Normally, taxpayers each year try to decipher their tax bills, seeking to determine the increase from the year before. However, this year with the results of Guttenberg’s re-evaluation of all property taken into account, discerning whether your bill went up or down may be even more complicated.
The introduced $16.4 million municipal budget, which still may be changed before its final approval, includes a 6 percent increase in the amount to be raised from local taxes.
However, some residents will pay much more than last year, and others will pay much less, because their home’s value has either increased or decreased.
Homes were re-evaluated last year to determine what they were worth in the current real estate market.
Taxes are determined by multiplying the value of the property times the tax rate.
“The tax rate is in a state of flux.” — Gerald Drasheff
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Rather than having people protest their old assessments in court, it was time to get everyone assessed at the same time.
After completing the task of rating each piece of property individually, Appraisal Systems came up with an overall value of $801.4 million for Guttenberg’s tax ratables. When the last revaluation was done in 1995, the town was rated at $401 million.
After being told the new taxable value of their property, residents had the right to appeal with the company, which held individual meetings with them.
Drasheff said that this phase is now complete, but around 24 people have filed tax appeals with the Hudson County Board of Taxation, which Guttenberg residents have the right to do until May 1.
While the town once paid to defend these cases, Appraisal Systems will justify their results for the next two years in front of the board and in court.
No answer for everyone
Drasheff said although around two thirds of residents will see lower taxes as a result of their property values changing, it is difficult to talk about specifics since reductions and increases ranged from a mere $20 to more than $3,000.
“Newer properties that have just come online in the last two or three years are [probably] going to be readjusted now up a bit,” said Drasheff.
He said that some of these properties were successful with tax appeals and the town’s tax assessor may have given far-reaching “blanket” reductions to those areas in the hopes of avoiding court. However, by doing so, some properties weren’t paying their fair share.
A new assessment
The tax rate used last year can no longer be applied because those taxes were formulated from the old assessed value of properties, which hovered around 40 percent of the current market value. Drasheff said that tax appeals were successful when a property owner was paying taxes on a property assessed at more than 40 percent, but often homeowners were contributing less and these individuals remained quiet and did not initiate tax court cases.
Now everyone will be paying taxes based on 100 percent of their property’s current market value.
Changes in tax rate
Residents pay taxes to three entities: The town, the schools, and the county. All three entities pass their budgets and residents get a bill for the total taxes.
Drasheff said that the overall total tax levy for 2010, including the town, school, and county budgets, equaled $24.6 million. The tax rate for last year, considering Guttenberg’s new total tax value of $801.4 million, can be found by dividing it by the levy. The new overall tax rate for last year would have been $30.6 per $1,000 of assessed property, if compared using current values, he said.
He said that previously, the county considered Guttenberg at 1.6 percent of the total assessed property in the county, but under the new assessment, he believes they will now account for around .05 percent, reducing their county tax bill.
Assuming that when the tax levy is approved this summer it equals $26.7 million, the new overall tax rate for 2011 will be $33.4 per $1,000 of assessed value.
“It is deceiving,” said Drasheff. “If you just compare the reconstructed tax rate of 2010 to the next rate in 2011, it looks like it could be higher than a 9 percent increase, but obviously we are going to see a decrease in taxes [for some].”
Homes were being taxed based on widely differing assessed valuations prior to the revaluation, so even if a property owner’s assessed value increases, they could see a drop in taxes under the new rate.
“The tax rate is in a state of flux,” said Drasheff.
He explained that in the coming weeks it could change as tax appeals are decided. The town is waiting not only for the adoption of its own budget, but those for the school and county.
Tricia Tirella may be reached at TriciaT@hudsonreporter.com.