holding that to the extent the statutory scheme for equalization set forth in 72 P.S. §5349(d.2), which is essentially the same as that found in 72 P.S. §5453.704, requires application of the EPR against the fair market value of the property as of the year of the appeal (i.e., to the extent the common-level ratio does not vary by more than 15 percent from the EPR), it creates a class of taxpayers who are subjected to a disproportionately high tax burden, thereby rendering the provision arbitrary and unconstitutional
How later courts described this case
- holding that to the extent the statutory scheme for equalization set forth in 72 P.S. §5349(d.2), which is essentially the same as that found in 72 P.S. §5453.704, requires application of the EPR against the fair market value of the property as of the year of the appeal (i.e., to the extent the common-level ratio does not vary by more than 15 percent from the EPR), it creates a class of taxpayers who are subjected to a disproportionately high tax burden, thereby rendering the provision arbitrary and unconstitutional
- 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)
- holding that, unlike the Uniformity Clause, “the United States Constitution does not require equalization across all potential sub- classifications of real property”
- holding that to the extent the statutory scheme for equalization set forth in 72 P.S. §5349(d.2
Written by the judges who cited it.
The opinion
Chief Justice CAPPY,
dissenting.
I respectfully dissent.
First, I disassociate myself from the majority’s discussion that properties subject to assessment appeals end up carrying a heavier tax burden than other properties. The majority takes this argument from the dissenting opinion in Vees v. Carbon County Bd. of Assessment, 867 A.2d 742 (Pa.Cmwlth. Ct.2005). In her dissenting opinion in Vees , Judge Friedman expressed concern that “counties use different methodologies to value properties in county-wide assessments as opposed to assessment appeals.” Id. at 750 . The majority springboards off of Judge Friedman’s dissent in Vees and produces an argument asserting that the methodology used for valuing properties following an appeal filed by a taxing authority differs from that employed in other assessments; the majority also states that because of this differing methodology, properties which are subject to an appeal filed by a taxing authority are taxed more heavily than other properties. M.O. at 471-75, 913 A.2d at 202-05. The majority concludes that the Legislature has thus effectively “carved out a class of taxpayers who are subjected to an unfairly high tax burden — namely, those whose assessment is appealed by any taxing district in which the property is located.” M.O. at 475, 913 A.2d at 204-05. The majority finds that as “this classification is not based on *478 any legitimate distinction between the targeted and non-targeted properties, it is arbitrary, and thus, unconstitutional.” Id.
While an issue regarding whether properties subject to appeals filed by taxing authorities are taxed more heavily is an interesting one, it was not presented by Appellant. Appellant makes no argument that properties subject to appeals are systematically subject to higher taxation. Rather, its argument revolves around Deitch v. Board of Property Assessment, Appeals and Review of Allegheny County, 417 Pa. 213 , 209 A.2d 397, 401 (1965). Appellant contends that since it has proven that a handful of other strip malls are assessed at a lesser rate than its own strip mall, then, per Deitch , the assessment of Appellant’s property violates the Uniformity Clause. As I believe it improper for this court to speak to an issue not raised by the parties — particularly one of constitutional dimension — I cannot join the majority opinion. 1
Furthermore, I write to express my disagreement with the majority’s rejection of the method employed by the State Tax Equalization Board (“STEB”) for determining a county’s common level ratio in favor of the common law Deitch method. In my opinion, the Deitch method of computing the common level ratio is unsatisfactory. For example, the Deitch method of computing the common level ratio allows a taxpayer to adduce only evidence relative to properties which are similar to the one he owns. The Uniformity Clause, however, requires that all types of property must be taxed at the same rate. See Keebler Co. v. Board of Revision of Taxes of Philadelphia, 496 Pa. 140 , 436 A.2d 583, 584 (1981).
Also, the Deitch method requires only the scantest of evidence to establish the common level ratio. Deitch cited with approval a case in which a taxpayer adduced evidence relative to merely three other similar properties in the county. Deitch, 209 A.2d at 403 (citing Brooks Building, 391 Pa. 94 , 137 A.2d 273 (1958)).
*479 On the other hand, the method utilized by the STEB for computing a county’s common level ratio is quite comprehensive. The STEB utilizes the records of all real property transfers in each county for a given calendar year, examining both residential and commercial property transfers. It considers only arm’s-length sales and excludes transfers it considers “questionable” in an effort to ensure that its statistics are as accurate as possible. 61 Pa.Code § 603.31(b) and (d). The STEB also “[periodically ... compare[s selling prices] with market values on the same properties, as appraised by independent appraisers when available.” 61 Pa.Code § 603.31(e).
In my opinion, the STEB’s method for computing a county’s common level ratio is more sound than the common law Deitch method. The STEB method arrives at a common level ratio only after considering the bulk of all arm’s-length property sales — whether these sales are of residential or commercial property — in a county. The Deitch method, on the other hand, permits a landowner to establish the common level ratio by looking only to a single class of property; it also permits a landowner to establish his case via a fairly scant amount of evidence. It is apparent that such a methodology would be prone to gross distortions. The STEB method of adducing the common level ratio, on the other hand, is far more likely to arrive at an accurate common level ratio as it is a broad ranging study of a county. Thus, contrary to the position taken by the majority, I believe that we should reject the Deitch method of valuation and embrace the STEB’s method of computing the common level ratio.
For the foregoing reasons, I dissent.
Justice EAKIN joins this dissenting opinion.
. Furthermore, I note that our limited grant did not encompass a federal equal protection issue. Thus, I believe it improper to discuss the federal constitution in this matter.