County Assessing Stalled for Good Reasons
The September 6, 2018 Press article “Atlantic County push for county wide tax assessments stalled” reminds us of the old adage “The most important thing to do if you find yourself in a hole is to stop digging”.
As experts in the field of taxation, The Association of Municipal Assessors of New Jersey knows that the problems and solutions are neither simple nor obvious. We all want lower taxes. Towns and taxpayers should demand to know the financial impact that this plan will have. Here are some facts to consider before anyone picks up their shovel and starts digging.
The bill Assemblyman Vincent Mazzeo is proposing is not a new idea. The bill mandates an Atlantic county-wide tax assessment department exactly like the Gloucester County plan, arguing that by transferring tax assessment responsibilities from the towns to the county, it will save Atlantic County taxpayers money by consolidating and reducing the volume and dollars lost from tax appeals. However, the exact opposite is true, a county-wide plan would cost Atlantic County taxpayers more money to administer, not less.
In reality, the Gloucester plan has required property taxpayers to hire and pay for additional outside contractors since Gloucester lacks the resources to conduct in-house reassessments. In total from 2012 to 2017 Gloucester County authorized $3.4 Million in outside contracts for appraisal, legal, and revaluation inspections for the assessing department. In addition, the new assessment department added 20 new full time employees with pensions and benefits to the county budget.
What we also know is adopting the Gloucester plan will cost Atlantic County taxpayers $15.2 million dollars just to start the program with an estimated $3.5 million more each year thereafter. The county-wide assessing law for Gloucester earmarked $11 million repaid from the State to Gloucester for its expenses; $8 million in revaluation costs alone. There is no money left in that reimbursement fund. That means Atlantic County families will be saddled with nearly $20 Million dollars in spending in the first two years alone.
For example, currently of the 23 municipalities in Atlantic County, there are nine full time assessors and fourteen part time assessors, who do not receive costly benefits. However, under the Gloucester plan, Atlantic County taxpayers would be required to pay for 32 new full time county government positions with health and pension benefits.
This information alone should cause us to stop digging. However, there’s more to consider before adopting a plan specifically designed for Gloucester County. The differences between the counties are significant. Atlantic County is worth $5 billion more in net valuation, not including the casino values. There are approximately 50,000 more taxable properties in Atlantic County than Gloucester requiring Atlantic County to hire more employees. Atlantic County’s land area is 672 square miles versus 337 square miles in Gloucester, requiring more travel time from a centralized office and increasing vehicle costs and employee time.
Proponents for the Gloucester plan claim that a county based system will keep property values near 100% of value. Interestingly, the average ratios in both counties are currently in the high 90% range. Further, there is a misconception that a 100% ratio insulates a municipality from tax appeals. Though Atlantic County’s ratio is 98.48%, tax appeals still occur. The number of appeals has gone down naturally as the economy improves. Appeals filed at the Atlantic County Tax Board declined from 2016 to 2018 from 9,169 to 7,171. Atlantic City still accounts for nearly 50% of the appeals filed. By contrast, Atlantic County’s municipality with the highest number of properties, Egg Harbor Township, only had 11% of the total appeals and Hamilton Township only 1%.
Under a countywide assessing scenario, Atlantic City would consume most of the resources of a county office. To put it simply, 23 people go out to dinner; 22 order soup and one orders a five course meal but the bill is split evenly.
Property tax assessments require the same training, duties, technology, and methods, whether done at the municipal level or the county level. Transferring tax assessment responsibility to the county just means the county assessment office will likely employ current municipal assessors since these individuals have the license, knowledge, and experience to do the job.
Countywide tax assessment is stalled for good reason. Rather than reflexively grabbing a shovel and jumping into higher debt, the Atlantic County Executive, Atlantic County Board of Chosen Freeholders, and the Atlantic County Mayors Association have rightfully chosen to consider the facts and make the proper choice for you, the taxpayers.
Diane R. Hesley, CTA , President
Association of Municipal Assessors of New Jersey
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