Assessment of Real Property Appeal by School District Uniformity Clause
Valley Forge Towers Apartments N, LP v. Upper Merion Area Sch. Dist., PICS Case No. 17-1041 (E.D. Pa. July 5 2017) Saylor. C.J. (27 pages).
Commonwealth court erred in dismissing appellants' complaint for declaratory and injunctive relief asserting that school district violated the uniformity clause by appealing the real property assessment of commercial properties, including apartment complexes, but not single-family homes because the uniformity clause did not allow the government to treat different property sub-classifications in a disparate manner. Reversed.
School district's most recent countywide assessment of real property occurred in 1996. School district appealed the assessment of commercial properties, including apartment complexes, but not of single-family homes. While those cases were pending, appellants filed a complaint seeking declaratory and injunctive relief and arguing that the school district violated the state charter's uniformity clause by systematically appealing only the assessments of commercial properties. They also alleged they lacked an adequate remedy at law because their claims were directed to the strategy of the school district to discriminate against commercial properties as a group by targeting them for administrative appeals while ignoring lower assessment ratios among single-family homes. They contended that the school district's actions comprised an unconstitutional application of 8855. The common pleas court dismissed the complaint and held that the uniformity clause did not require equalization across all sub-classifications of real property. The commonwealth court affirmed the decision.
The court granted review to consider whether the uniformity clause allowed the school district to concentrate solely on commercial properties while forgoing appeals as to single-family residences. School district argued that the appellants waived the issue of whether equity jurisdiction was properly invoked and argued that the common pleas court correctly held that it was not properly invoked. The court found that both contentions lacked merit. The commonwealth court expressly refrained from an inquiry into the adequacy of appellants' administrative remedies. The common pleas court did not suggest any valid reason why its equity jurisdiction was improperly invoked. The statutory appeals process was not designed to provide the declaratory or injunctive relief that appellant's sought.
Appellants argued the lower courts misconstrued the holding in Downingtown Area Sch. Dist. v. Chester County Bd. of Assessment Appeals, 590 Pa. 459. The court found that Downington never suggested that the government could divide the realty within a taxing district into multiple subclassifications and treat them differently. The court noted that all property in a taxing district was a single class and the uniformity clause did not allow the government to treat different property subclassifications in a disparate manner. School district argued that its practice was constitutionally permissible because the subclassification was neither arbitrary nor capricious and was based on reasonable financial objectives. District also asserted that appealing every under-assessed property in the district was impossible as a practical matter.
The court rejected district's argument that the only alternative was to appeal all real property assessments in the district because there were other, non-discriminatory, methods of deciding which properties to appeal. The court held that a taxing authority was not permitted to appeal only the assessments of one subclassification of properties where the sub-classification was drawn according to property type. Additionally, appellants were entitled to an opportunity to prove their assertion of a political motivation in district's choosing commercial properties and apartment complexes.