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Reassessment back on the agenda — 18 years since last done

Because Lycoming County has not had a reassessment since 2004, assessments for property taxes are "way out of whack," said county Commissioner Tony Mussare.

Reassessment is the process of determining a property's value for real estate tax purposes.

"It's not a popular thing to talk about...and I think part of that is that the public doesn't really understand reassessment," said Commissioner Rick Mirabito.

Since the county has not done a reassessment for almost two decades, property values have increased, and yet, the baseline for determining property taxes is still at the level it was at the last assessment.

As an example of how this disparity plays out, Mussare said, "You're seeing AirBnbs all over this county. You're seeing license plates from New York, New Jersey. There's a reason for that. They come up here and say, 'This is cheap.' They'll pay a half million dollars for something that was assessed at $100,000 and make money."

"And what do you do with that, just pass it on to our general population," he added.

Brooke Wright, the county's chief assessor, cited a property in McHenry Township, advertised as an AirBnB, which went on the market a few days ago for $2.5 million, but the assessed value, according to the assessment 18 years ago, is $385,000.

"Just so the public understands, the market value is set by a number of factors, one of which is what the income could be, what comparable sales could be, what the per acre value is. That's an incredible difference between assessed value and market value," Mirabito said, referring to the property Wright mentioned.

Assessments are conducted using three different methods.

"We use the sales comparison, the income approach if it's an income property, and the cost approach," Wright said.

Under the sales approach, the assessor will compare the property to similar ones in that particular area that have been sold recently. The cost approach is based on the amount it would cost to build a similar structure at today's costs. This also takes into account the value of the land. The income approach takes into account the amount of money that could be generated if the property were rented out.

Taxing entities, such as municipalities and school districts, can appeal in cases where they feel the assessed real estate taxes are out of line with what a property is worth in terms of market value.

"But the point is that the difference in taxes between what one pays on $385,000 and $2.3 (million) is made up by everybody else in the county,' Mirabito said.

Conversely, property owners can appeal if they feel that their taxes are too high based on the current value of their home.

The example that Mussare used was the Lycoming Mall, which due to the exodus of stores has less income from the rents than it did at the time of the current assessment.

"The Lycoming County Mall was at one time probably assessed at about $44 million. They've taken this to appeal a number of times," Mussare said.

Currently, the mall is assessed at $10 or $12 million, Wright said.

"That difference is made up by higher taxation to the population. That's just one example. It can happen in commercial or industrial and residential properties," Mussare said.

"When that happens, there is no option other than to raise the millage, whether it's the county, because we don't have enough money, or the school board," Mussare said.

Referencing Mussare's comments on the mall, Wright said, "We have had a lot of big box (stores) appeals in the past five years."

"The county lost over a half million in county taxes due to these appeals," Wright said.

Because the properties were assessed at the current value, but the appeals granted them a decrease, then the amount of tax revenue based on the original assessed value is not realized.

"Annually, you do not collect those taxes, so they have to go up and the real estate tax goes up, the millage goes up because there's no other way for a school district or municipality to equal that revenue," Mussare said.

"Taxpayers have to understand that our goal here isn't to raise revenue. The goal is to distribute equitably the tax burden that someone who has a property that they sell for $2.3 million is basically reaping the benefit at the expense of someone else because it was assessed at $385,000," Mirabito said.

"They would be paying their fair share of taxes. Everyone would pay their fair share based on the building they have -- if it's a commercial property, how much income it produces," Mirabito said.

Mussare noted that right now is a time of appreciation in real estate values, with property values increasing.

"You have Nationals that are $70 to $80,000 that are now selling for over $200,000. We have ranches that are selling between $300- and $400,000 that the person maybe bought for $150,000. Their taxes are going to go up," said Commissioner Scott Metzger.

If the county were to call for a reassessment, it would not start before next year and would take approximately 24 to 26 months to conduct. Residents would receive their new value notices in 2025 for taxes due in 2026. The cost of doing an assessment is estimated at between $3.5 million and $3.6 million, Wright said. The county has 54,035 parcels that would be reassessed.

Although the commissioners discussed the need for a reassessment at this week's meeting, no decision was made.