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Fiist anu foiemost I must thank my paients foi theii continueu suppoit.

uuiuance anu suppoit fiom my supeivisoi, Phil Allmenuingei, have been ciucial to
the completion of this woik. Bis confiuence in my ability to take on such a ielatively
unknown topic is much appieciateu.

I am paiticulaily giateful to the chief assessois in Pennsylvania counties that
willingly anu enthusiastically assisteu with this ieseaich. I woulu also like to thank
Teu uwaitney, Kiis Feuei, the State Boaiu of Ceitifieu Real Estate Appiaiseis, anu
otheis who gieatly helpeu in the piouuction of this uisseitation.

Lastly, I must thank Rita Balpeit foi hei unwaveiing suppoit.




























4
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S
1A8LL CI CCN1LN1S
IN1kCDUC1ICN ........................................................................................................... 6
CnA1Lk 1: r|mer on Land Va|ue 1axat|on ................................................................. 8
1.1 - Philosophical Backgiounu ........................................................................................................................... 8
1.2 - Economic Theoiy of Lanu Taxation ......................................................................................................... 9
1.S - Thiee Channels of Regeneiation ............................................................................................................ 1u
1.4 - Empiiical Eviuence ...................................................................................................................................... 12
1.S - Lack of Auoption ........................................................................................................................................... 14
1.6 - Conclusion ....................................................................................................................................................... 1S
CnA1Lk 2: Assessment Methods: Current and roposed .......................................... 16
2.1 - Cuiient Issues ................................................................................................................................................ 17
2.2 - Pioposeu Nethou .......................................................................................................................................... 19
L;L;M I !2',)+.+'2 N''23 ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; MO
2.S. - Conclusion ...................................................................................................................................................... 22
CnA1Lk 3: Data and Methodo|ogy ........................................................................... 23
S.1 - Pennsylvania as a Stuuy Site .................................................................................................................... 2S
S.2 - Nethouology ................................................................................................................................................... 24
P;L;M I <'71% J'=+'6 1,2 Q9+3)+,7 R1)1 ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; LS
P;L;L I G>(='/ 1,2 !,)'(=+'63 ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; LT
S.4 - Conclusion ....................................................................................................................................................... 26
CnA1Lk 4: kesu|ts .................................................................................................... 27
4.1 - ueneial 0bseivations .................................................................................................................................. 27
4.2 - Fiequency of Reassessment ..................................................................................................................... 28
4.S - 0thei Baiiieis ................................................................................................................................................ Su
S;P;M I F)+%+3+,7 U>%% @1%>' ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; PV
S;P;L I E+70'3) 1,2 W'3) F3' ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; PM
S;P;P I Q2>-1)+4, ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; PL
S;P;P I !,.4(51)+4, ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; PP
S;P;S I X4,3>%)1)+4,3 ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; PS
S;P;T I A'-0,4%47/ ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; PT
4.4 - Conclusion ....................................................................................................................................................... S6
CnA1Lk S: D|scuss|on and Conc|us|on ...................................................................... 37
S.1 - ueneial 0bseivations .................................................................................................................................. S7
S.2 - Potential Benefits ......................................................................................................................................... S9
S.S - Conclusion ....................................................................................................................................................... 4u

8I8LICGkAn ........................................................................................................... 41







6
IN1kCDUC1ICN

0iban iegeneiation has long been a focus of public policy in the 0niteu
States. Thioughout theii histoiies, cities have enacteu countless schemes to
encouiage constiuction anu ienovation of builuings in oiuei to ietain anu
potentially inciease populations. The case foi iegeneiation, howevei, extenus
beyonu ietention of tax bases foi local goveinments. 0iban economists have long
aigueu that cities piesent economic auvantages uue to agglomeiation economies.
1

Regeneiating cities (iathei than ielocating theii populations anu economic activity)
piesents fiscal auvantages uue to the piesence of high amounts of public capital
(uaffney 2uu1, 61) anu enviionmental auvantages by ieuucing the neeu foi
ueconstiuction anu uiban spiawl (Leigh anu Patteison 2uu6, 218). Fuitheimoie,
uiban uecay unueiutilises high piouuctivity lanu wheie capital investment is moie
spatially luciative (uaffney 2uu1, 6S).
While iegeneiation has been a piioiity foi uiban aieas, the majoiity of public
schemes have faileu to uelivei wiuespieau anu sustaineu iesults. These policies,
such as gentiification anu "ienaissance" piojects, have typically involveu injections
of public funus to specifieu locations iathei than laige-scale iegeneiation. As Nancy
Leigh notes, "|wjhat we uo know about the amount of vacant uiban lanu anu
abanuoneu stiuctuies in many cities. cleaily inuicates that the cuiient set of tools
being applieu at the local level iemains ueficient" (Leigh 2uuS, 2). An alteinative
policy that has been attempteu in a few municipalities acioss the 0niteu States
ielies on utilising taxes to encouiage iegeneiation. Typically iefeiieu to as Lanu
value Taxation (LvT), the pioposeu tax falls heavily on the maiket value of lanu.
Theoietically, this encouiages owneis of high value lanu in cities to uevelop it to its
0+70'3) 1,2 &'3) >3' by penalizing unueiuse anu vacancy. Fuitheimoie, pioponents
of LvT often call foi a ieuuction in othei taxes, such as those that fall on builuings, to
pioviue fuithei incentives foi iegeneiation. As Nason uaffney notes, LvT offeis

1
Typically, the thiee souices of economic auvantages of cities aie iuentifieu as infoimation
spilloveis, non-tiaueu local inputs, anu a laige local skilleu laboui pool. See NcCann (2uu1) foi moie.
7
both a "stick" anu a "caiiot" foi uevelopment by simultaneously incieasing lanu
taxes anu uecieasing builuing taxes (uaffney 2uu1, 76).
Cuiiently, piopeity taxes in the 0.S. fall on both lanu anu builuings. Taxing
juiisuictions iely on assessments of piopeity (typically sepaiateu into lanu anu
builuing values) to ueteimine each paicel's tax bill. While the fact that lanu value is
alieauy cuiiently assesseu may suggest a ielatively easy conveision to a system of
LvT, this is not necessaiily tiue. As Belleistein anu Belleistein note, "new concepts
of piopeity as social anu political phenomenon elicit coiiesponuing changes in the
valuation...of that piopeity" (Belleistein anu Belleistein 2uuS, 9u). Since LvT
iequiies a tax to fall on maiket value, it is necessaiy foi assessments to ieflect this, a
pioposition not ensuieu unuei cuiient assessment methous. Fuitheimoie, eviuence
suggests that lanu is systematically >,2'(assesseu in many municipalities.
The puipose of this uisseitation is to ueteimine the extent to which assessois
aie piepaieu anu capable of implementing a system of lanu assessment that tiuly
ueteimines lanu's maiket value necessaiy foi LvT. The fiist chaptei intiouuces the
histoiy anu theoiy of lanu value taxation, with a paiticulai focus on its theoietical
applications to uiban iegeneiation. In auuition to theoiy, empiiical stuuies aie
uiscusseu in oiuei to stiengthen the case foi LvT as a viable tool foi iegeneiation.
The seconu chaptei aigues that cuiient assessment methous in the 0.S. aie typically
flaweu, iesulting in inaccuiate lanu values. Following theoiy anu piactice put foith
by LvT savvy assessois, a fiamewoik foi an iueal assessment methouology is
pioposeu. The thiiu chaptei intiouuces the stuuy site, Pennsylvania, along with the
ieseaich methouology employeu. In oiuei to gain a substantially thoiough answei
to the piimaiy ieseaich question, statutoiy ieview along with suiveys anu
inteiviews of county assessois weie conuucteu. The fouith chaptei piesents iesults
of the ieseaich. 0f paiticulai focus is Pennsylvania's use of the base yeai system,
which allows assessments to lag behinu maiket fluctuations. Auuitionally, iesults
peitaining to topics piesenteu in the seconu chaptei aie uiscusseu in uetail. The
final chaptei pioviues a uiscussion of the iesults, iuentifying key stiengths anu
weaknesses of assessment methous anu potential futuie uevelopments.
8
CnA1Lk 1
r|mer on Land Va|ue 1axat|on

Befoie uiscussing pioposeu changes to ieal piopeity assessments, a
thoiough unueistanuing of lanu value taxation (LvT) must be obtaineu. Without a
giasp on the puipose anu natuie of iefoim, the neeu foi alteinative assessment
methous woulu be ill unueistoou. This chaptei attempts to set the stage foi the iest
of the uisseitation by pioviuing a compiehensive, albeit biief, oveiview of LvT.
The fiist section of this chaptei intiouuces the philosophical unueipinnings
of LvT, tiacing the iuea fiom its oiigins in classical economics to the moie foimal
pioposal maue by economist Beniy ueoige. The seconu anu thiiu sections explain
moie iecent auvances in the theoiy of LvT, paiticulaily how it can be uiiectly linkeu
to uiban iegeneiation thiough thiee main avenues: encouiaging intensive use of
high value lanu; self-financing of public infiastiuctuie; anu ieuuceu ieliance on
othei uistoitionaiy taxes. The fouith section piesents empiiical finuings of LvT that
auuiess issues of uiban iegeneiation. The final section uiscusses baiiieis to
implementation. While both the theoiy anu empiiical iesults aie iathei compelling,
theie has nevei been wiuespieau auoption of LvT at any point in Ameiican histoiy.
This section necessaiily focuses on a ciitique of neoclassical economics anu its
tieatment of lanu as non-uistinct fiom capital.
1.1 - h||osoph|ca| 8ackground
Aiguably the best explanation of the puipose anu scope of lanu value
taxation was put foith by Beniy ueoige in his seminal text, H(47('33 1,2 H4='()/.
2

ueoige, a self-taught economist, spent most of his youth tiaveling the woilu uuiing
the heyuay of the inuustiial ievolution. Thioughout this peiiou of iapiu economic
giowth, ueoige noticeu that piospeiity was always coupleu with uestitute poveity
(Basseu 2u12). Thiough (Ricaiuian) economic analysis, ueoige "tiace|uj the
pioblem of 'piogiess anu poveity' to the institution of piivate piopeity in lanu"

