Bad News Coming in Next Round of City Tax Bills: Lost Ratables Will Produce Substantial Increase
Monday, February 4, 2013 • 6:27pm
PATERSON, NJ – The total value of Paterson’s taxable property fell by $378 million as a result of the 7,141 tax appeals that were filed last year, according to the Passaic County Tax Administrator Jay Schwartz.
The represents about a four-percent drop in the city’s total assessments, which were about $8.91 billion last year.
In order to offset the tax revenue lost from the appeals, city property owners will have to pay the difference in their next two tax bills, municipal officials said.
City finance officials are still calculating exactly how much the burden will be, said Business Administrator Charles Thomas. In 2012, when the city lost $266 million in ratables through tax appeals, homeowners had to pay an average of an extra $284 in their February and May tax bills. The increase could exceed $400 this year, based on the 2012 numbers. That’s an increase that would come solely from the lost ratables, and not from any change in budget spending.
Paterson has had record numbers of tax appeals each of the last two years, as many property owners have sought relief from inflated assessments that were done in 2006, before the region’s real estate market tanked. For more than a year, municipal officials have been discussing the need to conduct a citywide revaluation to bring the assessments in line with the current market.
But the City Council – in a split vote – rejected moving ahead on the $2.1 million financing plan for the revaluation at its last meeting in January. Opponents of the revaluation say the city tax assessor’s office lacks the expertise, staff and technology to prevent the numbers from a new revaluation from becoming outdated rather quickly. Others argue the city is making the necessary changes in the tax office and that Patersonians cannot afford to wait much longer on a revaluation.
“We need to go forward with the reval,’’ Thomas said. “The entire city needs to be revalued, as opposed to just certain individuals doing it.”
“This year, you’re going to see 10,000 appeals,’’’ predicted Councilwoman Ruby Cotton, who voted in favor of the revaluation funding. “There are more and more people who understand how to do it. They’re getting more educated. They’re hearing from their friends who got their taxes lowered. That’s why we have to get going on this reval, because it’s only going to get worse next year.’’
“This only proves that we need the software’’ that automatically adjusts property values to reflect changes in the real estate market, said Councilman Andre Sayegh, who voted against the revaluation financing. “This way we could reduce the need for people to file tax appeals.’’
People who don’t file tax appeals end up paying a disproportionately higher share of city taxes, officials said.
In an effort to try to bolster the city’s ratable base by attracting new businesses to Paterson, Mayor Jeffrey Jones last September hired a new economic development director, Ruben Gomez.
Thomas said the administration was working on a plan to use tax abatements as incentives for companies to come to the city. “I think the council recognized the need,’’ Thomas said.
Councilman William McKoy said tax incentives might be a viable option in some instances. But McKoy said such deals needed to be evaluated on a case-by-case basis.