The city will miss its own target to complete the appeals filed by property owners over their 2019 market values by the end of December and the Kenney administration has yet to replace the head of the Office of Property Assessment following the discovery of significant flaws in the city’s assessments.
The city’s Board of Revision of Taxes (BRT) will push to January approximately 400 appeal hearings for property owners contesting their property assessments issued last year, said Carla Pagan, executive director of the board.
As of Dec. 11, the BRT received 10,211 property assessment appeals from last year, reaching a five-year high. Of those appeals, 75% were for residential properties and 25% for commercial and industrial properties.
The BRT has yet to render appeals decisions for 1,078 property owners as of Dec. 11. The BRT will render decisions on 700 of those appeals this month, but property owners will not be informed until January.
So far, the market values of 4,251 parcels were changed due to an appeal; the owners of approximately 4,050 of those properties saw their assessed values drop.
Appeal losses will cost the city at least $10 million in lost revenue, which includes about 90% of appeals through Dec. 4, said Mike Dunn, a spokesman for the Kenney administration, in an email. The appeals have slashed $737 million from the city’s total assessed values.
Pagan maintained bumping appeals into the next calendar year was not unusual, noting that appeals continue to trickle in. She did not expect the remaining 2019 appeals to bog down BRT hearings for property assessments issued this year. Those hearings will kick off next month.
Pagan blamed the backlog on a glut of appeals that were filed late, and requests from property owners to reschedule hearings for a variety of reasons, including delays in attaining their own appraisals.
“We can’t control that, but we also want to be fair to property owners,” Pagan said about property owners who request to reschedule their hearings.
During a City Council budget hearing in May, Pagan told legislators the BRT expected to complete all assessment appeals by the end of the year. The BRT is made up of seven members appointed by Board of Judges of the Philadelphia Common Pleas Court.
Asked whether the Kenney administration ought to provide more funding to the BRT to accomplish assessment appeals faster, Dunn said, “We work with the BRT every year to determine their budgetary needs for the coming year and advocate for any increases that they request before City Council.”
For the 2019 market values, the city’s property values skyrocketed 10.5% citywide, igniting a firestorm of complaints from legislators and residents. Appeals reached a height not seen since 2014 when the city launched a new system for valuing properties at their actual market value, resulting in more than 25,000 property owners filing appeals.
Significant flaws and inaccuracies were later discovered in the Office of Property Assessment’s methodology for assessing property values. The fallout led the Kenney administration to put in place reforms and change the OPA’s assessment methodology.
Kenney also sought to replace Chief Assessment Officer Michael Piper in February, but Piper remains in his post.
Dunn said the administration’s initial internal search to replace Piper was completed but did not yield a successful candidate. The administration has retained a national search firm in the ongoing search for a new chief assessor.
The property assessments for 2020, released in April, increased citywide by 5%, with residential values rising 3.9%.
The city also will not complete property reassessments for 2021 market values due out in April, ensuring most will remain unchanged from last year’s values.
Dunn said a second round of planned reassessments using the new methodology, known as trending, was scrapped after initial results showed “anomalies,” i.e. they had accuracy issues.
The city will carry forward the assessment values from 2020, with exceptions for new construction, expiring tax abatements, and renovations, among others.