2
0iiginally publisheu in 1879.
9
(Feuei 1994, 12S). The solution to poveity, theiefoie, was to abolish piivate lanu
holuing by instituting a tax on its full iental value (i.e. the annual income stieam
attiibutable to lanu).
While ueoige is histoiically iegaiueu as the fathei of lanu ient taxation, his
opposition against piivatiseu lanu gains was ceitainly not unique, with eailiei
classical economists setting the stage.
S
Both Auam Smith anu }.S. Nill iecogniseu
that ient, unlike wages anu inteiest, is not the piouuct of effoit on any pait of the
lanuownei; iathei, natuie anu community effoit aie what ueteimine lanu value
(Smith 199S, 1SS; Nill 196S, 416, 428-429). ueoige simply took these classical
founuations of ient fuithei to auvocate lanu taxation. Be felt that because lanu value
is the piouuct of natuie, goveinment (by seivicing anu piotecting it), anu locational
uemanu, it is "the piouuct of outsiue foices anu theiefoie a fit object of taxation"
(uaffney 1998, 17S). Fuitheimoie, ueoige iepeateuly asseiteu that piivately helu
lanu ient was akin to stealing (ueoige 1966, 128; ueoige 1999, 169-171; ueoige
1877; ueoige 1889), anu auvocateu common owneiship as a iemeuy foi this
injustice. It is impoitant to note that ueoige uistinguisheu between the >3' of lanu
anu the (',) of lanu. To abolish piivate >3' of lanu woulu be unjust, as it "is as cleai
as theii equal iight to bieathe the aii" (Foluvaiy 1999, 19S). Abolishing piivately
helu (',) thiough taxation, howevei, confoims to the natuial iight of each peison to
shaie commonly cieateu gains (Foluvaiy 1999, 19S). Taxing othei souices of value
(such as wages anu capital) woulu not only uiscouiage laboui anu investment, but
woulu also be unjust uue to theii being piouuct of +,2+=+2>1% effoits.
1.2 - Lconom|c 1heory of Land 1axat|on
Typically, when a factoi such as laboui oi capital is taxeu, less will be useu in
oiuei to avoiu the tax, piouucing ueauweight loss to society thiough uisincentive
effects. Lanu, howevei, is fixeu in supply anu can be neithei piouuceu noi uestioyeu
in ieaction to a tax. Because of this, theie is no ueauweight loss when ient is taxeu

S
Accoiuing to Baniel Bollanu, the "founuing fatheis" of economics weie engageu in "wiiting
ievolutionaiy tiacts against a lanuholuing class" (Bollanu 197u, 4), while Buuson goes fuithei to
claim "coiiecting such stiuctuial anu institutional uefects, paiasitism anu piivilege seeking 'fiee
lunches' is what classical political economy was all about" (Buuson 2u12).
1u
(Bunne 2uuS; Baiiss 1999, 1u1; Cohen anu Coughlin 2uuS, S64-S6S). Thus, LvT
achieves both equity (see uiscussion above) 1,2 efficiency, a pioposition unheaiu of
in the neoclassical economic paiauigm. Auuitionally, because lanu, unlike capital
anu laboui, is completely immobile anu geneially inconcealable, the tax cannot be
evaueu oi avoiueu (Bunne 2uuS), pioviuing a stable souice of public ievenue.
Cuiiently in the 0niteu States lanu is taxeu, but only in pait (i.e. not at its full
maiket value). When ieal piopeity is taxeu, typically the same tax iate is applieu to
the assesseu value of the lanu
4
as well as capital impiovements on it (Cohen anu
Coughlin 2uuS, SS9). Thus, while lanu is taxeu, it is always paiieu with a tax on
capital. This causes the cuiient piopeity tax to fall shoit of the potential efficiency
outcomes of a puie lanu value tax. When a tax falls on capital impiovements, it
follows that less capital will be expenueu upon lanu, thus uisincentivising
uevelopment (Bollanu 197u, 6). In fact, new, economically anu socially beneficial
builuings aie taxeu moie heavily than olu, potentially uestiuctive builuings (uue to
highei assesseu values), pioviuing fuithei baiiieis foi uevelopment anu
iegeneiation (Baiiss 1999, 1uS). Auuitionally, cuiient piopeity taxes tenu to tax
lanu baseu on its assesseu cuiient use
S
while maiket value is ueteimineu by 0+70'3)
1,2 &'3) >3' (Bunne 2uuS). Because of these issues, it is funuamentally necessaiy to
uistinguish cuiient piopeity tax iegimes in the 0S fiom LvT.
1.3 - 1hree Channe|s of kegenerat|on
While ueoige intiouuceu anu populaiiseu the use of LvT as a just anu
efficient means of collecting public ievenue, he was mainly focuseu on the ethics of
collecting lanu ient iathei than its positive iegeneiative effects. Bowevei, his theoiy
still emphasiseu the impoitance of "scale economies, exteinalities, anu goveinment
seivices in giving value to ceitain lanus" (Feuei 1994, 127), with the majoiity of
lanu ient lougeu in the cities uue to high populations anu public capital expenuituie
(Batt 2uu2). uiven this, the potential foi LvT to be useu as a policy tool foi uiban
iegeneiation has been exploieu anu elaboiateu by pioponents of ueoige's woik.

4
Wheie lanu value (i.e. the piice at which lanu woulu be solu) is capitaliseu iental value.
S
This is uiscusseu fuithei in the following chaptei.
11
The fiist anu most fiequently uiscusseu way in which LvT can spui
iegeneiation is by pioviuing uiiect incentives to uevelop lanu to its 0+70'3) 1,2 &'3)
>3'. Because LvT falls on lanu's maiket value (i.e. not baseu on its cuiient use), "the
ownei will use it haiuei anu impiove it moie to meet the fixeu tax" (uaffney 2uu1,
7S). The tax will not inciease oi ueciease baseu on what sits on the lanu,
encouiaging owneis of high value sites to use them moie intensively (Batt 2uu7). If
owneis cannot oi will not uevelop to meet the tax, they woulu be foiceu to biing it
to maiket (Bunne 2uuS, 4). This effect woulu significantly ieuuce the amount of
vacant oi unueiutiliseu sites, anu auuitionally ieuuce incentives foi speculating on
high value lanu neai uiban centeis (Feuei 1994, 144; Bicks 197u, 16; Leigh 2uuS,
12).
Seconuly, LvT pioviues an efficient way of financing public infiastiuctuie
without uiiving away potential investment. By taxing the ient of lanu (which is
immobile), a municipality is able to finance public seivices without ielying on
uistoitionaiy taxes on capital oi laboui (uaffney 1994, 41-42). When infiastiuctuie
is installeu, lanu neaiby will be able to commanu highei ient; taxing lanu pioviues a
way to iecaptuie value cieateu by the public (Leigh 2uuS, 12; Bunne 2uuS, 4).
Fuitheimoie, Kiis Feuei notes that if LvT weie in place, municipalities coulu
incluue piojecteu gains fiom taxation in cost-benefit analysis, leauing to incieaseu
financial viability when evaluating infiastiuctuie piojects (Feuei 1994, 14S-146).
Finally, since LvT is non-uistoitionaiy anu pioviues a way to efficiently
finance public expenuituie, it follows that othei, moie uistoitionaiy taxes can be
ieuuceu. Biscussions of LvT aie often tightly coupleu with a ieuuction of taxes on
builuings (uaffney 1968, 2SS; uaffney 2uu1, 74); this is piecisely what split-iate
mouifications to cuiient piopeity taxes (a ueiivative foim of LvT) uo by iaising tax
iates on lanu anu loweiing tax iates on builuings. If taxes on capital impiovements
weie ieuuceu oi iemoveu, the uisincentive of maintaining anu upuating builuings
woulu be ieuuceu, thus encouiaging fiequent anu timely ienewal. Fuitheimoie, it is
often claimeu that ievenue fiom LvT woulu be laige enough to ieuuce taxes beyonu
those on builuings, with ieuuctions possible on othei foims of capital anu laboui
(Cohen anu Coughlin 2uuS, S6S-S66). Even if ievenues weie to iemain neutial, "the
12
tax buiuen is effectively loweieu because of |aj uecline in BWL |ueauweight lossj"
fiom iemoving uistoitionaiy taxes (Cohen anu Coughlin 2uuS, S6S). Thus, LvT
fuithei piomotes iegeneiation by allowing foi ieuuceu ieliance on taxes that
uiscouiage investment anu laboui.
1.4 - Lmp|r|ca| Lv|dence
The theoiy uiscusseu above is iathei compelling, especially when vieweu in
gieatei uepth than can be pioviueu heie. Bowevei, some ciitics question the
impoitance of piopeity taxes anu whethei oi not a shift to LvT woulu pioviue
stiong iegeneiative incentives (Bellman 1987). Implementing a system of LvT
woulu unuoubteuly iequiie a gieat amount of political will (Feuei 1994, 1S7), so it
is impoitant to ueteimine whethei oi not the expecteu theoietical gains aie
woithwhile. Foitunately, theie have been some applications of LvT (anu split-iate
taxation) that pioviue an oppoitunity foi empiiical analysis.
6
The finuings of majoi
stuuies aie highlighteu below.
,&3&/&#*'4$/ - The iegeneiative effects of LvT aie peihaps best uiscusseu in
two lanumaik stuuies: Plassmann anu Tiueman (2uuu) anu 0ates anu Schwab
(1997). Plassmann anu Tiueman compaie levels of constiuction in 1S PA
municipalities that enacteu split-iate taxation (a ueiivative of LvT) with 2u4 that
tax lanu anu builuings at the same iate anu founu "cities that have auopteu a two-
iate tax actually enjoy significantly highei levels of constiuction activity"
(Plassmann anu Tiueman 2uuu, 217). 0ates anu Schwab examine the effect of
Pittsbuigh's inciease in the iatio of lanu taxes to builuing taxes fiom 1979-1994 anu
finu that while iegeneiation have been causeu by confounuing factois, incieasing
lanu taxes "allow|euj the city to avoiu ieliance on othei taxes that can unueimine
uiban uevelopment" (0ates anu Schwab 1997, 21). Auuitionally, Coiu (2uu2) founu
that aftei Pittsbuigh iescinueu it split-iate tax in 2uu1, a 19.S7% uecline in piivate
new constiuction occuiieu in the following thiee yeais (Coiu 2uu2).

