New Thrills in Property Tax Administration

A perfect property tax assessor would have wings. The most daunting task facing a local assessor is to figure out how much every property– whether it’s a home, a business or a farm– is worth, and that can be hard to do just by walking around a property. As a Philadelphia tax administrator points out in yesterday’s New York Times, "if you have a dog, or a locked fence, we may not be able to get into your backyard to see something you’ve built."

The obvious solution is to get a bird’s eye view– and that’s exactly what many local property tax administrators are now doing. The city of Philadelphia has hired a company called Pictometry to fly a plane over the city once a year, taking enough low-altitude photographs to get a complete picture of the city’s tax base, which can then be converted into computer-accessible images. Lee County, Florida makes their Pictometry-generated photo database accessible on the web; try it here. (click on "pictometry online at left; free registration required)

The system does the hard work formerly done by a tax assessor on foot, by identifying visible changes in the way a property looks from the air (maybe a new garage, or a new wing of a house, or a new cell phone tower). By comparing new photographs with old photographs, the program can actually come up with an automatic list of properties that appear different from year to year, which assessors can then inspect to see what the difference is.

The annual cost for the city of Philadelphia? About $100,000 a year. One can assume, although the article doesn’t say, that the annual cost for a smaller jurisdiction would be a lot less.

If $100,000 seems like a lot, think of it as roughly the cost of two full-time assessors– neither of whom would likely have wings. Every tax has administrative costs, and the big cost item for the property tax is just figuring out how much things are worth in an environment where property owners are constantly improving their properties without telling their local tax administrator anything about it.

If this approach seems creepily intrusive, remember that the alternative is having a living, breathing assessor poking around your property every year. And the goal of this technology is a good one: a properly functioning property tax should start out by getting a precise estimate of what every property is really worth. Failing to do so makes a property tax less fair. Period.

At a time when few states measure their property tax base very accurately, and when some states are actually contemplating taking steps to intentionally make them even less accurate, local governments using Pictometry and similar technologies are taking an important step toward a fairer and more adequate property tax.