IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Kennett Consolidated School District :
: No. 253 C.D. 2019
v. :
: Argued: November 12, 2019
Chester County Board of Assessment :
Appeals, Chester County, PA :
:
Appeal of: :
Property Owner Autozone :
Development Corp. :
BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION BY
JUDGE McCULLOUGH FILED: February 28, 2020
Autozone Development Corporation (Taxpayer) appeals from the
February 4, 2019 decision of the Court of Common Pleas of Chester County (trial
court) that determined, following a nonjury trial, the fair market value and property
assessment of Taxpayer’s property for the years 2018 and 2019. In particular,
Taxpayer challenges the trial court’s November 9, 2018 denial of its motion to quash
Kennett Consolidated School District’s (District)1 assessment appeal of its property
located within Chester County (Property). Upon review, we affirm.
1
New Garden Township and Chester County Board of Assessment join in the brief filed by
District.
Background
The background facts of this case are undisputed.2 This case’s origins
lie in assessment appeals filed by District. By grant of statutory authority, a school
district, under Section 8855 of the Consolidated County Assessment Law, has “the
right to appeal any assessment within its jurisdiction in the same manner, subject to
the same procedure and with like effect as if the appeal were taken by a taxable
person with respect to the assessment.” 53 Pa.C.S. §8855.3 District exercised its
authority to do so, beginning with three emails sent in July of 2017.
2
Before we begin with the analysis of the present issues, we first address District’s request
in its brief that this Court strike certain facts outside of the record. District maintains the offending
statements should be stricken as they violate the fundamental rule that an appellate court may only
properly consider the facts duly certified in the record on appeal. HYK Construction Company, Inc.
v. Smithfield Township, 8 A.3d 1009, 1017 (Pa. Cmwlth. 2010). However, our September 30, 2019
order has already granted in part and denied in part District’s application to strike these identical
statements. Nevertheless, we reiterate that the offending statements have been appropriately
disposed of; thus, the issue is presently moot before this Court and no further statements from
Taxpayer’s brief will be stricken.
3
Section 8855 provides in full:
A taxing district shall have the right to appeal any assessment
within its jurisdiction in the same manner, subject to the same
procedure and with like effect as if the appeal were [sic] taken by a
taxable person with respect to the assessment, and, in addition,
may take an appeal from any decision of the board or court of
common pleas as though it had been a party to the proceedings
before the board or court even though it was not a party in fact. A
taxing district authority may intervene in any appeal by a taxable
person under section 8854 (relating to appeals to court) as a matter
of right.
53 Pa.C.S §8855.
2
The first email was sent on July 24, 2017, from District to Reeves
Lukens, III (Lukens), requesting a review of all property assessments within the
taxing district with recommendations for possible appeals to file against assessed
properties. (Reproduced Record (R.R.) at 92a.) This email explicitly stated “[p]lease
do not limit your review to any particular class of properties in the [taxing
district], but review all classes of properties including commercial, residential,
and otherwise.” Id. (emphasis added). On July 26, 2017, Lukens identified 13
properties he described as having “a high probability of being underassessed by more
than [$1 million] of market value.” (R.R. at 93a.) Subsequently, on August 1, 2017,
District identified 12 property assessments from which it decided to appeal. (R.R. at
94a.)
The assessment appeals were filed and a hearing was held on October
10, 2017. On October 20, 2017, the Chester County Board of Assessment Appeals
(Board of Assessment) determined that the then-current assessment of Taxpayer’s
Property located at 965 West Cypress Street, New Garden Township, Tax Parcel ID
No. 60-02-0044.0000, would remain valued at $536,960.00. (R.R. at 14a-16a.) On
November 17, 2017, District appealed the decision to the trial court. (R.R. at 17a-
22a.)
In its appeal, District claimed that the Property’s value was less than the
fair market value, the assessment was inconsistent with similarly situated properties,
and the assessment did not reflect actual market value. Id. On December 24, 2017,
Taxpayer filed an answer and new matter, denying the allegations of the appeal and
claiming that the assessment was contrary to the law and Constitution of this
Commonwealth. (R.R. at 23a-28a.) On May 2, 2018, Taxpayer requested a stay of
the valuation phase until the issue of uniformity under the Pennsylvania Constitution
3
could be determined by the trial court. (Original Record (O.R.) at Item No. 7.) The
following day, Taxpayer filed a motion for leave of court to take discovery. (R.R. at
36a-52a.) On June 30, 2018, the motion to take discovery was granted and the
motion for the stay was denied. (R.R. at 53a.)
On October 30, 2018, Taxpayer filed a motion to quash the assessment
appeal arguing that it was unconstitutional under the Uniformity Clause of the
Pennsylvania Constitution, Pa. Const. art. VIII, §1. (R.R. at 54a-96a.) Attached as
exhibits to the motion were the emails between District and Lukens. Id. District filed
an answer in opposition on November 8, 2018. (R.R. at 97a-105a.)
