Is your property tax assessment way off? NJ towns look to annual assessments
Some New Jersey towns are starting to reassess their tax bases on an annual basis instead of every five or 10 years.
“You have to do a reassessment from time to time, but doing it on an annual basis is going to keep the data fresher and more accurate,” said Michael Darcy, executive director of the New Jersey State League of Municipalities.
He said doing a reassessment every year means “taxpayers are going to have some good confidence that they’re being taxed correctly, and it also keeps the municipal budgets reliable. They’re not going to be hit with a bunch of tax appeals, which may result in a towns having to rebate a lot of taxpayer money.”
Darcy pointed out the downside could be there is more work and annual expense that needs to be incurred.
He pointed out during the last recession, a lot of people wound up filing tax assessment appeals and winning.
“Towns were having a problem keeping up with the correct values on the properties because values were changing so rapidly,” he said.
“It may be the case in some communities now that their housing values are changing, either positive or negative, and they want to keep up with it because of the experience they found from the housing bubble.”
While many towns in Monmouth and Somerset counties have started doing annual reassessments, most other municipalities are not following suit.
Darcy pointed out towns may be reluctant to do this because “sometimes in a way to trim your budget you delay some maintenance, you delay some reassessments just as a way to trim your budgets.”
Matthew Clark, the Monmouth County tax administrator, said having towns do reassessments every five or 10 years just doesn’t make a lot of sense anymore.
“We can do much better, we can be more nimble,” he said.
Tax appeals in Monmouth County are now filed before a final budget is prepared, which helps ensure there is never a shortfall in collections.
Clark says that having towns do annual reassessments can help to stabilize their revenue because it won’t create a situation where emergency borrowing may have to take place.
And the trend is being looked on favorably by Moody’s Investor Service.
In a recent opinion, Moody’s said that “by annually reassessing their tax bases, the municipalities" – mainly in Monmouth and Somerset counties – "can save money in time in the long term. The moves are positive for the municipalities’ credit because it reduces tax appeals and tax refunds while improving budgeting accuracy.”
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com
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