Wednesday, November 28, 2007

Aberdeen Plays "See No Evil" in the Upcoming Revaluations

Last night’s town meeting in Aberdeen saw some familiar faces from this past election. Mayor Sobel and Council Members Drapkin, Vinci, and Gumbs were all there. It was easy to recognize them in the crowd. They were the ones smiling.

They have lots to be happy about. It was through their neglect that the town did not have a property revaluation for over 15 years. As Neil Rubenstein of the Realty Appraisal Company explained, 15 years is a very long time to not have a property revaluation. Over that period, property assessments become increasingly disconnected from their market values. Eventually, Monmouth County had to force Aberdeen (and Matawan) to have a revaluation to ensure that everyone was paying their “fair share”.

However, as a result of waiting so long for the property revaluations, there are going to be some major readjustments. Over the next two years, scores of homeowners will see their property taxes rise over 30% while hundreds more will see over 20% increases.

Stuart Brown, the town manager, kept stressing at the meeting that the revaluations are revenue neutral. So what? If a family sees their taxes suddenly go up $1500, do you think they’ll care that their neighbors got a tax cut? Brown also made the point that the town portion only accounts for a sixth of the property taxes. Again, so what? Some homeowners will be facing a massive tax hike and they will rightfully blame the revaluations.

At the meeting, there were several complaints that homeowners were being punished for maintaining their homes. New Jersey property taxes are “ad valorem”, according to the value. A well maintained home is worth more than a poorly maintained home and is therefore charged a higher tax rate. The town insists there’s nothing they can do about that.

Let’s be clear – Mayor Sobel and the Town Council are personally responsible for any tax upheavals and there’s plenty they can do about it.

First, they should guarantee all homeowners that annual tax hikes will be capped at 10%. While still high, it’s far better than having a 20% or 30% tax hike. Those whose taxes would normally rise higher than 10% could receive financial assistance from the town in the form of a tax credit so that the net result would be a 10% increase.

Given the fact that Aberdeen has a normal distribution of property values, the vast majority of homeowners would not require assistance from the revaluation. Of those that do, nearly all of them would be phased out over the first three years. Ultimately, they will be forced to pay their “fair share” but at least there would be a transition period allowing them to adjust.

The program would cost under $3 million over a five year period. The money would come from the road maintenance program, where we spend $2.5-$3 million a year. Yes, the roads need to be improved but they won’t crumble because the program was under funded for a couple of years. I’d rather drive on a bumpy road then watch more people forced from their homes.

Next, the town should make certain this never happens again. As I’ve outlined in an earlier posting, the town could require each homeowner to assess his own property at least once every ten years. The homeowner could schedule his assessments prior to any major improvements. This would allow the homeowner to improve his home without any immediate tax penalties and to plan ahead for future assessments. It would also give fair notice to any future homebuyer.

Lastly, by postponing all new projects for one year, the town and the school could both have a one-year budget freeze. Not only would this create long term fiscal benefits, it would greatly help the public through the upcoming revaluations.

Unfortunately, the town plans to do absolutely nothing for those poor folk who are about to have their property taxes skyrocket. The town council created this situation through their neglect. The council has the power to help. To act otherwise is heartless and cruel.
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Anonymous said...

Comments show that the blog writer is very misinformed. Does he really think that the road program being cut would free up $3 million? The actual cost of that program is more like $300,000 per year in debt payments. He states % increases that are unlikely to occur and seems to have more of an interest in encouraging panic than legitimate concern. Why should I subsidize my neighbor because they've been underpaying their taxes. Fair is fair -- I'm looking forward to the revaluation so that I can pay my fair share.

Aberdeener said...

If you have a copy of Aberdeen’s municipal budget, please go to Sheet 40b_i. The annual budget for Road Improvement is $3,000,000. The total budget for Road Improvement over the next 5 years is $15,000,000. Of course, that doesn’t mean the town spends all of it but they do spend most of it.

You can also look at the town’s press release ( - Township Council Awards Contract For Reconstruction Of Three Streets). Lastly, I have confirmed the Road Improvement numbers with the Town Manager.

Also, the town only assumes debt for capital projects, not for maintenance.

I hope my projections are wrong. They're based on a review of recent sales and property assessments (certainly a very crude approach). But the more wrong I am, the less expensive a relief program would cost.

I can certainly appreciate that you want everyone to pay their fair share. I believe everyone shares your opinion. But we are talking about our neighbors. For those who would be hardest hit by the revaluation, I think we should be charitable and allow them to transition to the higher property taxes over a few years.

Anonymous said...

Road improvements are a capital expense. You really have no idea what you're talking about. Stop trying to scare people and get the facts straight.

Truth In Matawan said...

Does Mayor Sobel--I'm sorry, "anonymous"--want to explain his complete disregarding of the discrepancy in his road program numbers? Or is he too busy trying to run interference for the damage the long-delayed property revaluations are going to cause?

Aberdeener said...

