Low Property Taxes May Not Mean Good Government

December 3, 2012

It is hard to wrap your head around the real estate tax rankings in Bucks County. In past years, towns that spent wisely were usually able to keep taxes down, and that success was reflected in a low ranking. But the poor economy, and sagging home values, have conspired to skew the table.

While the average tax per parcel in some municipalities has increased due to the need to offset rising expenses, the thousands of successful assessment appeals over the years have helped push other towns' averages in the opposite direction. Low average taxes, formerly a badge of honor, can now mean simply more appeals granted.

Based on the latest data from the county Board of Assessment, the lowest four municipalities in Bucks are all in QCSD. Two come with an asterisk based on size, and one is able to keep taxes down by raising utility rates. But regardless of the collaterals, residents are likely quite happy with their bills.

Top dog Richlandtown Borough, one of the smallest in the county with only 417 properties, has maintained its average tax of $27 since 2009. #3 Trumbauersville, even smaller with 346 properties, has seen its taxes substantially reduced in the last three years, from an average of $75 to $58. Number two Quakertown Borough, despite slightly decreased assessments, has kept its $43 average, though town-owned water and electric rates have been increased to compensate. Milford, at number four, saw minimally lower taxes, from $64 to $62, despite increased assessments.

Number five Silverdale, at $79, is the only other Bucks town with average taxes less than $100. At the other end of the scale, heavily industrial Bristol Borough charges an average of $1099, and pricey-estate riddled Solebury gets $1194.

Richland Township is an interesting story. Back in 2008, it had the seventh lowest property tax rate of the 54 county municipalities. So there was a mini-buzz when the supervisors announced that, after 19 years of no increases, they were finally forced to raise rates from 2.5 mills to 9.5 to cover the increased expenses. The community showed that it understood, because in 2009 they returned supervisor Craig Staats to office with almost 70 percent of the vote.

And fellow supervisor Rick Orloff, a CPA who does much of his work in municipal finance, explained that while the new millage rate would move RT to the middle of the county pack, that ranking would increase as other towns were forced to raise their rates to keep up with increasing costs. The latest assessment data shows that he was indeed correct:

Based on average tax per parcel of land, Richland was 24 th after the 2008 increase. Just a year later they were 22 nd . By 2011 it was 20 th , and this year tied for 17 th . But eight of the towns lower than, or tied with, RT have no local police force. And the 2012 average tax of $250 is only one dollar higher than it was in 2009, although total assessments are up substantially, 1.14 percent.

By contrast, the other number 17, Riegelsville, is up to $250 from $210. Number 16 Hulmeville increased from $201 to $239. Number 14 Nockamixon jumped from $34 to $204, number 12 Bridgton $79 to $159, number 10 Haycock $76 to $151, and number 7 Durham from $29 to $142.

Of course, municipalities aren't the only recipients of property tax dollars. School districts set their own millage rate, and their piece of the pie dwarfs the towns' slices. In fact, for three years the Central Bucks School District has been dealing with the lower revenues resulting from tax appeals by attempting to file appeals of their own seeking to selectively raise assessments on certain properties. Last week they learned that three times isn't a charm.

The Bucks County Board of Assessment had previously rejected CB's 2010 appeal of 130 properties, and a similar appeal in 2011 for 750 properties was dismissed because of late filing. Now the board has unanimously rebuffed the directors for a third time. Chairman Russ Kavana explained that the appeals of 37 homes, and six commercial properties, failed because the school district did not present "enough quality information." "There were so many flaws in each and every one of them. They didn't have an appraiser there to comment to the attorney who kept asking questions. All they kept saying was, 'We stand by our appraisal.'"

The board also took the unprecedented step of overturning a prior settlement that Central Bucks had reached with a commercialc property owner. Message sent - Bucks County doesn't approve of school districts, and towns, trying to balance their budgets by singling out a few citizens.

Meanwhile, there was more distressing tax news on the state level. Much-needed funds for education will have to, again, be diverted to pensions for teachers and state retirees (including the legislators who created this disaster).

The Public School Employees Retirement System (PSERS), and the State Employees Retirement System (SERS), together have an unfunded liability of $41 billion. The state paid nearly $1.1 billion into the programs during the fiscal year that ended in June. That figure is now projected to pass $2.2 billion next year, and if left unchecked, reach $5.1 billion by 2019.

After cutting $860 million from PA public schools in 2011-12, Gov. Tom Corbett called for an additional cut of $100 million in his proposed 2012-2013 state budget. On June 29, the General Assembly passed a budget that rejected Corbett's proposed cuts to Accountability Block Grants, and added nearly $50 million to basic education funding for financially distressed school districts. But such gallant efforts may not be possible again, given the budget office's doomsday projections.

In 2010-11, the state contributed just over $10 million to QCSD. In 2012-13, it is just over $9 million, a ten percent loss in only two years. With the astronomic growth of the retirement payments, it is inevitable that this trend will continue, and likely worsen.

And we may soon be fondly remembering the good old days of 2012 assessments and taxes.