A taxing situation Residents angry over pending tax increase

If you’re a Jersey City resident, the last thing you want to hear is that your property taxes will be going up. If you’re the city’s business administrator, Brian O’ Reilly, the tax increase is several years overdue.

The increase of the city’s tax rate is already evident from a tax bill that was sent out two weeks ago to home and property owners in the city. The bill reflected an increase of 10 to 15 percent from the previous bill sent out in November. City property taxes are paid quarterly, with due dates on Feb. 1, May 1, Aug. 1 and Nov. 1.

The actual size of the overall tax increase during this fiscal year has not been decided, because the city is still looking for ways to fill their budget gap before voting on a final budget. But they are charging taxpayers under the assumption that taxes will rise significantly.

According to a letter from Mayor Jerramiah Healy sent with the tax bills, the increase is necessary to help plug an estimated $40 million hole in the budget, and is the result of hiring 162 additional police officers and 62 firefighters. The city has also embarked on the largest street paving project in city history.

But residents are angry that their taxes are going up at a time when they also are facing increases in municipal water, sewage and heating bills.

A representation of the taxation

Residents’ overall tax rate is affected by three budgets: the city budget (the one Healy has control over), the county budget (usually decided in June) and the school budget (usually decided in April).

The city’s overall tax rate in 2005, including city, county and school taxes, was $46.06 per $1,000 of assessed property value, so a home assessed by the city at $100,000 paid about $4,606 per year.

The tax rate for the current fiscal year has been projected to increase by as much as $6 per $1,000 or as low as less than $1. The city’s definitive tax rate will be set later this year by the time residents have to pay their third quarter calendar year tax bills.

Ed Toloza, the city’s tax assessor, said last week that the city’s ratable base (the total value of taxpaying properties) presently is $5.7 billion, up $300 million from the previously calculated tax base. That means that more people will be paying taxes, which means each individual will share less of the burden of the increase.

Defending the tax increase

Healy continued to defend the pending tax increase last week as something that is necessary to pay expenses. He also pointed out that a significant amount of time has passed since there was a tax increase in the city.

“It’s been eight, possibly 10 years since we had a tax increase,” Healy said. “It is long overdue. Not increasing the taxes is like a balloon that’s been filling up and up, and sooner or later, the air has to come out eventually. I guess I’m the one has to bite the bullet and raise taxes.”

But Healy also said that he is working with city officials to ensure that when the next tax bills are sent before May 1, the tax increase will not be as high as in the previous bill.

Healy’s 2006 first quarter (calendar year) tax bills went up over $400 from the 2005 fourth quarter calendar year bill, according to city tax records, from $1,257 to $1,691.

Healy said he didn’t believe taxes would increase in the next few years of his administration.

You can tax this!

City resident Juan Albornoz resides on Mercer Street with his wife. His first quarter calendar year 2006 bill went up almost $600 from the previous quarter. A homeowner in the city for the past 30 years, Albornoz said the tax increase did not surprise him because of what he claims is the inconstency of Jersey City politics.

“The city has been in a state of political anarchy in the last few years. We have so many people sitting as mayor,” said Albornoz. “We don’t have a constant form of government. What we really resemble is a banana republic.”

Albornoz went on to say, “The resource here is not bananas, but the salaries for police, firemen and municipal employees. Much of that money leaving the city, since most of these workers live outside the city.”

Albornoz’s suggestion is to target the biggest problem affecting the city’s financial state – abatements.

Abatements are direct tax payments a municipality gets each year that developers pay instead of conventional taxes. For years, Jersey City has granted abatements to developers with payment schedules of 20 to 30 years as incentive for developers to build in less desirable areas. But the city’s abatement policy has been criticized for enabling developers to not pay their fair share than in developing the city.

“The first thing that has to be done is put this city through a treatment program to help cure their addiction to abatements,” said Albornoz half-jokingly. “It’s almost a fixation. There should be a total moratorium, no more abatement.”

Another resident, who wanted to remain unnamed, has lived two blocks away from the Grove Street PATH Station since the early 1980s. She said the tax increase has only contributed to her stance of no longer being involved in community activism, because it is too tiring.

“It’s ridiculous the way this city is being run, and this pending tax increase just adds to the frustration of living here,” she said.

One city employee, a homeowner and a property owner in the Bergen-Lafayette section of the city and also wished to remain unnamed, said he is concerned about his tenants.

“Most of the people who live in my building are either senior citizens or single parents with children,” he said. “I have kept rents low, but I may have to raise them.”

His suggestion to avoid a tax increase in future years is to tax the churches in the city, which are tax-exempt, and also to stop granting abatements. Sidebar Tax relief

Maureen Cosgrove, the city’s tax collector, said last week that taxpayers who are 65 years or older, disabled, or surviving spouses have been sent a letter stating that the state instructed the city to deduct $250 from their 2006 tax bill. But to qualify, an enclosed form must be completed and returned to the city’s tax collector office by March 1 to verify that one meets the state’s criteria for tax deduction.

For more information, call the city tax collector office at (201) 547-5197.

Also, Cosgrove recommends other state tax relief programs like NJ Saver Rebate (609-826-4282), Homestead Rebate (800-323-4400) and Property Tax Reimbursement (800-882-6597) – RK
Ricardo Kaulessar can be reached at rkaulessar@hudsonreporter.com


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