,

opinion in support of reversal). Cf. Clifton, 969 A.2d at 1222 (rejecting a tax policy

that negatively impacted “owners of properties in lower-value neighborhoods where

property values often appreciate at a lower rate than in higher-value neighborhoods,

if they appreciate at all”). The impact necessarily derives from the government’s

policy of targeting only underassessed properties that could generate at least $10,000

of additional tax revenue. But the Uniformity Clause prohibits favoritism.

B.

Further, under the majority’s analysis, it appears we must also endorse

LAD - 5

a policy that targets properties that could generate at least $100 or $100,000 of

additional tax revenue, albeit subject to one limiting principle: the factfinder’s

credibility determination.5 If the factfinder finds that the government witness

credibly testified that the threshold was the result of a bona fide cost-benefit analysis,

then we must sanction the government’s monetary threshold—even if the policy’s

impact results in de facto discrimination. In other words, per the majority, a very

high (or low) facially neutral monetary threshold could be constitutional even if the

result is only properties within “lower-value” or “higher-value neighborhoods.” See

Clifton, 969 A.2d at 1222.

Perhaps recognizing the absence of any other limiting principles

(except credibility), the majority posits that courts may consider whether the

government’s implementation of a threshold results in an arbitrary and capricious

selection of properties. Coatesville, ___ A.3d at ___, slip op. at 35-36. In the

majority’s view, courts could consider the “totality of the circumstances” based on

the “unique facts of each case,” including, presumably, credibility. Id. at 36. Thus,

I suggest the majority’s analytical framework compels the following corollaries.

First, the exact same monetary threshold will result in different

outcomes, depending on the factfinder’s credibility rulings and how the government

implements the threshold. For instance, if the government’s implementation of the

threshold results in a single property, then we must accept differing outcomes, i.e.,

5

Compare Coatesville, ___ A.3d at ___, slip op. at 31 (deferring to the trial court’s

credibility determination in holding “that a bona fide cost-benefit analysis, based on [the

government witness’s] more than three decades of experience, led to the adoption of the $10,000

monetary threshold”), with N.T. at 19 (agreeing with counsel’s question that he did not “conduct

any independent analysis to arrive at that threshold for Coatesville, right? It was simply based on

your prior experience?”). Even if a witness actually conducted an independent analysis, I question

whether the credibility of a witness’s testimony should be the sole determinative factor on the

constitutionality of a monetary threshold. See GM Berkshire Hills II, 290 A.3d at 252 (Donohue,

J., opinion in support of reversal).

LAD - 6

the trial court finding the government witness credible (or not credible) in targeting

the property. Second, minute differences in the threshold are meaningless, all else

being equal. For example, take the case at bar, but assume a $10,001 threshold and

the factfinder finds the government witness not credible. Respectfully, I am not

persuaded that we can constitutionally harmonize such differing outcomes even if

the government’s implementation was reasonable. See GM Berkshire Hills II, 290

A.3d at 253 n.5 (Donohue, J., opinion in support of reversal) (observing that courts

would be tasked with drawing “lines based upon whether the record demonstrates

that the monetary threshold is a mere pretext, either by design or in its impact”).

C.

Further, the government’s witness, in identifying qualified properties,

used the common level ratio (CLR). See, e.g., N.T. at 64-65 (agreeing that he used

the ratio to calculate values), 75-76, 87-88 (reflecting testimony from the

government’s witness that he only looked at residential properties listed for sale or

sold in the last three to five years and multiplied them by the CLR).6 But CLR “is

not indicative of uniformity.” Clifton, 969 A.2d at 1216 (emphasis added); GM

Berkshire Hills II, 290 A.3d at 258 (Dougherty, J., opinion in support of reversal).7

6

The witness also testified that he used a different methodology for commercial properties.

N.T. at 88; see also Coatesville, ___ A.3d at ___, slip op. at 7-8. It remains unclear to me why the

government using one methodology to select qualifying residential properties and a different

methodology to select qualifying commercial properties is constitutional merely because the

threshold is facially neutral. See Valley Forge, 163 A.3d at 977 (holding that the government’s

policy of selecting only commercial properties to appeal violates the Uniformity Clause). The

majority rejects out of hand any suggestion that the government acted improperly by considering

a particular type of underassessed commercial properties. Coatesville, ___ A.3d at ___, slip op. at

37.