6
Nost empiiical stuuies have shown positive iesults. A liteiatuie seaich of ovei 2uu empiiical
stuuies conceining lanu value taxation ievealeu theie has "nevei been.an LvT juiisuiction that uiu
not inciease constiuction anu ienovation aftei its LvT auoption, anu moie impoitantly, uiu not out-
constiuct anu out ienovate is compaiable non-LvT neighbois" (Coiu 2uu2; vincent 2u1u, 11).
1S
A--&B'9 $/ C$.&$>/&#9 - The Centei foi the Stuuy of Economics ian a
ievenue neutial simulation of split-iate taxation baseu on cuiient assessment uata
foi Philauelphia, anu founu that 8u% of homeowneis woulu expeiience a ueciease
in taxes (with the loss being offset by incieaseu taxes on vacant lanu) (Centei foi the
Stuuy of Economics 2uu9). When assessoi Teu uwaitney mouifieu assessments in
Southfielu, NI so they weie moie in line with the economic goals of LvT (uiscusseu
moie in the following chaptei), "taxes on aveiage homeowneis weie immeuiately
ieuuceu 22 peicent" (Rybeck 2uuu, 16S). Fuitheimoie, Coiu founu that S4% of
homeowneis expeiienceu an inciease in taxes aftei Pittsbuigh iescinueu split-iate
taxation (Coiu 2uu2). While the above iesults may seem counteiintuitive, uaffney
explains that these ieuuctions aie expeiienceu because of the fact that most uiban
lanu is concentiateu in owneiship; these laige lanuholueis expeiience incieases in
taxes, while homeowneis (who tenu to have highei aveiage capitallanu value iatio
on smallei paicels) expeiience a ieuuction (uaffney 2uu1, 6S).
:*B#$ A--&B'9 - A stuuy by Ainolu (2uu8) examineu a panel of 21 0ECB
countiies anu founu that incieaseu ieliance on piopeity taxes, "paiticulaily
iecuiient taxes on immovable piopeity.appeai to be associateu with the highest
levels of uBP pei capita (Ainolu 2uu8, 6). As explaineu above, lanu is unuoubteuly
the "most immovable" foim of piopeity, consiueiing it is completely immobile.
"?2;4B D4/*/B& - Eviuence fiom heuonic moueling of lanu values pioviues
insight foi the possibility of self-financing infiastiuctuie. In 0hio, engineei Aithui
Noigan estimateu the assesseu benefits of floou piotection on lanu value by
examining 77,uuu paicels along 11u miles of iivei valley. Be founu that total
benefits exceeueu $1uu million, "moie than thiee times the cost of the floou
piotection pioject" (Rybeck 2uuu, 1SS). Similaily, when the }ubilee Line Extension
was installeu in Lonuon, a TfL commissioneu iepoit founu that lanu values neai the
Canaiy Whaif anu Southwaik tube stations alone iose by appioximately 2.8 billion
(Naxwell anu vigoi 2uuS, S). These iesults suggest that taxing lanu gains fiom
infiastiuctuie piojects can moie than compensate foi initial outlays.
14
1.S - Lack of Adopt|on
While it has been shown that both theoietically anu empiiically, LvT is
geneially attiactive, one cannot help but wonuei why it hasn't been auopteu on a
laige scale. Foi example, only foui 0S states have even consiueieu using LvT (Leigh
2uuS, SS). Nany wiiteis have uiscusseu the fact that it woulu significantly ieuuce
the gains of a poweiful lanuholuing class, causing a systematic avoiuance of its
auoption (Bughes 2uu6, S; Baiiison 1994, 7-9; Cohen anu Coughlin 2uuS, S72).
Some feel this has leu to an 1 :(+4(+ iejection of LvT within the economics
community, uespite it's being theoietically iobust (Feuei 1994; Baiiison 1994).
Nason uaffney suggests a fai gieatei conspiiacy by claiming that the veiy
piolifeiation of neoclassical economics was in uiiect opposition to ueoige's
pioposals. Be claims that the stunning populaiity of ueoige piesenteu a tangible
pioblem foi the lanueu class, anu neoclassical economics (with its conflation of lanu
anu capital as economically inuistinguishable) attempteu to uiscieuit ueoige's
pioposition that taxing lanu ient was both just anu efficient (Baiiison 1994, 1S;
uaffney 1994, 29-46). The full histoiy outlineu by uaffney in not iepiouuceu heie,
but his oveiall case is quite uetaileu anu compelling, pioviuing gieat insight as to
why ueoigism has been effectively eiaseu fiom the public conscious.
Fiom a moie piactical peispective, one of the most uaunting pieces of
eviuence against LvT is Pittsbuigh's 2uu1 iescission of split-iate taxation. If LvT is
so successful, then why woulu a municipality ueciue to ietuin to tiauitional
piopeity taxation. Nany theoiies as to why this occuiieu have emeigeu: geneial
misinfoimation of benefits to homeowneis (Coiu 2uu2); confusion among voteis of
the uiffeience in tax iates unuei split-iate taxation (Baicousky 2u12); anu eventual
ieassessment of lanu value cieating gieatei than expecteu tax bills foi homeowneis
(Bughes 2uu6, 1S-14). While all of these issues aie palpable enough to pioviue a
baiiiei to LvT implementation, gieatei unueistanuing of the benefits of LvT
(paiticulaily to homeowneis) coulu have pieventeu its ievocation. Auuitionally, as
will be uiscusseu latei, coiiecting assessments piioi to implementing LvT (anu not
1S
uuiing its tenuie as in Pittsbuigh) coulu help ease in the piogiam, making it moie
palatable.
1.6 - Conc|us|on
The puipose of this chaptei was to give the ieauei a soliu unueistanuing of
LvT as it ielates to this pioject, paiticulaily with iespect to the issue of uiban
iegeneiation. The philosophical founuations, theoietical extensions, anu empiiical
eviuence of LvT weie piesenteu in oiuei to give gieatei context to the iemainuei of
the uisseitation. While this chaptei intiouuceu anu elaboiateu on some of the
uiscussions conceining LvT, it is by no means exhaustive of its potential effects anu
benefits.
















16
CnA1Lk 2
Assessment Methods: Current and roposed

An iueal system of LvT (as pioposeu by ueoige) woulu uiiectly tax annual
lanu ient; howevei, the following uiscussion focuses on the moie likely
implementation of a foim of LvT that taxes lanu value.
7
uiven that LvT ielies on the
tiue maiket value of lanu to uelivei its theoietical benefits, accuiate assessment is
essential. Even if a city weie to implement LvT (oi a ueiivative split-iate tax), if lanu
is inaccuiately assesseu, they will "collect moie lanu values in name but less +,
3>&3)1,-'" (Rybeck 2uuu, 164).
8
While the neeu foi coiiect assessment may seem
obvious anu ielatively easy to achieve, theie has been skepticism about its
piacticality, which has been useu to uiscieuit LvT in geneial. A majoi issue with
assessing lanu foi the puiposes of LvT is that alieauy impioveu lots must be tieateu
as though they aie unimpioveu to ensuie 51(8') =1%>' anu not ->((',) >3' =1%>' is
ueteimineu (vickiey 197u, 2S-26). Auuitionally, ciitics cite the high cost of
maintaining a lanu iegistiy (Bunne 2uuS, 4) anu issues in sepaiating builuing values
fiom lanu values (Batt 2uu7) as impeuiments accuiate lanu assessment.
Inueeu, histoiy suggests that the ciitics have valiu aiguments. An attempt to
measuie the "inuestiuctible poweis of the soil" was uone in Inuia in the 18Sus, anu
the Libeial Paity in Englanu attempteu to "measuie the full potential of baie-site
value, site by site" in 1888 (Bicks 197u, 12-1S). Both of these attempts weie
abanuoneu uue to auministiative buiuen; howevei, this uoes not mean accuiate
lanu assessments aie infeasible )421/. Nuch auvancement in piactice has occuiieu,
anu assessois have begun to auuiess auministiative pioblems associateu with
implementing a lanu value tax (Bollanu 197u, 8).

