Borough tax revaluation mandated

Hightstown ordered to revaluate properties for 2008 tax year

By: Kerri Williams
   The Mercer County Board of Taxation voted unanimously Monday to order Hightstown to complete a revaluation of properties for the 2008 tax year.
   The town should be receiving an official copy of the order in about two weeks, according to Martin Guhl, county tax administrator.
   For the revaluation, the town must hire an outside company certified by the state to inspect each property in town and determine its fair market value. Several borough officials estimate the process could cost $200,000, which the town can finance over a five-year period.
   Because properties will go up in value overall, the tax rate would likely be adjusted downward, according to tax officials.
   "The misconception is that if the assessment goes up, taxes will go up," Mr. Guhl said. "Instead, it means a redistributing of the taxes among the taxpayers."
   "It makes it more equitable," added Borough Administrator Candace Gallagher. "Now some people are paying less and some more than their fair share."
   In fact, those discrepancies in property values are one factor the county looks at when considering whether to mandate a revaluation, Mr. Guhl said.
   "The uniformity is not good (in Hightstown)," he said. "(The values) are all over the place."
   The county also considers when the last revaluation took place, which for Hightstown was in 1992, with a smaller in-house reassessment in 1996. The average assessment in the borough has fallen to less than 50 percent of market value, he said.
   "They are supposed to be at full value," he said.
   For homeowners, the news could be good, bad or indifferent, depending on what part of town they live in and the age and condition of their homes.
   "There are pockets of town that have had more appreciation than others. Those will have a greater impact (tax increase)," said Borough Tax Assessor Ken Pacera, who declined to identify the areas.
   Mr. Pacera confirmed that the rule of thumb often quoted during a reassessment is that taxes will increase for one-third of property owners, go down for another one-third, and stay the same for the remaining one-third.
   He said there has been a lot of appreciation in the past five years, so homes built in that period should fare better as far as tax bills after the revaluation are concerned. Taxes on condominiums, on the other hand, have not fared well in recent years in neighboring communities that have gone through tax changes because that market is not as depressed as it once was, he said.
   The first step for the borough in complying with the order will be to submit a full set of tax maps to the state and have those approved, a process which could take up to six months, according to Mr. Pacera. Next the town would send out bid requests to revaluation companies.
   After the company is hired, it will probably take about four or five months to complete the inspections, followed by an appeal period, Mr. Pacera said. He estimates that the company would begin those inspections by the spring of 2007.
   After homes are inspected, residents should expect to receive a copy of their new assessment, which will give them an idea of their tax bill, he said. Residents can then can ask for an informal review with the assessor and later are able to make formal appeals to the county by April 1 of each year, he said.
   The cost to towns for conducting revaluations is getting higher every year, according to Mr. Guhl, because few companies are approved to perform them. Since the biggest cost factor is manpower, the companies consider the size of the town and if the properties are close together or farther apart, as well as the mix of residential and commercial properties.
   Ms. Gallagher said the town looked into the cost of a revaluation two or three years ago and was told it would be about $120,000. She said town officials are now estimating the process will cost closer to $200,000.
   Most municipalities wait for the county to issue the order for revaluation, according to Guhl, because it allows them to finance the cost over a five-year period.
   "It’s a big cost," acknowledged Ms. Gallagher.