7

Accord Lionville II, 913 A.2d at 201 (explaining that CLR “yields substantial leeway for

potential discrimination by local officials among similarly situated property owners who are

underrepresented in the general population, given both the significance of range in the application

of averages . . . , and the fact that under-representation in a surveyed population yields diminished

impact on resultant averages” (citations omitted)).

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CLR is not indicative of uniformity because it only reflects properties that were

sold.8 GM Berkshire Hills II, 290 A.3d at 254 (Donohue, J., opinion in support of

reversal), 258 (Dougherty, J., opinion in support of reversal); Downingtown Area

Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals, 819 A.2d 615, 624 (Pa.

Cmwlth. 2003) (Lionville I) (en banc) (Friedman, J., dissenting), rev’d, Lionville II.

Regardless, even if CLR was not flawed, using CLR “to select properties for appeal”

is inherently discriminatory: “the members of the sub-class are aware that they alone

have been targeted for scrutiny solely due to their membership in the sub-class;

moreover, they alone must bear the costs of defending against the appeal and of any

follow-up litigation in court . . . .” GM Berkshire Hills II, 290 A.3d at 255 (Donohue,

J., opinion in support of reversal) (citation omitted). To be clear, I agree with the

reasoning by all of the GM Berkshire Hills II Justices in their opinions in support of

reversal.

III.

Third, our Supreme Court has held that similar taxes with legislated

monetary thresholds violated the Uniformity Clause. For example, in In re Cope’s

Estate, 43 A. 79 (Pa. 1899) (Cope), our Supreme Court held unconstitutional an

inheritance tax that applied only to estates worth more than $5,000. Cope’s, 43 A.

at 83. In explaining why the estate tax violated the Uniformity Clause, the Cope’s

Court reasoned that as “to classification, it is very clear that $5,000 in value of the

8

Generally, in assessing properties, the taxing authority assesses all properties: sold and

unsold properties. Appeal of Armco, Inc., 515 A.2d 326, 329 (Pa. Cmwlth. 1986) (en banc). If the

taxing authority did not assess owners of unsold properties, then such owners could improve their

properties without a change in assessed values. See id. Thus, the government’s use of recently

listed or sold residential properties would not capture unsold, potentially improved residential

properties that would exceed the threshold. See N.T. at 75-77 (reflecting testimony by

government’s witness that he did not review unsold residential properties for the last three to five

years and thus did not know whether any unreviewed properties would have met the threshold);

see also Coatesville, ___ A.3d at ___, slip op. at 7.

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personal property specified in the act is precisely the same in kind as $50,000 (or

any other sum) in value of said property.” Id. “The money value of any given kind

of property,” our Supreme Court held, “can never be made a legal basis of

subdivision or classification for the purpose of imposing unequal burdens on either

of such classes, or wholly exempting either of them from any burden.” Id. (emphasis

added); see generally Nextel Commc’ns of Mid-Atl., Inc. v. Com. of Pa., Dep’t of

Revenue, 171 A.3d 682, 694-98 (Pa. 2017) (Nextel). The Nextel Court reiterated that

for “over a century, our Court has steadfastly adhered to an interpretation of the

Uniformity Clause that classifications based solely upon the quantity or value of the

property being taxed are arbitrary and unreasonable, and, hence, forbidden.” Nextel,

171 A.3d at 696 (emphasis added and citations omitted).

The Nextel Court also discussed another tax that our Supreme Court

invalidated as unconstitutional. Id. at 699-700 (discussing Mt. Airy #1, LLC v. Pa.

Dep’t of Revenue, 154 A.3d 268 (Pa. 2016) (Mt. Airy)). Per Nextel, in Mt. Airy, our

Supreme Court addressed a tax that classified taxpayers into two groups: (1)

taxpayers earning less than a particular monetary threshold paid a flat tax amount;

and (2) taxpayers earning more than the threshold paid a percentage tax. Id. The

Mt. Airy Court reasoned that the tax violated the Uniformity Clause because it

resulted in “one group with income above a certain level paying a higher tax rate

than the other group with income below that level.” Id. Thus, per Nextel, courts

have held unconstitutional taxes that purport to reflect a facially neutral, quantitative

monetary threshold, i.e., monetary value of property, including taxes that exempt

property below a monetary threshold (such as less than $10,000). See id.