7
This is baseu on the fact that cuiient piopeity taxes fall on value (not ient), easing auministiative
tiansition to LvT, anu geneial issues with accuiately ueteimining annual lanu ient (see Tiueman
1991 foi full uiscussion). Regaiuless, a tax on value inevitably falls on ient given that value is simply
capitaliseu ient.
8
Foi example, even though the pievious chaptei showeu positive iesults with iespect to LvT anu
split-iate tax implementation, iueally, accuiate assessments in conjunction with LvT woulu piouuce
the most theoietically optimal iesults iuentifieu in Chaptei 1 (Rybeck 2uuu, 16S).
17
This chaptei attempts to pioviue the case foi alteinative methous anu seives
as the basis foi the main ieseaich question of this pioject. The fiist section outlines
common pioblems with cuiient assessment methous, specifically lanu-iesiuual
techniques. Section 2 pioviues a compiehensive oveiview of alteinative assessment
methous anu the necessaiy iequiiements to implement such a system baseu on
pioneeiing woik of assessois that piomote LvT.
2.1 - Current Issues
Nost piopeity assessois in the 0S aie iequiieu to pioviue both lanu anu
builuing values when iepoiting ieal piopeity assessments (Back 197u, S7; Bye anu
Englanu 2u1u, 2S). While theie is a geneial piesumption that both of these values
aie to be as accuiate as possible, this is often not the case. As Bye anu Englanu point
out, "local assessois have little ieason to expenu iesouices assessing those two
values accuiately.they simply neeu to assess the )4)1% values of piopeities with
ieasonable caie" (Bye anu Englanu 2u1u, 2S). Some have even claimeu that, given
equal tax iates on builuings anu lanu unuei the tiauitional piopeity tax, values
attiibuteu to lanu anu builuings aie uone aibitiaiily (Bicks 197u, 1S). This may not
significantly affect incentives unuei cuiient piopeity taxes, but potential uistoitions
woulu be magnifieu if a two-iate system with highei tax iates on lanu weie auopteu
(Bicks 197u, 1S-16; ueiman et. al. 2uuu). This is especially tiue if lanu values aie
systematically unueiassesseu ielative to builuing values, uecieasing the positive
effects of a highei tax on lanu value.
0ne of the most common objections to assessment piactices is the
wiuespieau use of the "lanu-iesiuual" methou, which subtiacts ieconstiuction cost
of builuings fiom total value to ueteimine site value (Batt 2uu7). Nason uaffney
points out the geneial fallacy of using such a methou:
0n most assessment iolls the value of olu 'junkei'
builuings, on the eve of uemolition, is listeu as highei
than the lanu unuei them. This betiays the eiioneous
use of the 'lanu iesiuual' methou of sepaiating lanu
fiom builuing values. It shoulu be obvious that the olu
junkei has no iesiuual value: that is why it is being
junkeu (uaffney 2uu4).
18
Fiom the quotation above, it is cleai that lanu is assesseu baseu on its cuiient use,
not it's 0+70'3) 1,2 &'3) >3'. This piesents a significant pioblem foi LvT
implementation; in oiuei foi LvT to be tiuly effective anu pioviue non-uistoitionaiy
outcomes, lanu value must be assesseu at its maiket value, which is inuepenuent of
its cuiient use (uaffney 1968, 2S4; Tiueman 1996, 6uu).
Fuitheimoie, Buuson explains that when assessing the value of lanu in the
0S, the Feueial Reseive's use of the lanu-iesiuual methou uoes not allow foi lanu
value to iise, anu the "implication is that when a piopeity is solu at a highei piices
(which usually happens), it is because the builuing itself has iisen in value, not the
lanu site" (Buuson 2uu1). While it is possible foi ceitain types of builuings to iise in
value uue to iuiosynciatic uemanu shocks, it is much moie likely that site value has
incieaseu uue to iise in locational uemanu. The absuiuity of this methou is
highlighteu by the fact that in 199S, the Feueial Reseive attiibuteu a negative value
to aggiegate 0S lanu (Buuson 2uu1).
The ieliance on such methous has leu to a systematic unueiassessment of
lanu, mainly uue to an oveiemphasis on builuing value common among assessois
(Back 197u, 48). When Teu uwaitney ieassesseu lanu values in uieenwich, CT, the
lanu value piopoition of total site value was 71 peicent (Batt 2uu7); in the past only
SS% of piopeity values weie attiibutable to lanu.
9
Kenneth Back uesciibes a
ieassessment of piopeity values in Washington B.C., which iesulteu in the iatio of
lanu value to total value to iise fiom S4.S peicent to 4S.S peicent (Back 197u, Su-
S1). Rybeck explains how ieassessment of lanu values in Rosslyn, vA gieatly
incieaseu lanu values, subsequently leauing to iapiu uevelopment of the aiea
(Rybeck 2uuu, 161-162). When Pittsbuigh conuucteu a countywiue ieassessment in
2uu1, ueoige Bonatello, the opeiations managei of the fiim iesponsible foi
ieassessment, claimeu "people in the past kept lanu values low, aitificially low,"
possibly uue to the split-iate tax stiuctuie (Bughes 2uu6, 14).

9
Statistic ietiieveu fiom email coiiesponuence with uwaitney.
19
The ieasons foi why lanu values aie systematically unueiassasseu aie
numeious. The benefit of unueiassesseu values to laige lanuholueis
1u
anu split-iate
taxation's own incentives foi unueivaluing lanu both contiibute to a tenuency to
keep taxable lanu values low. Regaiuless of the piecise motives, assuming that
assesseu lanu values aie accuiate ieflections of maiket values necessaiy foi LvT
simply cannot be uone.
2.2 - roposed Method
While assessments of lanu value aie typically inaccuiate anu unueiestimateu,
this uoes not mean accuiate assessment is impossible. 0ne of the most uiscusseu
methous by LvT pioponents is baseu on sales compaiisons using heuonic
iegiession techniques. If theie aie accuiate sales uata available (of vacant lots) as
well as sufficient uata on lanu value-ueteimining factois (locational, planning
ielateu, social, economic), any inuiviuual site's value can be ueteimineu by
compaiison with sample maiket values (Back 197u, S9-42; uwaitney 1999).
11

0tilising computei baseu assessment iolls, lanu values can be upuateu fiequently
anu accuiately as new salesvalue ueteimination uata becomes available (uwaitney
197u, 12S). This appioach pioviues the most accuiate lanu assessments because
they aie ueteimineu +,2':',2',)%/ of builuings anu aie baseu on an aiiay of
vaiiables that affect value, ensuiing that assessments aie not simply baseu on
cuiient use thiough ieliance on iesiuual methous.
2.2.1 - Ident|f|ed Needs
The methou uiscusseu above has been utiliseu in vaiious juiisuictions such
as Southfielu, NI, uieenwich, CT, anu Lucas County, 0B, speaiheaueu by the woik of
assessois Teu uwaitney anu }eiome ueiman. Baseu on theii methouology anu the

1u
Foi example, even if lanu value is unueiassesseu at the cost of oveiassesseu builuing values
builuings can be uepieciateu anu thus caiiy a lowei tax buiuen (Buuson 2uu1; uaffney 197u, 174).
11
While vacant lot sales aie necessaiy foi this methou to be useu accuiately, Teu uwaitney gieatly
incieaseu his sample size in uieenwich, CT by incluuing piopeities that weie shoitly uemolisheu
aftei sale, inuicating that full piopeity value is at least equivalent to vacant site value (uwaitney
2u1u). This is also suggesteu by ueiman anu colleagues (2uuu).
2u
wiiting of othei theoiists, the auministiative anu legal neeus foi such a system to be
implementeu aie iuentifieu below.
"$'&/'4*; E*;?& - The necessity foi lanu to be assesseu at its 0+70'3) 1,2 &'3)
>3' has alieauy been uiscusseu above (vickiey 197u, 2S-26). Nany times, zoning
iestiictions anu othei tempoiaiy baiiieis to 0+70'3) 1,2 &'3) >3' cause assessments
to be below full potential value; this can be mitigateu by having assessois consiuei
anu anticipate changes in legalplanning coues that woulu affect value (Bicks 197u,
21-22). While these iestiictions inueeu limit uevelopment to 0+70'3) 1,2 &'3) >3',
oftentimes the maiket uoes not believe that legal iestiictions on lanu use will
pievail (pioviuing the oppoitunity foi speculation), inuicating that lanu is assesseu
below its )(>' potential value (uaffney 2uu4).
D#&F?&/' 1%0*'4/3 - Since lanu values aie paiticulaily sensitive anu tenu to
iise anu fall fiequently, it follows that assessments shoulu be upuateu fiequently
(Naxwell anu vigoi 2uuS, 9; Bicks 197u, 16; uwaitney 1999; Batt 2uu7). Lanu value
tenus to iise eveiy yeai at a iate gieatei than inflation, anu failuie to fiequently
upuate assesseu values is effectively a foim of unueiassessment that impeues the
full benefits of LvT fiom being expeiienceu (uwaitney 1999). Auuitionally, Webei
anu colleagues founu that as time between countywiue assessments incieases,
county piopeity tax inequities inciease uue to heteiogeneity in lanu value changes
within taxing juiisuictions (Webei et. al. 2u1u, S).
1'4;494/3 D?;; E*;?& - Nany states thioughout the 0S allowing taxing
juiisuictions to utilise only a piopoition of assesseu value. Not only uoes this
unueimine the uegiee to which the tax falls on the tiue maiket value of lanu, but as
Nason uaffney notes, it fuithei unueiassesses the value of lanu foi tax puiposes
(uaffney 2uu4).
A0?B*'4$/*; G&&09 - A piopei methou foi accuiately assessing the tiue
maiket value of lanu iequiies assessois to have an auvanceu unueistanuing of
statistical methous such as heuonic iegiession. If the assessoi is not piopeily
tiaineu, estimation eiiois will occui anu uetiact fiom ieaching the goals of LvT
(Webei et. al. 2u1u, S). Accoiuing to testaments fiom foimei assessois, the
knowleuge of puiely lanu focuseu assessment methous is geneially lacking, with
21
veiy few assessois possessing the necessaiy statistical anu economic backgiounu to
piopeily implement such a system (Back 197u, 48; Beach 197u, 9u).
H/-$#.*'4$/ ,&F?4#&.&/'9 - If any heuonic methou foi valuing lanu is to be
implementeu, uata on vaiiables that can affect site value must be obtaineu anu
upuateu fiequently (Beach 197u; uwaitney 1999). These uata can be collecteu fiom
a vaiiety of souices (ieal estate agents, othei goveinment agencies, etc.), anu shoulu
be available to the assessoi in a single, easy to upuate uatabase (uwaitney 1999).
I$/9?;'*'4$/9 - uwaitney notes the impoitance of assessois to inteiact with
anu listen to local stakeholueis anu community membeis when assessing lanu
values, mainly because they have an inheient unueistanuing of local maikets foi
lanu (uwaitney 1999). Auuitionally, since lanu value assessments aie likely to be
contentious (as all assessments aie), fiequent inteiaction with the public to explain
methouology anu iesults must occui (ueiman et. al. 2uuu). This is echoeu by Bye
anu Englanu (2u1u, 27), who claim that misunueistanuing of methouology
contiibuteu to Pittsbuigh's iescission of split-iate taxation following a countywiue
ieassessment.
)&B6/$;$3( - one of the most fiequently uiscusseu factois of new methous is
the use of new technology in geneiating anu upuating accuiate assessments. As
}eiome ueiman notes, "the uevelopment of computeiizeu uIS has peimisseu
assessois to uevelop location-baseu piopeity iecoius oi cauasties, anu to
cooiuinate sales uata with location" (ueiman et. al., 2uuu). 0sing uIS anu Computei
Assisteu Nass Appiaisal (CANA) systems allows foi ielatively easy cieation anu
coiiection of lanu assessments that aie ueteimineu by locational factois.
Auuitionally, cieating lanu value maps can assist in tiacking changes in lanu value
anu value ueteimining factois foi each anu eveiy paicel. (Beach 197u, 8S). Lanu
value maps aie seen as so impoitant by the LvT piivy assessois that Bonalu Beach
claims "if a lanu appiaisei oi assessoi evei obtains a ciystal ball to constantly keep
pace with the maiket, it will piobably be a goou set of lanu value maps" (Beach
197u, 91).
22
2.3. - Conc|us|on
The puipose of this chaptei was to outline the neeu foi lanu assessments to
be in line with the goals of LvT. While cuiient issues weie iuentifieu, the question
iemains whethei oi not it is possible to implement iueal assessment methouology in
the 0niteu States beyonu isolateu cases. In 197u, Baniel Bollanu claimeu that
assessois hau begun to think about issues ielating to implementing lanu value
taxation (Bollanu 197u, 8). By uoing a thoiough "assessment" of assessois, baiiieis
to implementing the iueal system uiscusseu above can be iuentifieu, anu it can be
ueteimineu how poiseu assessment offices aie to making necessaiy changes.


