A trial was held on November 9, 2018. (R.R. at 106a.) There, the trial
court considered Taxpayer’s motion to quash the appeal.4 (R.R. at 108a.) Taxpayer
did not present any additional evidence or testimony in support of the motion other
than the attached exhibits. (R.R. at 109a.) In support of the motion, Taxpayer
alleged that Lukens’ recommendation to appeal the assessment of properties that
were underassessed by $1 million was unconstitutional. (R.R. at 109a-117a.) The
trial court denied the motion. Id. The trial court explained that Taxpayer’s
4
District points out:
Following the filing of [District’s] Answer, [Taxpayer] failed to file
the Praecipe for Determination and Supporting Brief required by the
Chester County Rules of Civil Procedure. See C.C.R.C.P. 206.5 and
206.6 (reproduced at Appendix “A” hereto). As a result of this
failure, [Taxpayer’s] pre-trial Motion to Quash Appeal was never
submitted to the trial court for disposition prior to trial. See
C.C.R.C.P. 106.6 (“To have any matter submitted to the Court for a
decision, a party shall file with the Prothonotary a Praecipe for
Determination.”).
(District’s Br. at 6.)
4
arguments were not supported by the evidence and that the recommendations were
not discriminatory, but were simply properties that were underassessed by more than
$1 million. Id. Additionally, the trial court reasoned that the evidence presented did
not comport with its reading of Valley Forge Towers Apartments N, LP v. Upper
Merion Area School District, 163 A.3d 962 (Pa. 2017). (R.R. at 117a-18a.)
Following trial, on February 4, 2019, the trial court issued its decision
upholding the fair market value and resulting assessment of the Property. (O.R. at
Item No. 17.) The trial court found that in 2018, the fair market value of the Property
was $1,850,000.00 and the assessed value was $980,500.00, while the 2019 fair
market value was again $1,850,000.00 and the assessed value was $949,050.00. Id.
On February 26, 2019, Taxpayer appealed to this Court. (O.R. at Item No. 18.) On
May 23, 2019, the trial court issued an opinion in support of its decision.5 (O.R. at
Item No. 20.) Instantly, Taxpayer only challenges the denial of the motion to quash.
Citing Valley Forge, the trial court explained that Taxpayer’s motion
was based on the contention that District’s scheme and practice in selecting properties
for tax assessment appeals was not constitutionally uniform. (Trial court op. at 3.)
5
As a side note, the trial court explained:
For reasons completely unknown to the undersigned but not in any
way, so far as we can tell, attributable to [T]axpayer, notice of the
filing of this appeal did not come to the attention of the undersigned
in a timely manner. Therefore, no order for the filing of a concise
statement of errors complained of on appeal was [filed]. From the
record, however, it would appear that only two (2) issues can possibly
be raised on appeal. First, [T]axpayer might challenge our
determination of value. Second, [T]axpayer may contend that the
appeal should have been quashed.
(Trial court op. at 1.)
5
The trial court explained that under Valley Forge, 163 A.3d at 978, a taxing authority
cannot implement a program appealing only assessments of a sub-classification of
properties according to property type, e.g., commercial, single-family residential, or
industrial. (Trial court op. at 4.) The trial court recognized that District had a
legitimate interest in maximizing revenue, but maintained that it was subject to
scrutiny under the Uniformity Clause. Id. Yet, the trial court explained the two
interests do not necessarily conflict and found that the evidence presented did not
bring District’s practices within Valley Forge’s prohibition against appeal policies
that make classifications based on property type and residency status. Id. The trial
court reasoned that Taxpayer did not show District had an established policy and that
District requested a review of all tax assessments within District and
recommendations on the most underassessed properties. Id. The trial court
recognized that all properties suggested were commercial ones but, in its view, that
fact alone did not “ipso facto” demonstrate a violation of the Uniformity Clause.
(Trial court op. at 5.) Lastly, the trial court explained that the disparity was most
likely attributable to District’s request to appeal only assessments that would be
worth the cost of the appeal. Id. Taxpayer appealed to this Court on February 26,
2019.
