MAPLEWOOD / SOUTH ORANGE, NJ — The values of many properties in South Orange and Maplewood have increased following the recent reassessment, which was ordered by the Essex County Board of Taxation after it determined the communities’ assessed values fell below market values.
Ernest Del Guercio and Jason Cohen of Appraisal Systems Inc., which handled the reassessment, announced during the Dec. 6 Maplewood Township Committee meeting that Maplewood’s property values are not yet finalized since letters have not gone out to all residents, though the property values are expected to increase by approximately 27 to 28 percent. South Orange Village President Sheena Collum likewise told the News-Record that South Orange’s values are not final pending additional reviews requested by some residents, but the reassessment process showed a roughly 27.3-percent increase.
ASI’s tax impact document for South Orange further reveals that the total assessed value of the 4,710 residential, commercial and vacant properties it inspected is $2.8 billion, an increase to the ratable base; 2016’s total assessed value was $2.2 billion. Applying that adjustment to the 2016 tax rate of $3.828 would result in a revised tax rate of $3.008, according to the document.
The document further showed that the average residential property value following the reassessment is $583,600, meaning the average resident would have paid $17,551.84 in taxes in 2016, had the revised $3.008 tax rate been used. That is a $30.17 difference than the $17,582 the average resident actually paid this year.
Of course, as ASI’s document stated, 2017’s tax rate will be based on the actual 2017 total tax levy and the final 2017 assessments. In other words, though the new property values go into effect Jan. 1, residents’ tax bills will not be affected until the third and fourth quarters of 2017.
The reassessment’s impact will be twofold, according to Collum. First, since the aggregate assessed value is increasing, the tax rate per $100 of assessed value will decrease. Second, she said each individual property’s share of the total tax burden will change depending on the change to its reassessed value compared to its value in 2016. If a resident’s new property value were increased by more than the overall 27.3-percent increase, his share of the overall tax burden would increase by more than the typical 2-percent budgetary increase. But if a property’s reassessed value were increased by less than 27.3 percent, the owner’s share of the overall tax burden would decrease; therefore a property owner’s taxes also may decrease assuming the decrease will offset the 2-percent budgetary increase.
Collum also stressed that the property reassessment will not raise new taxes. As always, the village president said the amount of taxes raised next year will be based on the amount raised in 2016, plus any budgetary increase subject to the cap limits. The only purpose of the reassessment is to ensure that those taxes are fairly and equitably apportioned across all properties based on accurate market values, she said.
“The reassessment corrects discrepancies that may have occurred due to some property owners previously successfully appealing taxes while others did not, property owners having made improvements to properties which were not included in their assessments or market conditions where certain neighborhoods saw greater increases in value than others,” Collum said in a Dec. 19 email. “The only ‘positive’ for the town is that we are confident all properties are now being assessed fairly and equitably.”
Meanwhile, Maplewood Mayor Vic DeLuca said township residents can expect to get letters containing their new values sometime this week if they have not already. The letters were supposed to go out sooner, but DeLuca said ASI did not finish the property inspections and analysis in the time expected. And as Cohen explained at the committee meeting, all reassessed values have to be reviewed by Maplewood tax assessor Edward Galante before they can be sent to residents. DeLuca said approximately half the letters were mailed between Dec. 6, and the time of his Dec. 18 email.
Until all the reassessed values are known, DeLuca said the tax impact of the reassessment cannot be determined.
Once Maplewood residents receive their letters, they can schedule a meeting with ASI representatives to discuss any questions or concerns they may have with the reassessed value. The window of availability for such meetings includes the week between Christmas and New Year’s Day, a time which Committeeman Ian Grodman pointed out was convenient for anyone who has off from work.
Letters for South Orange residents started to go out Oct. 31, and Collum said the village knows of a number of property owners who took advantage of the opportunity to meet with ASI. And while some properties are still under review, she said the village has not heard of anyone who was left unsatisfied with the process.
Property owners in both towns face a May 1 deadline if they plan a formal appeal.
As for the cost of the reassessment, Collum and DeLuca said the two towns jointly solicited competitive proposals from appraisal companies. Collum said all proposals were submitted with unit prices per property, with ASI’s proposal of $54.91 per property accepted in March. Maplewood is paying more than South Orange since it contains more properties, she said. The total cost for both amounts to more than $600,000.
ASI did not respond to requests for comment before press time Dec. 19.