2S
CnA1Lk 3
Data and Methodo|ogy
3.1 - ennsy|van|a as a Study S|te
The iueal pioject woulu attempt to pioviue an analysis of assessment
piactices acioss the 0niteu States. Bowevei, this is not possible foi a multituue of
ieasons, namely time anu cost constiaints. While assessment anu subsequent
piopeity taxation aie uone in eveiy state, they aie not collecteu at the feueial level
(uoveinoi's Centei foi Local uoveinment Seivices 2uu4). Each state sets its own
assessment laws, with counties anu smallei municipal bouies commonly caiiying
out actual assessments (Webei et. al. 2u1u, S). uiven the gieat heteiogeneity in
assessment piactices anu laws in the 0niteu States, it is outsiue the scope of this
pioject to take on such a compiehensive task. Thus, this pioject focuses on a case
stuuy of Pennsylvania. Locateu in the Noitheast 0niteu States, Pennsylvania exhibits
a balanceu mix of laige cities (paiticulaily Pittsbuigh anu Philauelphia) anu
agiicultuial lanu,
12
iequiiing assessment of a uiveise aiiay of lanu types. It is
composeu of 67 counties, each of which has an assessment office iesponsible foi
estimating piopeity values foi taxation.
Pennsylvania offeis a paiticulaily inteiesting case in that it has a histoiy of
split-iate taxation (a ueiivative of LvT). 0nlike othei states, counties anu
municipalities in Pennsylvania have state legal authoiity to implement split-iate
taxation
1S
(Leigh 2uuS, 11; Bye anu Englanu 2u1u, 18). Aiounu 2u Pennsylvania
juiisuictions have implementeu split-iate piopeity taxes thioughout theii histoiy,
with some continuing to use the system at the time of wiiting (Baitzok 1997). Fiom
a policy leaining peispective, the implementation of alteinative tax systems -
ueciueu by a uiffeient authoiity than assessment boaius
14
- may help infoim
inuiviuual counties on iequiiements foi implementing an optimal-outcome

12
Agiicultuie is iuentifieu as a "key economic uiivei" foi the state (PBA 2u12).
1S
The ueneial Assembly of Pennsylvania, Senate Bill No. 211, (1997).
14
Piopeity tax iates aie set anu collecteu each yeai by appiopiiate taxing uistiicts - the county,
municipality (township, boiough, oi city), anu school uistiict (0'Biien 2uu7).
24
piouucing tax system. This follows Ball's conception of policy leaining, wheie
leaining is uefineu as a "uelibeiate attempt to aujust the goals oi techniques of
policy in the light of the consequences of past policy anu new infoimation as to
bettei attain the ultimate objects of goveinance" (Ball 1988, quoteu in Bennett anu
Bowlett 1992, 276). Thus, counties may be moie piivy to changing assessment
piactices to complement tax policy implementeu by othei goveinmental bouies,
making Pennsylvania paiticulaily inteiesting foi this pioject.
3.2 - Methodo|ogy
An iueal system of lanu assessment foi LvT is composeu of many paits, anu
thus a compiehensive ieview of assessment piactices must be taken fiom both a
legal anu piactical point of view. uiven this, a multituue of ieseaich methouologies
weie employeu, specifically statutoiy ieview, suiveys, anu supplementaiy
inteiviews.
3.2.1 - Lega| kev|ew and Lx|st|ng Data
An analysis of assessment methous woulu not be complete without viewing
appiopiiate statutes. In Pennsylvania, each county is subject to the ueneial County
Assessment Law (uCAL), which sets out the geneial legal stipulations foi piopeity
assessment foi all Pennsylvania counties (PLCu 2uu7). Subsequent sections of
assessment law pioviue fuithei guiuance foi uistinct "classes" of counties
1S

(uoveinoi's Centei foi Local uoveinment Seivices 2uu4). While each county is
bounu to have its assessment piactices in line with the uCAL anu any class specific
statutes, theie is still flexibility in how counties conuuct assessments. Foi example,
counties still set base yeai calculations, pieueteimineu iatios, anu peimissible
assessment methous
16
(PLCu 2uu7; 0'Biien 2uu7; uoveinoi's Centei foi Local
uoveinment Seivices 2uu4; Legislative Buuget anu Finance Committee S1). uiven
the fact that assessment coues vaiy acioss the state, a thoiough ieview of
Pennsylvania assessment law (mainly statutoiy, supplementeu with peitinent case
law) was conuucteu in oiuei to gain a compiehensive view of paiticulai legal issues.

1S
Class cohoit is ueteimineu by population.
16
These issues anu teims aie uiscusseu fuithei in the following chaptei.
2S
Auuitionally, existing uata on assessments pioviueu by Pennsylvania's State Tax
Equalization Boaiu (STEB) anu pievious ieseaich conuucteu by the Pennsylvania
Legislative Buuget anu Finance Committee weie also examineu.
3.2.2 - Survey and Interv|ews
In oiuei to ueteimine the piacticality of changes being tiuly implementeu, an
investigation beyonu simple statutoiy coues was necessaiy. Since assessments foi
the state of Pennsylvania aie not peifoimeu centially, theie is unueistanuably
heteiogeneity in piactice in each county. Baseu on this heteiogeneity, a suivey anu
supplementaiy inteiviews weie caiiieu out to gain a bettei unueistanuing of
specific issues iegaiuing implementation of new assessment methous.
An inteinet suivey was uistiibuteu to chief assessois in Pennsylvania
counties. Chief assessois weie chosen as piinciple points of contact because they
aie iesponsible foi oveiseeing anu maintaining assessments in theii iespective
counties.
17
Thus, they possess the most compiehensive knowleuge of actual
assessment piactices anu aie appiopiiate contacts foi this pioject's ieseaich.
Suivey questions weie uesigneu with the ultimate goal of ueteimining the uegiee to
which assessment methous appioximate the iueal system iuentifieu in the pievious
chaptei. Questions weie uesigneu following guiuance offeieu by 0ppenheim (1992)
anu Iaiossi (2uu6), anu aiiangeu to auuiess five main sub-topics: geneial piactice
anu methous; fiequency of ieassessment; availability lanu value ueteimining
factois; use of auvanceu techniquestechnology; anu public involvement. Suiveys
weie uistiibuteu to county assessment offices thiough email coiiesponuence,
18
anu
caiiieu out using the Qualtiics.com seivice. Bue to inability to obtain all county
assessois' contact infoimation, suiveys weie sent to 6u of Pennsylvania's 67
counties, with a iesponse iate of 4u%.
To help mitigate issues common among suiveys (iigiu stiuctuie, limiteu
availability foi feeuback anu claiification of questions, etc.), supplementaiy
inteiviews weie conuucteu. Two inteiview paiticipants weie ieciuiteu thiough a

17
SS, Pa. C.S.A. 88u2.
18
Email auuiesses weie obtaineu fiom county websites anu, when necessaiy, telephone
coiiesponuence.
26
iequest in the suivey anu inteiviews weie conuucteu via telephone. A semi-
stiuctuieu foimat was useu, with geneial themes anu paiticulai questions iuentifieu
fiom the pievious chaptei anu suivey iesults. Questions weie uesigneu following
guiuance anu theoiy pioviueu by Caii anu Woith (2uu1), Bampton anu Cowton
(2uu2), Cohen anu Ciabtiee (2uu6), anu Baiiell anu Biauley (2uu9).
In auuition to inteiviewing Pennsylvania county assessois, an email
inteiview was conuucteu by contacting Teu uwaitney, who has implementeu
alteinative tax assessments uuiing his tenuie as chief assessoi in multiple
juiisuictions. An email inteiview was chosen uue to gieatly vaiying time zones anu
the neeu foi the iesponuent to have time to gathei specific infoimation
(0puenakkei 2uu6). uwaitney was contacteu piimaiily to gain his insight on the
main issues in changing assessment methous, anu his paiticulai opinion of
implementing such a system in Pennsylvania.
3.4 - Conc|us|on
The methouology piesenteu in this chaptei is thieefolu: legislative ieview,
suiveys, anu supplementaiy inteiviews. All thiee methouologies weie useu in oiuei
to gain the most compiehensive view of assessment piactices within Pennsylvania
in oiuei to answei the piimaiy question of the uisseitation.
It shoulu be noteu that since Pennsylvania is the only state examineu, the
iesults of this ieseaich aie limiteu in theii application to othei juiisuictions. While
PA piesents some similaiities in the 0.S. in teims of piopeity tax ievenues,
19
it is
funuamentally uistinct fiom othei states. Since assessment law anu piactice aie
both legally anu piactically heteiogeneous acioss the 0niteu States, analysis in the
following chapteis shoulu be ieau as laigely non-geneialisable beyonu the stuuy
site.

19
Foi example, the peicentage of geneial ievenue attiibuteu to the piopeity tax is 28.1% foi
Pennsylvania, similai to the 0niteu States aveiage of 28.S% (Lincoln Institute of Lanu Policy 2u12).
27
CnA1Lk 4
kesu|ts

While multiple methouological appioaches weie utiliseu, the iesults aie not
oiganiseu as such. Rathei, iesults aie sepaiateu by theme, specifically those
iuentifieu anu outlineu in Chaptei 2, with each thematic uiscussion utilising
infoimation obtaineu fiom each methouological appioach.
Section 1 outlines initial obseivations, most specifically funuamental
statutoiy iegulations iegaiuing lanu assessment. Section 2 uiscusses possibly the
gieatest baiiiei to implementing piopei lanu assessments: infiequency of
ieassessment. 0f paiticulai impoitance heie is Pennsylvania's use of a base yeai
system, which acts as an impeuiment to utilising tiue maiket values foi taxation.
Section S outlines othei issues anu themes with iespect to piopei lanu assessments.
These themes aie iuentifieu as: utilisation of full value foi taxation; use of 0+70'3)
1,2 &'3) >3' value; euucation of assessois; infoimation available to assessois;
pievalence of consultations; anu use of technology. The final section pioviues a biief
conclusion.
4.1 - Genera| Cbservat|ons
0ne of the most piomising obseivations about Pennsylvania assessment
methous is that lanu is valueu sepaiately fiom builuings. Accoiuing to the Lincoln
Institute, in Pennsylvania "at least some assessois ioutinely valueu lanu sepaiately
fiom impiovements" (Lincoln Institute of Lanu Policy 2u12). Fuitheimoie, statutoiy
law iequiies assessois to aiiive at assesseu values of lanu anu impiovements
sepaiately, inuicating that they must be appioacheu as uistinct souices of value.
2u

21

The iecognition anu application of these statutes is uemonstiateu by suivey iesults;
when askeu about the methou useu to sepaiate lanu anu builuing value, all
iesponuents ieplieu that values weie geneiateu sepaiately anu summeu foi total
paicel value.