Discussion
On appeal,6 Taxpayer raises three issues: (1) whether District violated
public policy and applicable law by failing to enact any policy for the selection of
6
“This Court’s review in a tax assessment appeal is limited to determining whether the trial
court abused its discretion, committed an error of law or reached a decision not supported by
substantial evidence.” Maula v. Northampton County Division of Assessment, 149 A.3d 442, 444
(Pa. Cmwlth. 2016) (quoting Sher v. Berks County Board of Assessment Appeals, 940 A.2d 629,
(Footnote continued on next page…)
6
assessment appeals; (2) whether District violated the requirements of the Uniformity
Clause by adopting a monetary threshold for determining whether to file an
assessment appeal which exclusively targeted properties with an actual market value
of more than $1 million; and (3) whether District violated the requirements of the
Uniformity Clause by implementing an assessment appeal selection scheme that
systematically subjected commercial properties to disparate treatment.7
Uniformity Challenge
We first address the contention that District’s selection process violated
the Uniformity Clause of the Pennsylvania Constitution, Pa. Const. art. VIII, §1.
Taxpayer maintains that District violated the Uniformity Clause in two ways: (1) by
appealing the assessments of only commercial properties, and (2) setting a monetary
threshold targeting properties underassessed by $1 million.
Taxpayer first argues that Valley Forge stands for the proposition that
taxing authorities cannot treat different property sub-classifications in a disparate
manner. Taxpayer notes that in Valley Forge, the school district appealed only
commercial properties and our Supreme Court found that practice to be
unconstitutional. Taxpayer maintains that the Uniformity Clause can be violated in
(continued…)
632 n.4 (Pa. Cmwlth. 2008)). “Substantial evidence is such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.” Norwegian Township v. Schuylkill County
Board of Assessment Appeals, 74 A.3d 1124, 1128 n.3 (Pa. Cmwlth. 2013) (citation omitted). Our
review of legal issues is plenary. Valley Forge, 163 A.3d at 969.
7
Taxpayer also argues that the trial court allegedly erred in applying a rational basis
standard. This argument is subsumed in our discussion of the Uniformity Clause and its application
to the facts of this case.
7
practice and without a formal policy in place. It also argues that under Valley Forge,
all real estate constitutes a single class entitled to uniform treatment and similarly
situated taxpayers should not be treated differently by taxing authorities. It explains
that all property within a taxing district is a single class and cannot be subject to
different, intentional, or systematic sub-classification. Specifically, Taxpayer points
to the language in Valley Forge that “it follows that a taxing authority is not
permitted to implement a program of only appealing the assessments of one sub-
classification of properties, where that sub-classification is drawn according to
property type––that is, its use as commercial, apartment complex, single-family
residential, industrial, or the like.” 163 A.3d at 978. Based on the foregoing,
Taxpayer argues that the appeals of commercial properties in the present case are
unconstitutional.
Taxpayer maintains that the monetary value of property can never be
made a basis for the imposition of an unequal burden and, thus, such classifications
violate the Uniformity Clause. Taxpayer argues that property value is an illegal basis
upon which to base an assessment, and, thus, uniform valuation of properties within
the same class and territorial limits must produce as nearly as may be a uniform
result. Taxpayer maintains that the property value classification here is
unconstitutional.
Conversely, District maintains that its action in appealing the
assessments did not violate the Uniformity Clause. District argues that a cost/benefit
analysis does not run afoul of the Uniformity Clause, because there is no restriction
on the methodology in determining whether to appeal a particular assessment.
Further, District asserts that a methodology that narrows the class of properties
evaluated for appeal based on economic thresholds does not violate the Uniformity
8
Clause. Thus, District maintains that its use of a similar methodology based upon a
cost/benefit analysis is also constitutional.
I. The Uniformity Clause Generally
Historically speaking, unfair taxation is at the very heart of what sparked
this great nation––for our forefathers decried as tyranny the practice of unfair
taxation. The Uniformity Clause reflects this principle. The Uniformity Clause
provides in full: “[a]ll 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.” Pa. Const. art. VIII, §1.8 The Uniformity Clause ensures that “a
taxpayer should pay no more or no less than [the taxpayer’s] proportionate share of
the cost of government.” In re Sullivan, 37 A.3d 1250, 1254-55 (Pa. Cmwlth. 2012)
8
It has been said that
[w]hile every tax is a burden, it is more cheerfully borne when the
citizen feels that he is only required to bear his proportionate share
of that burden measured by the value of his property to that of his
neighbor. This is not an idle thought in the mind of the taxpayer,
nor is it a mere speculative theory advocated by learned writers on
the subject; but it is a fundamental principle written into the
Constitutions and statutes of almost every state in this country.
School District of Philadelphia v. Board of Revision of Taxes, 217 A.3d 472 (Pa. Cmwlth. 2019)
(citing Delaware, L. & W. Railway Company’s Tax Assessment 73 A. 429, 430 (Pa. 1909)).
Similarly, we recognize “the general principle that taxpayers should pay no more or less than their
proportionate share of government.” Valley Forge, 163 A.3d at 972 (quoting Downingtown Area
School District v. Chester County Board of Assessment Appeals, 913 A.2d 194, 199 (Pa. 2006)).
