HOLLIDAYSBURG - Blair County commissioners seem to be moving closer toward the first county property reassessment since 1958.
A year ago, commissioners balanced the 2013 budget with a 3.5 mill real estate tax increase.
For 2014, they're keeping real estate taxes at 27.495 mills by using $1.8 million in reserve funds to cover expenses exceeding revenue.
If a tax increase is needed to balance the 2015 budget, commissioners will be restricted by a 30 mill cap, the maximum general fund levy allowed by the state. And when that cap is reached, their budget-balancing options become limited.
Unlike the City of Altoona which entered the state's Act 47 distressed municipalities program when it feared the approaching inability to balance its annual budget, Blair County has no similar option.
Reassessment, however, would permit the county to evaluate and assign new values to each property, then recalculate the general fund tax levy to a lower level. But reassessment doesn't happen fast.
"To do a good job with reassessment, they're going to need about 2 to 3 years to complete the process," said Gene Porterfield, owner of Evaluator Services and Technology, a company that has performed reassessments in other counties and has advised the Blair County tax assessment office since 2007.
Another factor to be considered, Porterfield said, is that in the first budget year after reassessment is completed, the county must establish a general fund tax rate that is "revenue neutral." That means the new tax rate must generate the same revenue as the old rate.
If the county needs more money to balance its first budget after reassessment, the state allows an additional levy as long as it doesn't increase county's revenue by more than 5 percent.
So when trying to figure out a timeframe for reassessment, Porterfield said commissioners should be asking: "Are we going to have the cash flow to run our government in the meantime?"
During a November budget workshop at the Blair County Courthouse, Finance Director Robert Kuntz told commissioners they could balance the 2014 budget by using reserve funds and still have a 10 percent cash reserve. But Kuntz also cautioned that if expenses keep outpacing revenue, the county will be forced into reassessment in three to five years.
On Tuesday, the day after Judge Charles Brown Jr. of Centre County approved the county's request to levy 27.495 mills of general fund taxes to balance the 2014 budget, commissioners acknowledged that reassessment has to be considered because of the 30-mill cap.
Commissioner Diane Meling said she wants to do some research by talking with other commissioners who have been through reassessment.
"I'm hearing that some counties have done well with their reassessments," Meling said, "without the controversy like that experienced in Bedford County.
In late 2012, Bedford County wrapped up a court-ordered reassessment and its second attempt to address outdated property values. Its 2008-09 reassessment attempt brought standing-room only crowds to commissioners' meetings and generated more than 5,000 property appeals.
"It's something I don't want to do, but it is what it is," Commissioner Ted Beam Jr. said. "I think my fellow commissioners have done a great job in the last six years, trying to hold down expenses. ... But we're getting near the cap, so it's either [reassessment] or we break the county."
When Commissioner Terry Tomassetti initially ran for office, he said the county had alternatives to explore before considering reassessment.
"We've spent six years digging ourselves out of a hole and the last five years evaluating everything," Tomassetti said. "And the bottom line is that the cost of government continues to go up, and not everything is within our control. Meanwhile, we're only 21/2 mills away from the max."
Porterfield, who has seen controversy and political fallout because of reassessment, said he would be hard-pressed to recommend commissioners initiate reassessment during an election year .
The most logical time for Blair County to begin, Porterfield said, might be after the 2015 primary. That's when candidates who want to serve as county commissioner from 2016 to 2020 would be reduced to two Republicans and two Democrats. While that timeframe would make reassessment a campaign issue, reassessment has been an issue in past elections with mixed results.
Former Commissioner Barry Wright named his support for reassessment as a reason why he lost the 2007 Republican primary. But retired commissioner Donna Gority, a longtime reassessment supporter, retained her seat despite Democratic challengers who told voters they opposed it.
Tomassetti, who plans to run for re-election in 2015 for what would be his third four-year term, said he would not want to avoid the issue of reassessment during an election year.
"I think you need to be upfront with the electorate when you're dealing with tough issues," Tomassetti said.
Beam also plans to run for re-election in 2015, for what will be his second four-year term.
"If reassessment is done the right way and the public is educated as to why we are doing it, then I think the voters will be understanding," Beam said.
Meling plans to retire from her commissioner's job when her term ends in 2015. Before then, she said she want to keep working on efforts to computerize detailed property information and maps in the tax assessment office which could help reduce the cost of reassessment.
How much will it cost?
At one time, county officials estimated reassessment at a minimum of $3 million which may still be a valid estimate. Indiana County hired Porterfield's company in May to update its 1968 assessment of 48,288 parcels, at $51.77 per parcel or $2.49 million. Blair County has 62,700 parcels so at $51.77 each, the cost of reassessment would be $3.25 million.
In preparation for reassessment, Indiana County commissioners last year increased the general fund real estate tax levy to the 30 mill maximum levy and pledged to put some of the new revenue aside for reassessment.
So far, Blair County commissioners have made no commitment to reassessment nor have they taken any specific action in that direction. And if they want to pursue the option, they'll have to figure out how they'll pay the cost. A bond issue might be a possibility to minimize the financial impact over several years.
"They have a little time yet," Porterfield said, referring to the ongoing efforts in the tax assessment office to computerize detailed property tax information and maps.
"Those are things that really need to be in place before the reassessment process starts," he said.
Mirror Staff Writer Kay Stephens is at 946-7456.