2u
72 P.S. SS41.7
21
SS Pa. C.S.A., 8841
28
The fact that statutes iequiie assessois to aiiive at values sepaiately
piecluues the use of the lanu-iesiuual methou mentioneu in Chaptei 2. Any system
of piopei lanu assessments woulu iequiie appioaching lanu as its own souice of
value sepaiate fiom any impiovements on it. Because assessois aie 1%('12/ bounu
in law anu piactice to assess lanu inuepenuent of impiovements, theie is piomise
foi the ability to implement accuiate lanu assessments. Bowevei, even if lanu values
aie aiiiveu at inuepenuently, this uoes not mean that they aie accuiate (i.e. pioxy
tiue maiket value). In oiuei to ueteimine this, a much moie in uepth analysis of
assessment methous must be maue.
4.2 - Irequency of keassessment
Possibly the gieatest baiiiei in having assesseu values pioxy maiket values
is the fiequency at which ieassessments aie conuucteu. In oiuei to ensuie
unifoimity of taxation (which is piotecteu by both the 0.S. anu Pennsylvania State
Constitutions
22
), countywiue ieassessments aie conuucteu (Webei et. al. 2u1u, 1S).
All paicels of piopeity aie valueu when a ieassessment is uone to ensuie pioximate
equity in assesseu values (Legislative Buuget anu Finance Committee 2u1u, S12),
anu spot ieassessment (i.e. assessing a single paicel of piopeity such as at time of
sale) is piohibiteu by Pennsylvania law.
2S
Since the value of lanu tenus to fluctuate
ovei shoit peiious of time, countywiue ieassessments woulu have to be conuucteu
fiequently in oiuei foi assessments to tiuly ieflect maiket tienus.
Cuiiently, Pennsylvania uoes not have any statutoiy iequiiements that
assesseu values be baseu on "cuiient oi ielatively cuiient actual values."
24
Insteau,
counties aie peimitteu to use a base yeai system.
2S

26
A base yeai is uefineu in the
ueneial County Assessment Law as "the yeai upon which ieal piopeity maiket

22
See H',,3/%=1,+1 X4,3)+)>)+4," Aiticle vIII, Section 1 anu F;G; X4,3)+)>)+4," 14th Amenument.
0nifoimity piovisions iequiie that taxes be equal "upon the same class of subjects". When taxing
values that aie assesseu (iathei than exhibiteu in maiket tiansactions), this iequiies that the moue
of assessment be the same foi all taxable piopeities (The Fiee Legal Bictionaiy 2u12).
2S
SS Pa. C.S.A., 884S
24
Clifton, Cianoi, Simmons, anu Neiei v. Allegheny County, All. C.C. uBuS-u286S8 (Penn.2uu7).
2S
72 P.S. SS41.1S
26
SS Pa. C.S.A., 8842
29
values aie baseu foi the most iecent county-wiue ievision of assessment."
27
If any
significant impiovements oi changes aie maue to piopeities following a countywiue
ieassessment, they aie ieassesseu baseu on values ueteimineu in the base yeai.
28

Foi example, as one suivey iesponuent noteu, if a new home is auueu in 2u12, "the
value placeu on the home will be a 1999 value because that is the last time we hau a
ieassessment." This, coupleu with the inability to peifoim spot ieassessments,
makes it so assessments of lanu uo not ieflect any changes since the establisheu
base yeai, piesenting a baiiiei to implementing a tax on maiket value.
0nly one county in Pennsylvania (Philauelphia) conuucts ieassessments on
an annual basis (Legislative Buuget anu Finance Committee 2u1u, 1u). Fuitheimoie,
assessment law uoes not piesciibe when counties aie iequiieu to ieassess
piopeities (Webei et. al. 2u1u, 6), with counties ueciuing on an au hoc basis oi aftei
being oiueieu by the State Supieme Couit.
29
Accoiuing to uata pioviueu by the State
Tax Equalization Boaiu (STEB), the mean numbei of yeais since ieassessment in
Pennsylvania's counties is 1S.16 (meuian of 12, with a stanuaiu ueviation of
11.4S).
Su
The effect of lags in ieassessments on theii ability to accuiately ieflect
maiket value can be seen examining common level iatio (CLR) uata publisheu by
STEB. CLR is uefineu as "the iatio of assesseu value to cuiient maiket value useu
geneially in the county" by the uCAL,
S1
wheie cuiient maiket value is estimateu by
a sample of sales uata (Legislative Buuget anu Finance Committee 2u1u, S11). Even
though the sample uata may not be fully iepiesentative of piopeities in the county,
the CLR pioviues a glimpse of how assesseu values iaiely appioximate maiket
values. In 2u12, the mean CLR was 4S.S% (meuian SS.S%, stanuaiu ueviation of
2S.7%), showing that assesseu values giossly unueiestimate maiket values. A

27
72 P.S., Su2u-1u2
28
Clifton, Cianoi, Simmons, anu Neiei v. Allegheny County, All. C.C. uBuS-u286S8 (Penn.2uu7).
29
Foi example, Allegheny County was iecently oiueieu by the State Supieme Couit to ieassess
values (Baicousky 2u12).
Su
It is impoitant to note that change of the pieueteimineu iatio (the peicentage of assesseu value
useu foi taxation) is counteu as ieassessment even if no 1-)>1% ieassessment is unueitaken, which
oveistates the fiequency of ieassessment foi some counties (Legislative Buuget anu Finance
Committee 2u1u, S7).
S1
72 P.S., Su2u-1u2
Su
simple iegiession of CLR on the numbei of yeais since ieassessment shows that on
aveiage, a one-yeai inciease in ieassessment lag yielus a u.8S peicentage point
ueciease in CLR.
S2
Auuitionally, lags in assessment tenu to be coiielateu with
pioblems of unifoimity of taxation, since sub-aieas within counties will expeiience
heteiogeneous changes in lanu values since the base yeai.
SS

In oiuei foi LvT to be implementeu piopeily, assesseu values of lanu must
ieflect maiket tienus as they occui. Bowevei, as shown above, the base yeai system
allows lanu valuations to be out-of-uate anu typically unueiassesseu, hinueiing
iealisation of the full benefits of LvT if the system was auopteu.
4.3 - Cther 8arr|ers
While infiequency of ieassessment piesents a main baiiiei to instituting a
tiue system of LvT, many othei issues of concein must be examineu to accuiately
ueteimine how poiseu assessois aie to implement iueal assessment methous.
4.3.1 - Ut|||s|ng Iu|| Va|ue
Statutoiy coues allow foi assesseu values of piopeity to be lowei than tiue
maiket value thiough use of pieueteimineu iatios (PBRs). A PBR is a peicentage
(less than 1uu%) applieu to assesseu value useu to geneiate the final piopeity value
useu foi taxation.
S4
Thus, assesseu values fuithei unueiiepiesent maiket values
when tax iates aie applieu. Accoiuing to the most iecent uata pioviueu by STEB, the
mean PBR in Pennsylvania Counties is u.77, howevei, most counties utilise a PBR of
1. Regaiuless, the PBR allows foi fuithei obfuscation in teims of assesseu values
being congiuent with maiket values. Even though a PBR of less than 1 can be met
with highei tax (1)'3 to ietain ievenue neutiality, the benefits of LvT iequiie tiue
maiket values to be taxeu.

S2
The R
2
statistic foi this iegiession is low (u.1SS), mainly because it only uses yeais since
ieassessment to explain fluctuations in CLR. Bowevei, the F-statistic foi the iegiession is significant
at a u.S% level, inuicating that CLR vaiiation can be explaineu by lags in ieassessment.
SS
Issues of unifoimity aie captuieu by STEB's coefficient of uispeisement (C0B). A high C0B
inuicates that a laige piopoition of piopeity owneis have ovei oi unueiassesseu piopeity values,
violating unifoimity. In 2u11, the mean C0B was SS.1 (meuian of SS.S, stanuaiu ueviation of 11.8),
with a simple iegiession showing that a one yeai inciease in ieassessment lag yielus a u.4S6 inciease
in C0B (R
2
=u.18, F=1S.S89).
S4
SS Pa. C.S.A., 8842
S1
0thei potential baiiieis to utilising full value ielate to the fact that piopeity
tenus to inciease in value. In oiuei to pievent opposition fiom iising tax bills (uue
to maiket incieases in piopeity value), "states.have in place caps anu limits to
pievent assessments anuoi ievenues fiom giowing at the same pace as maiket
value" (Legislative Buuget anu Finance Committee 2u1u, S9). This may encouiage
assessois to keep assesseu values below actual values to stay in line with statutoiy
iequiiements. Pennsylvania has an "aggiegate ievenue cap" in place to contiol tax
incieases uue to ieassessment; in the yeai following a countywiue ieassessment,
counties must ieuuce theii tax iates (assuming piopeity piices iise) to iemain
ievenue neutial.
SS
While this helps iemove incentives foi assessois to unueivalue
piopeity to iemain compliant with state law, it ceitainly betiays the ultimate
puipose of LvT weie it to be implementeu; if lanu iises in value, but the tax buiuen
uoes not iise piopoitionately uue to a ueciease in the tax iate, the intenueu benefits
of LvT aie unueimineu.
4.3.2 - n|ghest and 8est Use
Accoiuing to the Ameiican Institute of Real Estate Appiaiseis, maiket value
ueteimination involves "taking into consiueiation all the uses to which the piopeity
is auapteu anu 5+70) &' applieu" (Belleistein anu Belleistein 2uuS, 1S7, emphasis
auueu). As Belleistein anu Belleistein note, "even piopeity without unusual
physical featuies may iaise questions as to how legal iestiictions, such as zoning,
ient contiol, oi lease agieements, shoulu affect the calculation of maiket value"
(Belleistein anu Belleistein 2uuS, 12u). The key point heie is that potential changes
in legal iestiictions can affect the use of lanu, thus affecting maiket value. As has
been uiscusseu pieviously, LvT iequiies that lanu values aie assesseu baseu on
0+70'3) 1,2 &'3) >3' (which incluues foieseeable changes in legal iestiictions) anu
not cuiient use.
Suivey iesponses inuicate that legal iestiictions may play a ielatively minoi
iole in geneiating assesseu values. 0n a 7-point Likeit scale (ianging fiom "Not at