9
(quoting Deitch Co. v. Board of Property Assessment, Appeals & Review of
Allegheny County, 209 A.2d 397, 401 (Pa. 1965)).9
Our Supreme Court’s decision in Valley Forge controls the disposition
of the instant matter. In Valley Forge, this Court considered whether a taxing
authority, under the Uniformity Clause, could selectively appeal only the assessments
of commercial properties, while refraining from appealing the assessments of other
property types. 163 A.3d at 966. There, the school district decided to appeal the
assessments of some properties within its boundaries, including the apartment
complex at issue. Id. It retained a third-party firm to advise it on which properties to
appeal. Id. The third-party firm concentrated solely on commercial properties
including apartment complexes. Id. The focus on commercial properties resulted in
greater tax revenue increases than doing the same to underassessed single-family
homes. Id.
While the tax appeals were pending, the appellant filed a complaint
seeking declaratory and injunctive relief alleging the school district violated the
Uniformity Clause by only appealing the assessment of commercial properties. Id. at
967. The school district filed preliminary objections, which were sustained by the
common pleas court. Id. This Court affirmed the common pleas court. Id. at 968;
see Valley Forge Towers Apartments N, LP v. Upper Merion School District, 124
A.3d 363 (Pa. Cmwlth. 2015), rev’d, 163 A.3d 962 (Pa. 2017). Our Supreme Court
reversed and held that the school district’s appeal policy violated the Uniformity
Clause.
9
“Some practical rough uniformity with a limited amount of variation is permitted.” Clifton
v. Allegheny County, 969 A.2d 1197, 1211 (Pa. 2009) (citing Beattie v. Allegheny County, 907 A.2d
519, 530 (Pa. 2006)).
10
The Court explained that it is an “established feature of Pennsylvania
uniformity jurisprudence that ‘all real estate is a constitutionally designated class
entitled to uniform treatment and the ratio of assessed value to market value adopted
by the taxing authority must be applied equally and uniformly to all real estate within
the taxing authority’s jurisdiction.’” Valley Forge, 163 A.3d at 973 (quoting
Westinghouse Electric Corporation v. Allegheny County Board of Property
Assessment, Appeals & Review, 652 A.2d 1306, 1314 (Pa. 1995)). Importantly, the
Court clarified its holding in Downingtown and explained that
the Uniformity Clause entails a “prevailing requirement that
similarly situated taxpayers should not be deliberately
treated differently by taxing authorities.” Downingtown, [],
913 A.2d at 201 (emphasis [in original]). In this respect,
Downingtown explained that, “[i]n this context, the term
‘deliberate’ does not exclusively connote wrongful conduct,
but also includes any intentional or systematic method of
enforcement of the tax laws.” Id. at 201 n.10 (emphasis [in
original]).
***
[W]e find it useful to summarize two principles articulated
in Downingtown and Clifton which are presently relevant.
First, all property in a taxing district is a single class, and,
as a consequence, the Uniformity Clause does not permit
the government, including taxing authorities, to treat
different property sub-classifications in a disparate manner.
See Clifton, [] 969 A.2d at 1212; accord Westinghouse
[Electric Corporation], [] 652 A.2d at 1314. Second, this
prohibition applies to any intentional or systematic
enforcement of the tax laws, and is not limited solely to
wrongful conduct. See Downingtown, [] 913 A.2d at 201
n.10 (citing Beattie, [] 907 A.2d at 523).
Valley Forge, 163 A.3d at 975.
In sum, the Court articulated the following relevant principles: (1) under
the Uniformity Clause, all property within a taxing district is a single class and, as
11
such, may not be treated in a disparate manner; (2) similarly situated taxpayers should
not be deliberately treated differently by taxing authorities; and (3) deliberate does
not exclusively connote wrongful conduct, but includes any intentional or systematic
method of enforcement of the tax laws.10 The Court further explained that:
From the two Downingtown/Clifton precepts we have
discussed—that all real estate in a taxing district forms a
single collective class to be treated uniformly, and that
systematic disparate enforcement of the tax laws based on
property sub-classification, even absent wrongful conduct,
is constitutionally precluded—it follows that a taxing
authority is not permitted to implement a program of only
appealing the assessments of one sub-classification of
properties, where that sub-classification is drawn
according to property type—that is, its use as commercial,
apartment complex, single-family residential, industrial, or
the like. We do not overlook that Section 8855 gives the
[s]chool [d]istrict a statutory right to appeal assessments;
our point is that this alone cannot justify an action which
the Uniformity Clause prohibits.[] The restrictions imposed
by that aspect of our organic law limit the manner in which
otherwise legitimate statutory powers may be utilized in
practice. See Downingtown, . . . 913 A.2d at 204
(confirming that demands of uniformity take precedence
over statutory requirements (quoting [In re Brooks
Building, 137 A.2d 273, 276 (Pa. 1958)]); see also Alco
Parking Corp. v. City of Pittsburgh, . . . 307 A.2d 851, 856
([Pa.] 1973) (reciting that the Commonwealth and
its political subdivisions are subject to uniformity
requirements when they exercise their taxing powers), rev’d
on other grounds, 417 U.S. 369, . . . (1974); [Delaware], . .
