Leechburg Area School Board’s proposed tax rebate program for West Leechburg residents may be illegal.
Chuck Pascal, an attorney and Leechburg councilman, warned school officials the plan likely violates the state constitution.
“I understand that you made a political promise to the people of West Leechburg — some of you — and I understand that this is an effort to turn down the heat, which apparently you did because, as you can see, nobody’s here,” Pascal said at a recent school board meeting. “But you cannot rebate taxes to a portion of this school district. It’s unconstitutional. It’s a violation of the Uniformity Clause.”
In an effort to relieve the school tax burden on West Leechburg residents, the district is exploring a program in which properties there that qualify for the state’s Homestead/Farmstead Exemption would receive a rebate from the district for any tax increase not offset by the exemption.
West Leechburg property owners pay a higher tax millage rate than residents in Leechburg and Gilpin because they live in Westmoreland County, which has a different assessment rate than properties in the Armstrong County communities.
The rebate, to be paid entirely through school district funds, would not be available to property owners in Leechburg and Gilpin and, that, said Pascal, is where the problem lies.
The Uniformity Clause of the state constitution states: “All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.”
State courts have consistently ruled the clause means all taxpayers within a taxing district have to be treated equally in terms of taxation and any programs that would reduce tax burden.
Ironically, the issue of tax inequities in one portion of the district stems from a state program designed to level the tax burden for residents of different counties.
Although Leechburg Area officials, themselves, are not proposing a tax increase for next year, the millage rates will change because of the state’s Tax Equalization Ratio, a formula designed to ensure property owners in different counties shoulder a roughly equal tax burden. It is arrived at each year by the State Tax Equalization Board (STEB) and is unique to each school district that crosses county lines.
State law requires the ratio to be used by all multicounty school districts.
For next year, the ratio requires a millage increase in West Leechburg and a reduction in Leechburg and Gilpin to offset the different county property assessment rates.
In fact, the ratio regularly results in tax increases in West Leechburg and reductions in Leechburg and Gilpin — the main complaint of West Leechburg property owners.
That seeming inequity is what school district officials want to address with the rebate program and efforts to get state law changed to make the equalization ratio optional for school districts.
Superintendent David Keibler said the district worked out the rebate plan as temporary relief for West Leechburg residents.
“The Homestead Act increased by $70 this year in both Armstrong and Westmoreland counties,” Keibler previously told TribLive. “What we’re looking to put into our final budget is a rebate to give Westmoreland County residents — their entire remaining tax increase back (after they receive approval for the Homestead Exclusion Act) this year. This will buy us another year to work with the state to try to figure it out.”
Under a homestead or farmstead property tax exclusion, the assessed value of each qualifying property is reduced by a set amount before the property tax is computed. The proposed rebate would come directly out of the district’s budget.
The district estimates it would cost about $66,000 out of the district’s $16.4 million budget.
“Nobody likes what the STEB effect is,” Pascal said, “but the STEB formula is there to make the taxation system constitutional because of the difference in the assessments between West Leechburg, Westmoreland County and Armstrong County.”
He suggested three other solutions for the district, but they appear to be unlikely.
One would require the Legislature to pass a law equalizing property reassessments in all counties to make them uniform. The second would have state lawmakers require every county to conduct regular reassessments of all properties. Pascal acknowledged both of those solutions would be politically unpopular.
He said a third solution might be more practical.
“The solution here is to permit the school board to opt to have the dominant county, in this case Armstrong, to do assessments in the Westmoreland side for school tax purposes only,” Pascal said.
Pascal said Westmoreland County would continue to assess properties in West Leechburg for borough and county taxing purposes.
District Solicitor Gary Matta said the last solution is just as improbable as the previous two.
“On one hand, I agree with Mr. Pascal that this is probably a problem, giving one set of taxpayers a deduction and not the other,” Matta said. “Mr. Pascal claiming that he has a solution is way inaccurate. There’s no way that one county is going to let another county come in and do assessments on their homes.
“What’s going to happen is that there will be two sets of assessments; people will be confused. That just won’t work.”
Westmoreland County Chief Tax Assessor Camdon Porterfield said Pascal’s suggestion seems “very unlikely.”
“I’d be interested to hear the rationale and how that would even work,” Porterfield said. “I’d need to know what the game plan there would be. Armstrong County dabbling in Westmoreland County’s values doesn’t seem right.”
School board President Ashley Coudriet said, despite Pascal’s statement, the rebate has nothing to do with a political promise.
“The board promised to examine and address the issue, which is exactly what we are attempting to do,” she said. “I was elected to represent all constituents. I want taxation to be fair and equitable across the board, for all taxpayers. Over half the district in Armstrong County will see a reduction in school taxes, but an increase for West Leechburg is not fair.”
Coudriet described the STEB rebalancing as “detrimental” to the district, particularly to West Leechburg residents.
“The concept of a rebate for West Leechburg is a creative, yet temporary, solution to provide immediate relief to our taxpayers,” she said. “We are considering all options to try to mitigate the harm caused by the STEB rebalancing, though the budget has not been finalized.
“Our district’s residents have the highest tax burden of all districts in both Armstrong and Westmoreland counties.”
Matta said the rebate remains under discussion by board members. In the meantime, they’re looking into other solutions for the inequities STEB rebalancing has caused.
“I don’t think spending money to litigate against other government entities is the first line that we should take because it’s taxpayer dollars,” Matta said. “I think that we need to go and speak with the county commissioners in Westmoreland County and the assessment office to see if we can come to some process that we can take.”
Coudriet said the board and district officials have been working to find a solution through lawmakers and the STEB board for months.
“Dr. Keibler, (school board member Tom) Maxin and I traveled to Harrisburg to meet with the STEB board,” she said. “We invited the (Armstrong) County commissioners to our school board meetings. We have also been meeting with our state representatives as we consider all options in seeking both an immediate and long-term solution to the taxation disparity.”
Matta said he hopes that once lawmakers see the “vast inequities” between county taxes, there will be some law changes, but he likely can’t give his blessing to the tax rebate proposal.
“I’m not going to recommend us doing something that will lead us into litigation.”
Haley Daugherty is a TribLive reporter covering local politics, feature stories and Allegheny County news. A native of Pittsburgh, she lived in Alabama for six years. She joined the Trib in 2022 after graduating from Chatham University. She can be reached at hdaugherty@triblive.com.