SS
SS Pa. C.S.A., 882S
S2
All" to "veiy Nuch")
S6
, the aveiage iesponse to a question asking how heavily legal
iestiictions such as zoning affect assesseu values was S, with 4 minimum iesponses
of 1. This may inuicate that while iestiictions uo affect cuiient use value, assessois
unueistanu that they can change anu thus assesseu values ieflect this. Answeis fiom
inteiviews, howevei, suggest that cuiient use is moie uominant than potential
futuie use, inuicating that assessments may be fuithei iemoveu fiom maiket value.
Bespite the mixeu iesults fiom suiveys anu inteiviews, legal iequiiements
foi assessments inuicate an unueistanuing of potential changes in use affecting
value, paiticulaily with agiicultuial lanu. Pennsylvania law allows foi piefeiential
assessment of agiicultuial lanu (piesumably below its potential 0+70'3) 1,2 &'3) >3'
value).
S7
Bowevei, assessois aie also iequiieu to ueteimine maiket value when
assessing agiicultuial lanu. If the ownei changes the use of the lanu, the uiffeience
in taxes that woulu have been collecteu is chaigeu with inteiest.
S8S9
Even if this
piinciple is not applieu to all types of lanu baseu on myiiau legal iestiictions, theie
is at least an unueistanuing about how changes in allowable use affect value, anu
that this shoulu be accounteu foi in assessments.
4.3.3 - Lducat|on
The euucation level of assessois anu theii oveiall knowleuge of the
ueteiminants of lanu value aie ciucial in geneiating accuiate lanu assessments. As
one assessoi stateu in an inteiview, "assessment is that appiaisei's oi assessoi's
'opinion of value,' so it's baseu on one's euucation, licensuie, knowleuge of the aiea
anu its sales, anu expeiience in the fielu."
As pei the Consoliuateu County Assessment Law, all assessois must obtain
Ceitifieu Pennsylvania Evaluatoi (CPE) status (Pennsylvania ueneial Assembly
2uu9, 4).
4u
The Assessoi's Ceitification Act iequiies assessois to ieceive an

S6
All subsequent iefeiences to Likeit scales follow the same iatings.
S7
72 P.S., S49u.S
S8
72 P.S., S49u.Sa
S9
Auuitionally, chaiging foiegone taxes uue to piefeiential assessments may help cuib lanu
speculation, uiscouiaging withholuing of high value uiban lanu (see Baitzok 1999 foi full
uiscussion).
4u
SS Pa. C.S.A., 88S1
SS
auequate euucation in topics iuentifieu by the State Boaiu of Ceitifieu Real Estate
Appiaiseis.
41
0nuei iequiieu couises of stuuy, law iequiies assessois to unueitake
couises in "site value," anu "mapping," both of which aie necessaiy foi assessois to
unueistanu foi accuiate lanu assessment geneiation.
42
Legal iequiiements,
howevei, aie iathei ambiguous as to what constitutes an auequate euucation in
these topics. Aftei contacting the Boaiu uiiectly, it was stateu that "it is not
necessaiy foi a special couise ueuicateu only to site valuation," inuicating that it
uoes not make up the coie of an assessoi's euucation. Regaiuless, suivey iesults
inuicate that assessois aie geneially awaie of ueteiminants of lanu value; in a
question asking to what extent neighbouihoou amenitiesuisamenities weie taken
into account when assessing piopeities, the aveiage iesponse (on a 7-point Likeit
scale) was S.86, with most values aiounu the mean. Inteiviews anu suivey iesults
suggest that assessois typically ueteimine a base value (usually uollai pei acie oi
squaie foot) foi lanu in ceitain aieas, anu aujust foi locational attiibutes. These
iesults suggest an unueistanuing anu utilisation of the ueteiminants of lanu value
among assessois.
Fuitheimoie, in an email coiiesponuence, The State Boaiu of Ceitifieu Real
Estate Appiaiseis inuicateu that it is geneially expecteu that assessois woulu have
tiaining in computei assisteu appiaisal piogiams, which woulu allow foi a moie
accuiate ueteimination of lanu values. Bowevei, when askeu if assessois
implementeu iegiession analysis to geneiate lanu values, all suivey iesponses
(except foi 2) weie no. Theiefoie, while euucation stanuaius iequiie assessois to
unueistanu ueteiminants of site value anu iepoiteu methous geneially ieflect this,
moie sophisticateu appioaches such as heuonic iegiession analysis may have to be
implementeu to ensuie accuiacy.
4.3.3 - Informat|on
In oiuei foi accuiate lanu assessments to be geneiateu, a wealth of
infoimation conceining paicels of lanu anu theii attiibutes must be obtaineu by the

41
6S P.S., 4S8.S
42
49 Pa. Coue, S6.222
S4
assessoi. Assessment law on the subject of infoimational iequiiements is geneially
ambiguous anu lacking. In counties of the seconu class (of which only one -
Allegheny - exists), iecoius of eveiy ueeu oi conveyance of piopeity aie iequiieu to
be iepoiteu to assessment offices.
4S
Bowevei, the law uoes not iequiie piopeity
infoimation ielevant foi assessment to be iecoiueu oi iepoiteu, anu no such
iequiiement exists foi counties of thiiu anu highei classes (which make up the
majoiity of Pennsylvania counties).
As stateu in pievious chapteis, infoimation ielevant to lanu value can be
obtaineu fiom othei goveinment agencies oi ieal estate fiims. 0n a 7-point Likeit
scale, the aveiage iesponse to a suivey question asking the level of communication
with othei agencies was S.6, anu the aveiage iesponse to a question asking the level
of communication with ieal estate fiims was S.SS. This shows that while assessois
uo obtain ielevant infoimation fiom othei souices, it is ceitainly not oveiwhelming
in scale. Auuitionally, when askeu if theie was a single uatabase in theii assessment
offices which compiles all ielevant infoimation, all but S iesponses weie no.
Baseu on these iesults, it iemains entiiely uncleai whethei oi not
assessment offices possess auequate infoimation about ielevant ueteiminants of
lanu value. While cuiient methous of lanu valuation suggest aujustments aie maue
baseu on ielevant vaiiables, it cannot be asceitaineu whethei assessois auequately
ueteimine lanu values uue to potential infoimation ueficiencies.
4.3.4 - Consu|tat|ons
As it cuiiently stanus, assessment law only iequiies assessments to be maue
available foi public inspection.
44

4S
Theie exist no statutoiy iequiiements foi
assessois to engage with iesiuentsstakeholueis piioi to conuucting assessments
beyonu notifying them of plans to ieassess. Fuitheimoie, counties aie not iequiieu

4S
72 P.S., S4S2.6
44
SS Pa. C.S.A., 8841
4S
It shoulu be noteu that "taxpayeis can iequest an infoimal meeting to uiscuss theii pioposeu
assessment.piioi to the completion of the final assessment ioll" (Pennsylvania ueneial Assembly
2uu9, S).
SS
to make methous useu foi assessment available to the public at any time (Legislative
Buuget anu Finance Committee 2u1u, S24).
Suivey iesults inuicate that public consultation uoes not tenu to extenu
beyonu statutoiy iequiiements. When askeu how engageu assessois aie with
community membeisstakeholuei piioi to geneiating assessments, the aveiage
iesponse value on a 7-point Likeit scale was 2.46, inuicating low levels of
consultation. Auuitionally, when askeu the methous useu foi notifying the public
about assessments, most iesponuents simply ieiteiateu the statutoiy iequiiements
uiscusseu above. Bowevei, one inteiviewee noteu that "euucating piopeity owneis
is a huge necessity; the moie coopeiation you get fiom them the moie accuiate youi
values will be." While it appeais that some assessois may unueistanu the necessity
of communitystakeholuei input when ueteimining accuiate values, the majoiity
uoes not engage with the public in any constiuctive mannei anu only encounteis the
public 1.)'( assessments aie finaliseu.
4.3.S - 1echno|ogy
0ne of the most piomising aspects of cuiient assessment methous with
iespect to theii ability to geneiate accuiate lanu values is auvancement in
technology. Suivey iesults inuicate that most assessment offices utilise uIS when
uiafting assessment iolls. When askeu the extent to which uIS is ielieu upon, the
aveiage iesponse on a 7-point Likeit scale was S.S7S, inuicating that uIS is a staple
in most counties. A ieview of counties' websites shows that most have theii own
ueuicateu uIS offices, which can pioviue necessaiy infoimation to assessois.
Auuitionally, a suivey conuucteu by the Pennsylvania State Legislatuie inuicateu
that "two-thiius of counties iely on venuoi-supplieu computei assisteu mass
appiaisal systems" (Legislative Buuget anu Finance Committee 2u1u, S4). The use of
computei systems not only assists in aujusting lanu values moie accuiately, but can
also help supplement gaps in euucation, such as lack of knowleuge of iegiession
techniques iuentifieu eailiei.
In the pievious chaptei, it was stiesseu that one of the gieatest auvantages of
utilising technology was the ability to cieate lanu value maps. While iesults inuicate
S6
that counties aie technologically well equippeu to map lanu values, this uoes not
mean that they actually uo. 0nly thiee iesponuents inuicateu that lanu value maps
(as opposeu to full piopeity value maps) weie geneiateu, all of whom noteu that uIS
was a necessaiy tool foi theii piouuction. The lack of lanu value map piouuction
shows that while assessment offices aie geneially up to uate in teims of technology
necessaiy foi accuiate lanu assessment, it is not necessaiily utiliseu foi this
puipose.
4.4 - Conc|us|on
The above iesults aie iathei mixeu in teims of ueteimining how poiseu
assessment offices aie to implement a system of assessment that is conuucive to
LvT. The gieatest hinuiance is Pennsylvania's base yeai system, which allows
assesseu values to gieatly vaiy fiom cuiient maiket value. The piimaiy legislative
concein foi assessments is mainly focuseu on >,+.4(5+)/ iathei than 1-->(1-/,
piecluuing the neeu foi assessments to ieflect cuiient maiket values. While the base
yeai system woulu gieatly hinuei the implementation of LvT, theie is giowing
suppoit foi its abolition, which is uiscusseu in the next chaptei.
The use of pieueteimineu iatios (less than 1), along with piopeity tax
ievenue caps following ieassessments piesent fuithei issues with iespect to having
assessments ieflect tiue maiket values. Issues in ueteimination anu use of 0+70'3)
1,2 &'3) >3' value (necessaiy foi LvT), euucation levels of assessois, infoimational
iequiiements, anu consultations with stakeholueis show mixeu iesults in teims of
geneiation of accuiate lanu values, with stiengths in some aieas anu weaknesses in
otheis. Bowevei, it is cleai that assessois possess anu use technology that can assist
in accuiately estimating anu upuating lanu values, giving piomise to fuithei
auvancement.