. 73 A. at 430 (noting that tax uniformity principles, which
10
Taxpayer also argues that the trial court erred in requiring it to prove discriminatory
conduct under an allegedly incorrect higher standard than the law requires. This issue has been
subsumed in our discussion of Valley Forge.
12
require substantial tax equality, apply to the Legislature, the
courts, and taxing authorities).
Valley Forge, 163 A.3d at 978. (emphasis added). In other words, the Court
articulated the balance struck between a school district’s rights under Section 8855
and the Uniformity Clause. Finally, the Court observed that
the limitations on disparate treatment imposed by the
Uniformity Clause are not merely formal or abstract in
nature. Although using public funds wisely and obtaining
needed revenues are important objectives, salutary
governance also requires attention to other substantive
aims. The government must be concerned with ensuring a
rough equalization of tax burdens under a structure in
which taxes are imposed, adjusted, and collected equitably.
Thus, as “every tax is a burden,” [Delaware], . . . 73 A. at
430, it is important that the public has confidence that
property taxes are administered in a just and impartial
manner, with each taxpayer contributing his or her fair
share of the cost of government. This lends legitimacy to
the property[]tax system in the eyes of the public which, in
turn, tends to suppress both the desire to evade taxes and
the tendency to embark upon protracted litigation—which,
itself, consumes large quantities of societal resources.
Where there is a conflict between maximizing revenue and
ensuring that the taxing system is implemented in a non-
discriminatory way, the Uniformity Clause requires that the
latter goal be given primacy. Cf. Clifton, . . . 969 A.2d at
1228 (indicating that rough uniformity in property
assessment may not be submerged to the “legitimate
governmental interest in creating and preserving a stable
and predictable local real estate tax assessment system”).
Notably, however, the two objectives do not necessarily
conflict.
Valley Forge, 163 A.3d at 979-80. With these general principles in mind, we turn to
Taxpayer’s first argument that District violated the Uniformity Clause by appealing
the assessments of only commercial properties.
13
II. The Validity of Property Type Classifications under the Uniformity
Clause
As stated, Taxpayers raise the question of whether the alleged property
type classification and the monetary classification are permissible under the
Uniformity Clause. We review the alleged property sub-classification first.
We conclude that District’s appeal practices did not violate the
Uniformity Clause. Under Valley Forge, District’s actions were constitutionally firm.
The record reflects that District intentionally disregarded the type of property and,
thus, it cannot be said that District’s actions in appealing the assessments of
commercial properties were intentional. Where, as here, a taxing authority
intentionally disregards the type of property when deciding what property
assessments to appeal, its conduct is inherently not deliberate. Moreover, District’s
actions did not systematically target commercial properties, but, rather, only focused
on properties that would be worth the cost and expense of an appeal. Valley Forge
makes it abundantly clear that there is a balance to be struck between a school
district’s ability to appeal an assessment and the Uniformity Clause. Thus, a school
district’s policy that attempts to be fiscally responsible by only appealing assessments
that would generate enough revenue to justify the cost of the appeal does not violate
the Uniformity Clause.
Recently, in Punxsutawney Area School District v. Broadwing Timber,
LLC (Pa. Cmwlth., No. 1209 C.D. 2018, filed October 29, 2019) (unreported),
petition for allowance of appeal pending (Pa., No. 427 WAL 2019, filed November
14
29, 2019), we encountered a similar scenario.11 There, the taxpayer, Broadwing
Timber, LLC (Broadwing), owned around 2,600 acres of land. Slip op. at 2. The
school district filed an assessment appeal asserting that the property was
underassessed. Id. The local board of assessment appeals did not change the
assessment. Id. The school district appealed and a bench trial was held. Id. at 2-3.
At the bench trial, the school district’s business administrator testified as to the
methods used to determine whether to appeal a property’s assessment. Id. at 3.
The method was described as follows. The business administrator
received monthly checks for the school district’s portion of realty transfer taxes paid.
Id. Most transfers of property within the school district resulted in tax revenue of less
than $1,000.00; accordingly, the business administrator noticed transfers above that
amount. Id. at 3-4. Using this process, the business administrator noticed a transfer
tax payment of around $25,000.00. Id. at 4. Without considering the type of property
involved, the business administrator calculated the potential increase in revenue that
could be realized from the reassessment of the property. Id. After review by the
superintendent and solicitor, the school district determined that the monetary benefit
of the tax increase outweighed the likely costs of the tax assessment appeal. Id.
