The Maryland Tax Court, the highest administrative review board for tax issues, has upheld the state's controversial triennial assessment program.
A three-judge panel ruled two weeks ago that the program did not violate the state's constitutional requirement for uniform assessments.
One of the group of seven Montgomery County taxpayers who first challenged the constitutionality and fairness of the triennial assessment program three years ago called the decision a "travesty of justice," and said the group was considering appealing it. If appealed, the case would go to Montgomery County Circuit Court.
The seven taxpayers challenged their assessments before the county Property Tax Assessment Appeals Board in 1980, charging that because their homes were among the first to be assessed in 1979 under the new program, they paid higher taxes than owners whose property was assessed in the second and third year of the implementation of the program.
The county board supported the landowners, but subsequently said it had no authority to decide whether the state assessment system was constitutionally valid. The case was then appealed to the tax court.
The triennial assessment system divides properties into three groups and reassesses each group once every three years, phasing in the increase in value over the following three years. Several of the landowners charged that they paid as much as $900 more in taxes on their property because it was in the first group than landowners paid on similar properties in the third group.
In a decision handed down Sept. 17, however, the tax court upheld the state's program, saying that "temporary disparities among properties under a cyclical assessment system are inevitable," and that they "do not render the system unconstitutional."
"Testimony at trial, through Robert Rudnick, supervisor of assessments for Montgomery County, clearly established that determinations made . . . in carrying out the triennial system were not discriminatory, irrational or arbitrary," said the court. "Only where the implementation of a cyclical reappraisal plan results in intentional discrimination, arbitrary action, constructive fraud or grossly unfair assessments are the constitutional provisions violated."
The petitioners claimed that Rudnick's office had arbitrarily chosen properties for the first group to be reassessed, something Rudnick denied in arguments before the court.
In its decision, the court supported Rudnick, saying, "Because we believe that there exists a rational basis for the classification of the residential property into three groups, petitioners have failed to meet their burden of proof in attacking the constitutionality of the triennial system as applied to their properties."
Rudnick said he was "satisfied" with the tax court's decision and pleased that the county's system was upheld.
"We have reassessed over 400,000 accounts since implementing this system, and if the court had found that the system was illegal, it would have been an administrative nightmare," said Rudnick. "We would have had to turn all the accounts back to 1979 levels. It would have been a mess."
Hays Gorey, one of the petitioners in the case, said that the tax court "ignored" evidence supporting their claim that the Montgomery implementation of the system was arbitrary and that he believes that could be the basis of an appeal.
"The court talked about the uniformity issue but never addressed the actual disparities in implementation that we had evidence for," said Gorey. "We were surprised that was not discussed by the court."
Robert Cohen, another petitioner, said that the implementation issue was second in importance only to the constitutionality question and "needed to be answered by the court." He agreed with Gorey that the court did not adequately explain its position on the "evidence of arbitrariness." "The key question is whether or not the administration of the program was constitutional, not whether the program was constitutional," said George Sponsler, another petitioner. "The court seems to believe that the disparities of this system are only temporary, but that is not true. I will never regain the $900 I lost. That was completely neglected by the court."
The petitioners have two more weeks to decide if they will appeal.
"You can stand on principle, but then there is the dollars-and-cents issue," said Sponsler. "I would stand to recoup only $900, and reproducing the transcript of the hearings on this thing would cost that much. I still think the law is on our side, but I may not be able to afford it."