In the case at bar, and akin to the taxes discussed in Nextel, the monetary

threshold exempts taxpayers whose properties could not generate an additional

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$10,000 in tax revenue. See Nextel, 171 A.3d at 696, 699.9 In other words, the

threshold applies only to taxpayers whose properties exceed a certain monetary

value, i.e., could potentially generate an additional $10,000 in tax revenue. Similar

to the Mt. Airy tax, the instant $10,000 threshold divides property owners into two

groups: (1) taxpayers whose assessments, if successfully challenged, would result in

less than $10,000 of tax revenue, and thus their tax remains unchanged; and (2)

taxpayers whose assessments, if successfully challenged, would result in more than

$10,000 of tax revenue, and thus pay more than the other group. See id. at 699-700.

Using such a monetary figure to classify properties for the purpose of imposing

unequal burdens violates the Uniformity Clause. See id. at 697, 699-700.10

In sum, I discern little constitutional daylight between a legislated

monetary amount, see, e.g., id., and the local government’s selection of a monetary

threshold. At least with the former, it was the product of legislative debate. I submit

the latter is subject to the whims of local government officials.

For these reasons, I respectfully dissent. As Downingtown III and GM

Berkshire II signal, our Supreme Court continues to struggle over whether such

monetary thresholds are constitutional.11 With utmost respect, I disagree with the

9

Compare Nextel, 171 A.3d at 699 (noting that 98.8% of the taxpayers at issue would not

pay the tax at issue), with N.T. at 21-22 (conceding that the “average taxpayer probably doesn’t

pay $10,000” of property tax).

10

Specifically, the Nextel Court discussed, inter alia, Kelley v. Kalodner, 181 A. 598 (Pa.

1935), in which the legislature had imposed an income tax only on taxpayers whose income

exceeded a particular monetary threshold. Nextel, 171 A.3d at 697. In holding that such a tax

violated the Uniformity Clause, the Kelley Court explained that although the legislature’s goal of

imposing the tax “upon those most able to bear it,” “may have been laudable as a matter of public

policy,” “the principle of inequality involved, if once established, might lead to grossly unfair

results in the future.” Id. (summarizing and quoting Kelley). Although these cases address taxes

enacted by the legislature, the principles underpinning our Uniformity Clause jurisprudence would

appear to apply equally to a case in which the local government has selected a particular threshold.

11

Accord In re Lower Merion Twp., 233 A.2d 273, 276 (Pa. 1967) (Lower Merion) (“No

provision in our constitution has been so much litigated yet so little understood; and certainly not

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majority’s holding that applying a “facially neutral, quantitative” $10,000 monetary

threshold does not result in an unconstitutional, impermissible subclass of property.

In my view, it does: the practical impact of the government’s policy results in

disparate treatment. Further, I submit that the majority insufficiently scrutinizes and

balances (1) the government’s alleged cost-benefit justification, with (2) the costs to

the taxpayer of defending against an assessment appeal. Additionally, in my view,

the government erred by using CLR to implement its policy. Finally, other than

credibility, there appears to be no other limiting principles in the initial step of the

majority’s analytical framework. I recognize that rough—not perfect—uniformity

is the goal. However, the government cannot discriminate in reaching for the goal.

LORI A. DUMAS, Judge

Judge Wallace joins in this Dissenting Opinion.

the least thorny question has been whether real estate as a whole constitutes a class which cannot

be further broken down for tax purposes. To put to rest some of this confusion, we hold today that

real estate as a subject for taxation may not validly be divided into different classes.”); 2 Wade J.

Newhouse, Const. Uniformity & Equality in State Tax’n 1199-1435 (2d ed. 1984) (tracing evolution

of Pennsylvania’s Uniformity Clause jurisprudence). The Lower Merion Court invalidated an

assessment that could either “be interpreted as [(1)] a classification of real estate into categories

such that one category, unoccupied or unconveyed residential property, is not subject to interim

assessments, or [(2)] whether they be treated as simply exempting such property from otherwise

permissible interim assessments . . . .” Lower Merion, 233 A.2d at 275.

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