The discovery of the initial underassessment prompted the business
administrator to search for others. Id. The assessment of a local Walmart was
appealed using the same method described above. Id. at 4-5. The business
administrator explained that other properties came to her attention in a similar way,
and she continued to disregard the nature of the property’s ownership or zoning. Id.
11
Punxsutawney is an unreported opinion. Under section 414(a) of this Court’s Internal
Operating Procedures, an unreported opinion may be cited for its persuasive value. 210 Pa. Code
§69.414(a).
15
at 5. Furthermore, the business administrator stated that she did not use a specific
monetary threshold, but looked at the amount of the transfer tax to determine whether
to file an assessment appeal. Id. at 6. She explained the decision to file an appeal
was “strictly based on possibility of revenue versus the expense of appealing it” and
that it was a “purely financial decision.” Id.
An appeal was then taken on Broadwing’s property. The business
administrator explained that she had become aware of Broadwing’s property in a
similar manner. Id. at 5. “Using the same method as before, and without inquiring
into the [p]roperty’s zoning, ownership, or type, [the] business administrator
calculated the estimated sale price” and concluded that the increase in revenue
outweighed the cost of an appeal. Id. The business administrator testified that,
although a residential property had not yet had its assessment appealed under her
method, the school district would not refrain from appealing a residential assessment
so long as it was financially viable. Id. at 6-7. The Court of Common Pleas of
Jefferson County found that, based on Valley Forge, the method described by the
business administrator did not violate the Uniformity Clause. Id. at 8. Broadwing
appealed the decision to this Court.
We considered the question of whether the school district’s practice
which resulted in the appeals of only commercial or commercially used properties
violated the Uniformity Clause. We concluded
that the [d]istrict’s practice thus far has resulted in appeals
of commercial or commercially[]used properties is not
determinative where that practice is implemented or carried
out without regard to the type or ownership of a property.
The [d]istrict relies on the occurrence of a triggering event
to bring a potentially underassessed property to its
attention. So far, no sale of residential properties has
resulted in a high enough realty transfer tax to warrant
16
review, and Broadwing has not presented evidence to the
contrary. That is not to say that none will in the future, and,
based on [b]usiness [a]dministrator’s credited testimony, if
one does, the same process will be used to determine
whether that property's assessment should be appealed.
Such result is consistent with East Stroudsburg [Area
School District v. Meadow Lake Plaza, LLC (Pa. Cmwlth.
No. 371 C.D. 2018, filed October 17, 2019), petition for
allowance of appeal pending (Pa., No. 723 MAL 2019,
filed November 15, 2019)], wherein we rejected the
taxpayers argument that, even if the threshold was facially
neutral, it resulted in the appeal only of commercial
properties based on the credited evidence presented by the
school district that it would have appealed any residential
property’s assessment had any met the threshold.
Punxsutawney, slip op. at 21-22 (citation omitted).
Our conclusion in Punxsutawney is persuasive and applicable here,
because the actions of District are similar to those of the school district in
Punxsutawney. First, just as the school district in Punxsutawney did not base its
decision to appeal the assessment based on the type of the property, neither did
District. Specifically, District directed its consultant as follows, “[p]lease do not limit
your review to any particular class of properties in the [s]chool [d]istrict, but review
all classes of properties including commercial, residential, and otherwise.” (R.R. at
92a.) In the same likeness, both District and the school district in Punxsutawney
disregarded the nature of the property. As we explained above, this is in accord with
our Supreme Court’s holding in Valley Forge, because District’s disregard of
property type cannot logically equate to unlawful treatment based upon property type.
Moreover, the facially neutral action employed by District is not
sufficient to result in a violation of the Uniformity Clause. As in Punxsutawney,
there is no indication District would not have appealed the assessment of residential
properties in the event that such properties would have fallen within its fiscal
17
parameters. District is concerned with maximizing its revenue, as was the school
district in Punxsutawney. The mere fact that all appealed properties were commercial
does not per se create a violation of the Uniformity Clause. This is especially so in
light of District’s intentional disregard for the nature of the property. Therefore, this
Court concludes there is no violation of the Uniformity Clause with respect to a
property type classification.
III. The Validity of Monetary Thresholds under the Uniformity Clause
Whether monetary thresholds violate the Uniformity Clause requires a
separate analysis. Our Supreme Court in Valley Forge specifically left open the
question of whether monetary thresholds violated the Uniformity Clause. 163 A.3d at
979.12 Previously, this Court has concluded that they do not.
In In re Springfield School District, 101 A.3d 835 (Pa. Cmwlth. 2014),
VMDT Partnership (VMDT) similarly argued that the school district violated the
Uniformity Clause in selecting a sub-classification of properties for assessment
appeals. The school district appealed the assessments of two VMDT properties. Id.
at 839. In order to select which properties to appeal, the school district reviewed
12
The Supreme Court stated verbatim:
We pause at this juncture to clarify that nothing in this opinion
should be construed as suggesting that the use of a monetary
threshold—such as the one challenged in Springfield—or some
other selection criteria would violate uniformity if it were
implemented without regard to the type of property in question or
the residency status of its owner.[] Such methodologies are not
presently before the Court.
