Call for Change from Equalization Board

Pennsylvania State Auditor General, Jack Wagner, said that his auditors found significant flaws from the State Tax Equalization Board's revised property market values for 2008.

The State Tax Equalization Board (STEB) was formed to balance disparities in county property market assessments. Because counties reassess market values themselves, some not since 1986, STEB yearly calculates county market values. Those values are then used by the Department of Education and other state agencies to distribute over nine billion dollars in aid.

Auditors reviewed records from a sample 70 municipalities using the same information and resources STEB has access to and found a 65% error rate. Among the errors were 21 municipalities were credited with sales of properties that did not exist, and market value calculations for 15 municipalities used incorrect property sales ratios.

Wagner says that because of human error combined with a flawed computer system county property market values increased in some cases, leading to increased taxes in some municipalities. Because school districts rely on the funding that comes from STEB reviews, if property values increase funding to districts decreases. This could cause municipalities to raise taxes to make up for the loss.

Wagner says that even though STEB tried to fix the problems that occurred in 2008 and attempted to revamp the computer system, he believes that not all of the mistakes were solved. "I also call on STEB to immediately, and I repeat immediately, implement all of the recommendations contained in our audit. If they don't, STEB should be abolished and its responsibilities should be given to another state agency, such as the Department of Revenue."

STEB will install a new system in June of 2011, but Wagner says that they still need to go back to redo the 2008 and other reports because it effects the calculations for future reports.