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Controller Calls for Greater Accountability for County Property Tax Exemptions

Allegheny County Controller Chelsa Wagner released an audit Thursday of the Office of Property Assessments (OPA) that calls for greater accountability, increased transparency, and oversight of all tax relief and tax forgiveness programs. 

One of the key findings of the audit is that Wagner believes there currently is inadequate oversight for tax exemptions granted to non-profit and charitable organizations. The county is responsible for going out every three years to ensure a property’s tax-exempt status is still warranted. That, according to Wagner, isn’t happening.

“On these larger tax exempt properties, when you look at the fact that they account for about $95 million of lost revenue, based on exemption – many of them are warranted, if this county is just finding 1 to 2 percent of incorrect application, that’s $1 million to $2 million,” she said.

And that lost revenue, added Wagner, is unfair to the taxpayers of Allegheny County. Though in regard to those taxpayers, the controller had some good news.

“The homeowners program, specifically the homestead exemption is administered fairly well,” she said, “but we see the reason is because the onus is really on the homeowner to regularly maintain those records.”

Going forward Wagner’s office recommends also shifting the responsibility of proving tax-exempt qualification away from the county when it comes to large properties. Wagner is calling on the OPA to conduct a parcel-by-parcel review.

“And every organization that gets a tax exemption should show annually, by affidavit, that they are entitled still to that exemption. Like the administration of the homestead exemption, this would shift the onus to the entity that’s receiving that tax break.”

But even the homestead exemption program isn’t without its problems. There have been cases of people trying to claim the break on more than one property, when it can only be claimed on a primary residence. Wagner recommends the OPA implement procedures and safeguards to prevent fraud.

“They could require that somebody submit proof of residency, such as a driver’s license, voter registration, or utility bill.”

Wagner also called on the OPA to reinstate the ability search online property listings by owner name, because it helps communities and residents better identify problem property owners. That functionality was removed in recent years over privacy concerns, though Wagner said those could easily be fixed.

The audit also recommends OPA bring their technology up to speed by developing and implementing the use of an electronic database for documentation of all parcels that have been approved for abatement, exemption, and exclusion. That, said Wagner, would make it easier to ensure all exemptions are properly substantiated.

The Office of Property Assessments referred all questions to the County Executive's office, which has not returned calls for comment.