Valley Forge, 163 A.3d at 979 (footnote omitted).
18
interim assessment reports and monthly real estate transfer reports, comparing sale
prices to implied market values. Id. at 840. The school district selected sale prices
which were $500,000.00 or greater than the market value for possible appeals
because this justified the costs of the assessment appeals. Id. VMDT argued that this
policy violated the Uniformity Clause. Id. at 847.
We concluded that the school district’s use of the $500,000.00 threshold
was based upon the reasonable financial and economic considerations of increasing
its revenue, balanced against the costs of filing assessment appeals. Id. at 849.
Moreover, this Court concluded that, although the monetary threshold would mostly
subject commercial properties to assessment appeals, this fact did not warrant a
different conclusion. Id.
In Valley Forge, our Supreme Court addressed this Court’s decision in
Springfield.13 Nevertheless, our Supreme Court declined to decide the issue of
13
With regard to this Court’s decision in Springfield, our Supreme Court stated:
Springfield made this interpretation of Downingtown explicit,
stating that “[t]he Uniformity Clause ‘does not require equalization
across all sub-classifications of real property.’ ” Springfield, 101
A.3d at 849 (quoting Downingtown, . . . 913 A.2d at 201 n.9). In
fact, however, the Downingtown footnote quoted in Springfield had
only characterized the federal Equal Protection Clause [U.S. Const.
amend. XIV] in such terms. It never indicated that the Uniformity
Clause permits the government to sub-classify properties since, as
even Springfield acknowledged, “[u]nder the Uniformity Clause,
all real estate must be treated as a single class entitled to uniform
treatment.” Id. at 847 (citing Clifton, . . . 969 A.2d at 1212).
***
Relatedly, the Springfield court also addressed the standard for
determining the permissibility of a government program which, in
its operation, treats different property sub-classifications in a
(Footnote continued on next page…)
19
whether monetary classifications would run afoul of the Uniformity Clause.
However, this Court recently answered that question in East Stroudsburg.
In East Stroudsburg, the taxpayers owned property within the East
Stroudsburg School District. Id. at 2. In 2016, the school district began filing
assessment appeals in an attempt to increase revenue. Id. at 3. The school district
wanted to assure that it was targeting properties for which the assessment appeals
would generate sufficient revenue to justify the costs of appeals. Id. Thus, the school
district decided that it would target “any and all properties” that would generate at
least $10,000.00 in additional revenue. Id. at 4. Significantly, we noted that the
school district would have filed assessment appeals relating to residential properties
had any residential properties met the threshold. Id. at 4.
(continued…)
disparate manner. It acknowledged Downingtown’s explanation
that the Uniformity Clause entails a “prevailing requirement that
similarly situated taxpayers should not be deliberately treated
differently by taxing authorities.” Downingtown, . . . 913 A.2d at
201 (emphasis added). In this respect, Downingtown explained
that, “[i]n this context, the term ‘deliberate’ does not exclusively
connote wrongful conduct, but also includes any intentional or
systematic method of enforcement of the tax laws.” Id. at [] 201
n.10 (emphasis added). Inexplicably, Springfield referenced this
portion of Downingtown as indicating that “[t]he term ‘deliberate’
in this context connotes ‘wrongful conduct,’ ” Springfield, 101
A.3d at 847 (emphasis added)—the opposite of what Downingtown
had actually said.
Valley Forge, 163 A.3d at 974–75 (emphasis in original). However, our Supreme Court did not
disagree with Springfield’s approval of the use of a monetary threshold to decide which properties’
assessments to appeal. Id. at 975 n.13.
20
The taxpayers challenged the selection process as unconstitutional in
violation of the Uniformity Clause, alleging that the school district only filed
assessment appeals of commercial properties. Id. at 6. We concluded that “nothing
in our Supreme Court’s analysis in Valley Forge [] precludes application of a
reasonable monetary threshold for assessment appeals, based on an estimate of the
minimum potential revenue gain that will make a tax assessment appeal cost-
effective.” Id. at 11. We also rejected the taxpayer’s argument that, even though the
policy was facially neutral, it ran afoul of the Uniformity Clause because only
commercial properties had their assessments appealed. Id. This Court pointed out
that the court of common pleas credited the testimony that the school district searched
“for any and all properties” meeting the $10,000.00 threshold, and would have filed
an assessment appeal of a residential property so long as it came within the threshold.