The town plans on spending at least $2.5 - $3 million per year on road maintenance for the foreseeable future. It’s budgeted as an ongoing routine annual expense. The town does not borrow money to fund ongoing routine annual expenses.

You can check the press release, call Stuart Brown, or go to the municipal building and get yourself a copy of the budget.

Anonymous said...

The road program is in the capital program and is not in the operating budget. You are just wrong - you either don't understand the facts or you intentionately choose to misrepresent the facts. You are just plain wrong and proof that there is more fiction than reality on the web. You are just a very negative person that may actually believe the misinformaton you try to spread. I hope that people reading this try to find the facts for themselves.

Anonymous said...

I noticed that the cost of this revaluation is a hefty $450,000 of taxpayer money. I am wondering if this was done by competitive bids or sole source method. We got to keep an eye on this township.

Aberdeener said...

The cost is $425,000 and was awarded through competitive bidding. However, there are only about five companies in the state that do municipal assessments so the competition was rather limited.

Anonymous said...

I understand that in the next few months the company hired to do the Revaluations will be coming around to look at the inside of our houses. Instead of making appointments with homeowners to make sure that working people can arrange to be home, it appears that these visit will be unannounced. They say they will make 3 attempts to get into your house and if you do not let them in or in most cases people are at work they will assess your house at the maximum amount. Another questionable Aberdeen tactic. I wonder if this is legal?

Truth In Matawan said...

A similar tack was employed in Matawan. They showed up unannounced as we were leaving for a party, and the gentleman made it seem as if WE were inconveniencing HIM if we didn't let him do it right then and there.

Aberdeener said...

Aside from selecting a vendor, Aberdeen has virtually no say in how assessments are conducted. The state constitution mandates that all property assessments related to property taxes be performed in a consistent fashion.

The reason for unannounced visits is cost; the realty appraisal company can maximize the number of houses seen in a day if they're not bound by prior arrangements.

During a revaluation, all homes are considered to be fully renovated unless the inspectors see otherwise. This practice conforms with state law and was established to give property owners an incentive to allow inspectors inside their properties.

Inspections only last a few minutes. If your house was not inspected, you can contact the realty appraisal company to schedule an inspection. Otherwise, you will need to challenge your assessment at a hearing.

Anonymous said...

Aberdeen must request a delay or else as prices continue to drop the courts will be flooded with appeals. This is the story in Middletown and many other towns. APP article: Fearing that the shaky housing market could have affected the fairness and accuracy of its revaluation, Middletown is considering asking the county to delay the date the new property values would be fixed.
Township officials this week will await a report from Harry Haushalter, an attorney they hired at a rate of $200 per hour who specializes in taxation law. He is expected to tell them whether he thinks they have a legal basis to go before the county Board of Taxation and dispute the current assessment date of Oct. 1, which is when the new property values are to be set.

"Our concern is that if the values are so off, the number of (tax) appeals will be very high," Middletown Deputy Mayor Pamela Brightbill said.

Citing an "ever-increasing number of "for sale' signs," news that properties are not selling and a rising number of foreclosures, Brightbill said there has been growing concern that the updated property values will be inflated if the market continues downward.

Middletown's qualms echo a nationwide trend.

According to Bloomberg News, the number of Americans who fell behind on their mortgage payments rose to a 20-year high in the third quarter as borrowers were unable to refinance or sell their homes.

The surge in foreclosures is expanding the inventory of unsold homes and contributing to the decline in home prices. The National Association of Realtors is forecasting new home sales will drop 13 percent in 2008.
More towns await revals

A number of other Monmouth and Ocean county municipalities are about to finish, or are awaiting, revaluations. Ordered by county tax boards, the studies are intended to create up-to-date property values and to ensure the local tax burden is distributed equitably. As part of the revaluation process, the assessor compares recent sales of homes similar to the property that is being assessed to determine the fair market value of that property.

In Toms River, which is finishing a revaluation, Tax Assessor Glenn Seelhorst said he will be applying to the county tax board for a one- or two-month extension due to "the size of the town and the change of market, whether it be up or down."

Although there are certain segments of the market, such as large Colonial houses, that are in trouble, other portions, such as the entry-level housing market, are faring better, he said.

Nearly a year ago, following an outcry from residents, many of whom had property that doubled or more following a reassessment, Long Branch officials looked into throwing out the study. But City Business Administrator Howard H. Woolley Jr. and City Attorney James G. Aaron were unable to determine a legal basis for doing so.
Appraisal company hired

In Middletown, West New York-based Realty Appraisal Co. was hired to complete the current revaluation. The township has not had a revaluation in about 16 years.

Letters assigning new property values have not yet gone out, Brightbill said.

The township has set a $10,000 cap on the amount Haushalter, the attorney, can be paid. The money will be worth it, Brightbill expects.

"If the market is continuing to fall, and we have to do a reassessment in the next couple of years, the cost of that will be high," she said.

Resident Jo Ann Lynch questioned why the property value letters haven't gone out already, as the township had originally planned.