Some Jersey City taxpayers who are recovering from a recent tax increase may get hit with even higher taxes starting in 2013, while others may get a break.
That’s because Jersey City is in the process of doing a revaluation of all real estate properties in the city. A reval is an assessment to determine the current market value of a property. Since the city has not conducted one since 1988, some people will find that their homes are worth more, so they will have to pay higher taxes. Others may pay less.
Usually, the goal of revaluation is to help the tax burden be more fairly shared by the properties.
The city has posted information on its website (www.cityofjerseycity.com) announcing the 18-month process is already underway, along with a detailed explanation of what a reval is. Also, they are sending out the information by mail along with the second quarter tax bill.
The new rate would apply on Jan. 1, 2013.
But residents in recent years have expressed concern that a reval will lead to them paying higher taxes on their properties because of a new assessment.
The city’s website notes that during a reval, approximately a third of the municipal properties will see their share of the tax burden go down, a third will see their share of the tax burden go up, and a third will see no change.
Yet, it is little consolation to downtown City Councilman Steven Fulop, who thinks the city should reconsider going forward with a reval right now.
“To do this in the declining real estate market, will put stress on homeowners,” Fulop said.
Taxes in Jersey City already were raised recently to help bridge the $42 million gap in the $509 million municipal budget.
The revaluation process
When a municipality carries out a revaluation, the first step by state law is that the city’s tax assessor conducts a sales study to see if assessments are consistent with each other and submits it to the state. If there is not much evidence of uniformity in the study carried out by the tax assessor, then the revaluation takes place.
Next, the city notifies the public that a revaluation will occur, informing residents as it is doing now with the mailings and posting on the city’s website.
Then a private company is hired to carry out the revaluation of the properties, and a second company will carry out the inspections necessary on properties throughout the city to report to the appraisers. The inspection is scheduled to start in November and run through April 2012.
Once values of properties have been determined by the revaluation firm, the city’s Tax Assessor will conduct a review, and either approve the values, or modify them – whether it is an increase or decrease. After the review and modification are completed, the revaluation firm mails a notification letter to each property owner in the city to inform them of the new assessment, or value of the property.
Currently, the city’s municipal tax rate is 32.85 per $1,000 assessed value of property owned.
If property owners disagree with the assessment, then they can appeal the assessment, not the tax amount, to the Hudson County Board of Taxation.
The tax rate in general will be adjusted when the reval is done. The new assessment value will be applied to tax bills starting on Jan. 1, 2013.
City Council weighs in
The City Council also received a copy of Healy’s letter to the Hudson County Board of Taxation. Council members weighed in last week on the affect this revaluation will have on their constituents.
Fulop said that homeowners who get a new assessment could face higher taxes, forcing them to sell and move out of the city. “The timing is wrong,” he said.
His colleague, Heights Councilman Bill Gaughan, disagreed. Gaughan is a homeowner and also owns the Houghton Funeral Home on Summit Avenue in Jersey City.
“I worked hard to convince the mayor to do the revaluation,” Gaughan said. “We are only collecting 26 percent of the tax revenues that we should be collecting.”
State law does not specify an exact timeframe on when revaluations should take place, but recommends that a city conduct a reval once every few years if the municipality finds that assessments vary by a large amount among properties.
Jersey City is not the only local town to have put off their reval. As revals are politically unpopular, they have also been put off in towns like Hoboken for more than two decades.
Jersey City homeowners, already facing tax increases due to cuts in state aid for cities and schools, fear the worst when the subject of revaluation comes up.
Yvonne Balcer – who along with her husband Charles owns their home on York Street in downtown Jersey City – has spoken at council meetings in recent years about the results of a revaluation they experienced in 1988. The memory still leaves a bitter taste for her.
“After the revaluation, our taxes went from $3,000 to $16,000,” Balcer said. “Several of my good friends who lived on the block ended up moving out.”
Balcer ended up refinancing her home, and thinks the next revaluation will force she and her husband out of town.
“I think a revaluation will never be fair in Jersey City,” she said.
Phil Rivo, who lives in a brownstone near Hamilton Park with his wife and two children, is a real estate agent. Rivo wants to stay in town but is worried of what the revaluation brings, especially when he thinks about his profession.
“I am busy these days getting a lot of calls, not positive ones, from people who want to sell their homes and condos but are not getting any takers,” Rivo said. “It won’t be any better when the revaluation hits.”
Ricardo Kaulessar can be reached at email@example.com.