Id. at 12. Moreover, we concluded that the “$10,000[.00] threshold [was] reasonable
and [did] not violate the uniformity requirement of the Pennsylvania Constitution,
despite the fact that in this particular instance, only commercial properties in the
[s]chool [d]istrict met that threshold.” Id. at 13.
Thus, our decision in East Stroudsburg authorized the use of such
thresholds. Our holding in East Stroudsburg plainly determined that, even though a
monetary threshold resulted in only commercial properties having their assessments
appealed, such practice did not violate the Uniformity Clause.
As we concluded in Springfield and East Stroudsburg, monetary
thresholds do not violate the Uniformity Clause. Here, District was using a monetary
threshold only for the purpose of making prudent fiscal decisions, and not for the
purpose of discriminating against sub-classes of properties. Because District
21
deliberately ignored the property type and focused only on its fiscal considerations,
District did not violate the Uniformity Clause.
IV. The Validity of District’s Alleged Assessment Appeal Policy under the
Uniformity Clause
Taxpayer also argues that District violated the Pennsylvania Sunshine
Act14 and the Public School Code of 194915 by failing to generally enact or adopt an
appeal policy in compliance with either statute’s provisions. District argues that
because this issue was not raised below it is waived.16 We agree.
It is axiomatic that “[i]ssues not raised in the lower court are waived and
cannot be raised for the first time on appeal.” Pennsylvania Rule of Appellate
Procedure 302, Pa.R.A.P. 302. See, e.g., Philadelphia Correctional Officers
Association v. Pennsylvania Labor Relations Board, 667 A.2d 459, 463 (Pa. Cmwlth.
1995) (declining to hear appellant’s constitutional issues that were not raised before
the Pennsylvania Labor Relations Board or the lower court). Furthermore,
[i]t is well established that “[i]n order to preserve an
issue for appeal, a litigant must make a timely, specific
objection at trial and must raise the issue on post-trial
motions.” Dennis v. Southeastern Pennsylvania
Transportation Authority, 833 A.2d 348, 352 (Pa.
Cmwlth. 2003) (emphasis added). Issues not preserved
for appellate review cannot be considered by this Court,
14
65 Pa.C.S. §§701-716.
15
Act of March 10, 1949, P.L. 30, as amended, 24 P.S. §§1-101 - 27-2702.
16
Taxpayer did not respond to District’s assertion of waiver in its reply brief.
22
even if the alleged error involves “a basic or fundamental
error.” Id.[17]
Municipal Authority of Borough of Midland v. Ohioville Borough Municipal
Authority, 108 A.3d 132, 136-37 (Pa. Cmwlth. 2015) (emphasis in original.)18
Here, the record is devoid of any instance where Taxpayer raised issues
under the Sunshine Act or the Public School Code of 1949 before the trial court, and,
thus, those issues have been waived and cannot be considered.
Conclusion
For the foregoing reasons, this Court concludes that District’s action in
appealing the assessment of Taxpayer’s property did not violate the Uniformity
Clause.
17
See Dilliplaine v. Lehigh Valley Trust Company, 322 A.2d 114, 117 (Pa. 1974).
18
Nevertheless, if we were to consider these issues we would find Taxpayer’s arguments
unavailing. In Punxsutawney, we stated,
We begin with [taxpayer’s] arguments that due to the lack of a
formalized or written policy and/or specific criteria or a set monetary
threshold, the [school d]istrict’s practice is arbitrary. We do not
read Valley Forge as requiring a formal or written policy or
criteria. All Valley Forge requires is that the “other selection
criteria” used by a taxing authority, whether a monetary threshold or
other methodology, be “implemented without regard to the type of
property in question or the residency status of its
owner.” 163 A.3d at 979. Thus, the lack of such formal or written
policy does not warrant reversal.
Punxsutawney, slip op. at 18 (emphasis added). We find our disposition in Punxsutawney on this
same issue persuasive, and thus, would follow it. Furthermore, because we have held that District
did not violate the Uniformity Clause by appealing the assessments of only the identified properties,
the burden did not shift to District to prove that its policy or actions were not discriminatory,
therefore, whether District had a policy is of no moment.
23
Accordingly, the order of the trial court is affirmed.
________________________________
PATRICIA A. McCULLOUGH, Judge
24
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Kennett Consolidated School District :
: No. 253 C.D. 2019
v. :
:
Chester County Board of Assessment :
Appeals, Chester County, PA :
:
Appeal of: :
Property Owner Autozone :
Development Corp. :
ORDER
AND NOW, this 28th day of February, 2020, the February 4, 2019,
order of the Court of Common Pleas of Chester County is affirmed.
________________________________
PATRICIA A. McCULLOUGH, Judge