Taxpayers: Your revaluation is coming
by D.R. Foster – November 05, 2008)
It’s common knowledge around the East Rutherford municipal building that Mayor James Cassella has done everything he can to put off a tax revaluation in the borough, and it’s worked. The standard throughout the state is about a decade between valuations. East Rutherford hasn’t reassessed in almost 18 years.
The administration’s reluctance to revalue from 1990 levels is popular with many residents. For a town with a small tax levy relative to its total budget, lower property values lead straightforwardly to lower taxes. At an average bill of $3,564.20 last year, East Rutherford homeowners enjoy the lowest property taxes in the area.
East Rutherford will conduct a revaluation after 18 years. Although the real estate market has dropped, residents should expect their house values to still double.
But state law requires property to be assessed at market rates, to ensure equitable taxation. By October, continued pressure from Trenton had prompted the mayor and council to take a begrudging step forward, declaring a “special emergency” and appropriating $185,000 for a revaluation.
Still, Cassella said the borough would take its time. The “special emergency” designation gives the town the legal leeway to spend the money over five years, which could further stretch out the process.
“It’s for in case we need to hire someone by the end of the year, so we can appropriate that money now, and it enables us to spread it out,” he said.
Cassella and the borough had been sitting on a New Jersey Tax Court order to reassess for about two years before the state’s Attorney General’s office stepped in.
“We’ve been ordered to do this for a number of years, we’ve passed a number of deadlines….I have been ignoring them and I’m going to continue ignoring them,” Cassella said of the state orders.
The next step for the borough is to choose an appraisal company and have tax maps approved by the state. Then the reassessment of the town’s thousands of properties and buildings can begin.
Cassella said he had “no idea” when the process would begin, and said the borough will wait on the state to set a new deadline before moving forward.
“The state received our maps, there were issues,” he said. “The state needs to approve the maps and set another deadline. It’s in their hands.”
With guidance from the state Treasury’s Division of Taxation, Bergen County orders reassessments when there is more than a 15 percent difference between average sale prices of home and the average assessed value of those homes at the time of sale.
According the County’s Board of Taxation, the “true” net value of East Rutherford’s ratables in 2007 was $1.653 billion, 78 percent more than the current assessed value of $927.8 million. Of South Bergen towns, only Carlstadt, with a true value over $1.118 billion (115 percent) in excess of its current assessed value, has a greater discrepancy. Rutherford, Lyndhurst and North Arlington all had assessed values that met or exceeded their “true” values in 2007.
When revaluations are undertaken during housing market booms, the results can be disastrous for New Jersey homeowners’ wallets.
According to the state’s Division of Taxation, during the 2003-2007 housing bubble, the average assessed home value in the state increased by 50 percent, and the average property tax bill by 30 percent, as nearly half of the state’s municipalities underwent revaluation.
Ridgewood reassessed in 2008, resulting in a 69.32 percent increase in the average assessed price of homes from 2001 values.
Conversely, dropping property values could help East Rutherford residents during the reassessment.
“The only bright spot in this economic situation is that it could help us in the reval,” Cassella said.
Property taxes are the major constituent of municipal, school and county budgets.