S7
CnA1Lk S
D|scuss|on and Conc|us|on
S.1 - Genera| Cbservat|ons
Fiist, it shoulu be noteu that the statutoiy iequiiement foi lanu to be
assesseu inuepenuently of builuings pioviues gieat piomise with iespect to
implementation of accuiate lanu assessments. While cuiient methouology may not
be sophisticateu enough to uelivei tiue maiket values, assessois still appioach lanu
as its own souice of value iathei than ielying on iesiuual methous that geneiate
values baseu on lanu's cuiient use.
Auuitionally, it appeais that assessois aie well equippeu to implement
methouologies employeu by Teu uwaitney anu }eiome ueiman. As has been noteu
in pievious chapteis, the iise in the use of computei assisteu appiaisal systems anu
uIS technology have alloweu foi the possibility of estimating accuiate lanu values
baseu on a small sample of sales uata. Pennsylvania assessois not only utilise both
of these technologies, but have inuicateu that they iely heavily on them to geneiate
assesseu values. Auuitionally, it has been shown that unueistanuing these
technologies is expecteu piioi to ieceiving necessaiy ceitification as an assessoi.
While assessois uo not go as fai as cieating lanu value maps that coulu assist in
pioviuing accuiate anu easy to upuate assessments, the necessaiy tools aie
available. Fuitheimoie, Teu uwaitney noteu in an inteiview that most assessois
possess auequate tiaining to actually implement a system of lanu value mapping,
inuicating gieat potential foi eventual use.
The pievious chaptei highlighteu that peihaps the gieatest baiiiei to
implementing a system that taxes the maiket value of lanu is the fact that
Pennsylvania utilises a base yeai system foi assessments. While it has been shown
that the base yeai system uoes a pooi job of appioximating maiket value anu may
violate unifoimity uue to infiequency of ieassessment, it is neveitheless useu.
Bowevei, why it is useu still iemains unansweieu.
S8
In a suivey of assessois conuucteu by the Pennsylvania State Legislatuie,
"ovei 8u peicent of the chief assessois.iepoiteu cost, incluuing the fiscal status of
the county, as a piimaiy ieason they woulu not auvise initiating a countywiue
ieassessment" (Legislative Buuget anu Finance Committee 2u1u, S7). Inteiview
paiticipants also iuentifieu cost as a limiting factoi in fiequency of ieassessments.
Noieovei, unlike suiiounuing states (which iequiie assessments to be baseu on
cuiient maiket values), Pennsylvania uoes not uesignate funus to assist counties in
ieassessment (Legislative Buuget anu Finance Committee 2u1u, S17). In auuition to
cost hinueiing fiequent ieassessment, so is the couits' consistent legal appioval of
the base yeai system. Even though unifoimity of taxation is potentially violateu, its
constitutionality has been uphelu iecently (2uu9) in X%+.)4, =; $%%'70',/ X4>,)/
SY
,
claiming it uoes not impose "substantially unequal tax buiuens" (Webei et. al. 2u1u,
14). Auuitionally, STEB uata on C0B anu CLR aie not cuiiently useu oi uesigneu foi
ueteimining when a county shoulu ieassess, making the pievious analysis
inauequate foi piompting legislative changes (Legislative Buuget anu Finance
Committee 2u1u, S11).
Bowevei, theie is wiuespieau suppoit among assessois anu legislatois to
abolish the base yeai system. The Pennsylvania State Legislatuie has suggesteu
centialising ieassessments (which helps mitigate county costs) anu conuucting
them moie fiequently (Legislative Buuget anu Finance Committee, S26 - S28). The
push foi moie fiequent ieassessments is highlighteu again by Webei et. al. (2u1u),
who suggest passing state legislation that iequiies ieassessments eveiy 4 yeais.
Fuitheimoie, when askeu if assessments shoulu occui moie fiequently, inteiview
iesponuents mainly answeieu yes, citing lack of unifoimity anu unueiassessment of
lanu values as piimaiy justifications. Thus, while the base yeai system gieatly
hinueis the ability foi assessments to be useful foi LvT, it is conceivable that the
system coulu be abolisheu, allowing moie fiequent assessments to occui.

46
X%+.)4, =; $%%'70',/ X4;" 969 A.2u 1197 (Pa. 2uu9)
S9
S.2 - otent|a| 8enef|ts
While the focus of this uisseitation has been on baiiieis to implementing
accuiate lanu assessments, it is impoitant to note the oppoitunities that such a shift
woulu piesent. As has been uiscusseu, the main issue of pioviuing accuiate anu
fiequently upuateu assessments is the cost associateu with conuucting county-wiue
ieassessments. Bowevei, if lanu value was taxeu (with a coiiesponuing iescission of
taxes on builuings), the auministiative cost anu buiuen of assessments coulu be
ieuuceu (Back 197u, 41). Cuiient piopeity taxes iequiie site visits to piopeities in
oiuei to ueteimine the assesseu value of builuings, which gieatly auus to the cost of
assessments. As Teu uwaitney noteu in an inteiview, "it is less expensive to value
lanu than builuings. If we stoppeu assessing builuings, the cost woulu be one
quaitei of cuiient cost." Thus, the ieliance on a base yeai system to contiol costs
woulu be mitigateu, allowing foi moie fiequent upuating of lanu values.
Auuitionally, since lanu value is a function of location (anu can be easeu thiough the
use of computei mouelling), it is fai easiei to conuuct mass ieassessments of lanu
than builuings (ueiman et. al. 2uuu). Because these auministiative anu cost
incentives exist, they shoulu be highlighteu when attempting to change assessment
methous anu intiouuce LvT.
Anothei oppoitunity piesenteu by changing lanu assessments is its ability to
help ease implementation LvT. Coiiecting lanu assessments even without changing
taxes constitutes a foim of LvT, because inevitably the assesseu value of lanu anu
subsequently its tax inciuence will iise (Rybeck 2uuu, 164; Baiiss 197u, 217).
Bowevei, the aveiage taxpayei woulu not feel any change in tax buiuen unuei the
cuiient piopeity tax system (assuming total piopeity value iemains constant)
because of equal iates applieu to lanu anu builuings.
47
As has been noteu befoie,
coiiecting ieassessments in Pittsbuigh 1.)'( split-iate taxation hau been
implementeu iesulteu in piotest anu the eventual iescission of the tax (Bughes
2uu6, 1S-14). Bowevei, if lanu assessments hau been coiiecteu fiist, split-iate

47
Fuitheimoie, a stuuy by Plummei (2u1u) using piopeity tax uata fiom Baiiiss County (Texas)
founu that an inciease in the piopoition of assesseu piopeity value attiibutable to lanu "is not
systematically associateu with the likelihoou that a piopeity ownei will piotest theii piopeity's
assesseu value" (Plummei 2u1u, 2).
4u
taxation coulu be easeu in slowly, potentially making the system moie palatable anu
less subject to laige shocks in tax buiuens.
S.3 - Conc|us|on
This uisseitation has attempteu to iuentify the main baiiieis to coiiecting
lanu assessments in Pennsylvania. Chaptei 1 intiouuceu the concept of lanu value
taxation, pioviuing an oveiview of its philosophical oiigins, theoietical
unueipinnings, anu empiiical eviuence with iespect to uiban iegeneiation. Chaptei
2 aigueu that in oiuei foi the theoietical benefits of lanu value taxation to be fully
iealiseu, methous of lanu assessment must confoim to a specifieu stanuaiu. The
mouel piesenteu was baseu on the wiitings of multiple theoiists, as well as the woik
of assessois that have conuucteu accuiate lanu assessments. Chaptei S intiouuceu
the stuuy site, Pennsylvania, anu pioviueu an explanation of the methouology
employeu to answei whethei oi not Pennsylvania assessois weie poiseu to
implement an iueal system of lanu assessment.
Chaptei 4 piesenteu the iesults of the stuuy. While mixeu iesults weie founu
foi a few questions of inteiest, some soliu conclusions coulu be maue about the
ability foi assessois to geneiate accuiate lanu values. The base yeai system along
with the lack of statutoiy iequiiement foi assessments to appioximate maiket value
makes it so assessments act as a pooi inuicatoi of maiket value. Since assessments
can lag fai behinu cuiient values, they cannot be assumeu to be accuiate anu
theiefoie piesent a baiiiei to implementing LvT. Bowevei, the inaccuiacy of the
system is wiuely known anu theiefoie theie is an oppoitunity foi change. Noie
piomisingly, it was shown that assessois possess the necessaiy technology to assist
in geneiating lanu values, paiticulaily with the use of computei assisteu appiaisal
piogiams anu uIS.
While it cannot be stateu uefinitively if assessois aie poiseu to implement
alteinative assessment methous, the potential benefits (fiom a cost stanupoint) of
assessing lanu anu implementing LvT shoulu be consiueieu moie seiiously.
Implementing such a system coulu pioviue not only a viable way to iegeneiate cities
anu iegions, but also ease auministiative buiuens.
41
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