Pilot program expected to decrease tax appeals

O’Scanlon: Demonstration will save towns money, improve budget process

Staff Writer

 Assemblyman Declan O’Scanlon Assemblyman Declan O’Scanlon A pilot project undertaken by Monmouth County in cooperation with local municipalities is expected to eliminate spikes in property assessments and reduce the number of tax appeals.

State Assemblyman Declan O’Scanlon (R-13th District), a sponsor of the Real Property Assessment Demonstration Program (S-1213/A-1591), said the program, which will begin Oct. 1, will require local tax assessors to complete a reassessment on each property every five years, resulting in a leveling of assessment valuations.

“The periodic revaluations can have dramatic swings in value, which are shocking to people,” he said during an interview on Feb. 15. “Some people are paying too much, others are not paying their fair share, and this will even all that out.

“Evaluations will be examined much more frequently so the whole system will be much more fair,” he added. “With these much more frequent examinations, you will keep those assessments much closer to valuation.”

The program, signed into law Jan. 25, is set up as a demonstration program in Monmouth and Cape May counties over a fiveyear period. O’Scanlon said the immediate impact of the program, which requires municipalities to complete an assessment of 20 percent of properties yearly over the five-year term, will be fewer tax appeals.

“It is very likely there will be less appeals,” he said. “You get tax appeals when people perceive a significant discrepancy between the value of their house and their assessment.”

O’Scanlon said the program was the “brainchild” of Monmouth County Tax Administrator Matthew Clark.

Clark explained in a Feb. 14 interview that the program puts a larger onus on local personnel and will eliminate contracts with appraisal firms to perform the revaluations.

“The entire service model is changed, so a good deal of work that may have been done by outside companies is now going to be shifted [to] the local assessor,” he said.

“We believe the model of 20 percent a year [with] the assessor performing the evaluation component is going to be a significant reduction in cost to the taxpayer,” he added.

O’Scanlon agreed that the program would lower the cost of revaluations.

“It could eliminate the need for [towns] to go out for those expensive revaluations,” he said, explaining that by having the local assessors perform the reassessment, and working in conjunction with the county, municipalities could save several hundred thousand dollars. Clark agreed the program would eliminate the dramatic swings in assessments.

“It is expected it is going to be cheaper to have 20 percent of the properties being inspected internally on an annual, revolving basis, so that we completely do away with the confusion of our current system where we have radical changes in neighborhoods.

“It is a much more nimble market-reactive model than our current laws.”

Another benefit to municipalities is the law will move up the timeline for tax-appeal hearings.

Currently an appeal of a tax assessment must be filed by April 1 and then the appeal would be heard in May, June or July. Under the new program, the deadline to file an appeal is Jan. 15, with the appeal being heard in February, March or April.

The schedule change also will provide municipalities with up-to-date tax revenue figures when they adopt budgets in May or June.

“First and foremost, the appeal calendar is shifted entirely so the appeal process is moved before the town’s budgetary process,” Clark said. “Everything would be done before the town has to finalize their levy.”

O’Scanlon said the schedule change is a common-sense approach to the tax-appeal process.

“Right now you have tax appeals all [coming] in after towns complete their budget, and towns have to absorb all of the shortfalls when there are successful tax appeals,” he added. “That is about as common sense a reform as you can find.”

According to Clark, towns faced with a shortfall would have to resort to emergency bonding with interest; the new program would eliminate that practice.

O’Scanlon said the vast majority of towns in the county employ a part-time tax assessor, and the program will be part of a shared-service agreement with the county.

“The county is going to work with them; it is going to increase their workload, but not so dramatically,” he said. “I believe we may not have any that will have to pay anything additional.”

“Even if we have to pay [assessors] in some towns, it is a drop in the bucket [compared] to the cost of a complete town revaluation,” he added.

While the law is technically a pilot for the county, Clark is expecting it to be successful.

“It is not just hope, it is my full expectation,” he said. “I am all in on this, and I expect that even before it finishes, I will have enough actual data to support that certain components be made into law.

“There were component analyses throughout this process, and we’re looking at millions of dollars being saved annually statewide if this was in place,” he added. “We expect a significant savings within Monmouth.” O’Scanlon is also confident of the program’s success.

“In the end I think that this will revolutionize how we value properties and assess taxes throughout the state,” he said. “There are not a lot of uncertainties of whether this is going to work.

“It is different than a simple consolidation of services; it’s a much more comprehensive structural change.”