NUTLEY, NJ - Municipal Tax Assessor Edmund Brown was at a recent Board of Commissioners public meeting to share how his office executes a compliance plan for the township in prior years from the 2011-2017.
According to Revenue and Finance Commissioner Thomas J. Evans a lot of residents were confused about recent adjustments. Evans said, “Over the last several months there [have] been a lot of questions raised regarding the assessed value of property in town; especially since the revaluation of the town that occurred in 2006 and the changes that occurred in the intervening time. … The question that has been raised on land value adjustments....”
Brown gave a short PowerPoint presentation to highlight aspects of the history for the town, as well as a spreadsheet showing how some areas of town may be over-assessed or under-assed; how adjustments to the land value may be warranted; and how assessments change. Through the presentation he detailed what his function is for the township and explained the rules tax assessors must abide by, governed by the state. He thoroughly explained his duties, governance and independence.
Brown quoted directly from the NJ handbook of Assessors. “Assessors, though selected and appointed by municipal officials, are public officers whose duties are imposed by and defined by the state law. When assessing property for taxation the assessor performs a governmental function as an agent of the State Legislature. The position of the assessor takes on a judicial quality in determining taxability and assessments of property. In discharging these duties; an assessor is not subject to the control of the municipal government.
"The intent is assessors, like judges, should be free to perform their duties without fear and must be immune from pressure and harassment. The assessor is subject to certain local requirements and to supervision at both the county and state levels of government. The direct supervisors of the assessor are the County Board of Taxation and the County tax administrator, not the local governing body.”
Brown said, “I’m an employee of the township. I was appointed by the Board of Commissioners however the Board of Commissioners [is] not my supervisor. …My direct supervisor is the Essex County Board of Taxation and the tax administrator.”
According to Brown, he can’t be pressured or harassed by any individual or any one on the governing body to raise or lower an assessment or to grant or deny a deduction. “It basically keeps the office pure…,” he said.
Brown said the assessor is to provide an equitable assessment throughout the township. “Real property must be assessed at the same standard of value to ensure that every property owner is paying his or her fair share of the property tax,” he said.
Brown explained that two properties in the same town having the same market value should be paying the same property tax. Assessments are based on, and reflective of, the market value. Changes in the assessed value are reactive to market value conditions with a purpose of ensuring equitable tax distribution to the tax base.
Brown explained revaluation. “Revaluations are done to correct inequities in the township; to create uniformity,” he said.
“Revaluations are done to correct inequities in the township; to create uniformity,” he said. “Over time marketing values change. […] Marketing conditions […] have different effects on different types of properties. Either different areas of town may become more desirable or less desirable. Different types of homes may be more desirable.”
Brown used split level houses as an example. According to Brown these types of houses haven’t been built since the ’70s and are not in demand and so the market reacts to that.
“The common misconception is revaluations are done to increase tax revenue for the township. That’s inaccurate. The reason for the revaluation is to achieve a more fair and equal distribution of the total tax levies,” said Brown.
Revaluations are typically ordered by the state and are contracted and performed by a private firm under the supervision of the tax assessor. The Essex County Board of Taxation and the Chief of the State have ordered the next revaluation for Nutley for 2021. The State Division of Taxation and the County Tax Board act in a regulatory manner approving the revaluation contract.
During the revaluation every property in the township is inspected and revalued no matter what it is - residential, commercial, exempt, or vacant land. “The process is very expensive and timely. …It’s a very large contract that had to be assumed by the tax payers of the municipality,” he said.
Reassessment is similar to revaluation. Nutley’s last reassessment was in 2010. “You are changing the value of every property in the township but a reassessment program only requires approval from the county, the state doesn’t get involved. It’s performed in-house by qualified assessors and staff as determined by the County of Taxation. When performed in-house the cost to the tax payer is little to none,” said Brown.
Compliance plans are another way assessments are adjusted and are also conducted in-house. However only land values can be adjusted not building values. The assessor must give notification in writing to the municipal governing body, the County Board of Taxation and the County Tax Administrator the reasons why reassessing certain properties in the taxing district is warranted and provide supporting documentation and statistical evidence.
“Throughout the town there are different neighborhoods and each of them [is] assigned a unique land formula for that neighborhood …certain areas may be more desirable than others,” said Brown. An example given was comparing the land value of a street near a town park and one on Essex Avenue.
Nutley has 64 different assessing neighborhoods in town based on the geography and zoning. The land formula is the same for each property in that neighborhood.
According to Brown one of the rules in a compliance plan is that in one year you cannot change more than 50 percent of the land values in the township. If more than 50 percent is needed to be adjusted then a reassessment or revaluation would have to be conducted.
Individually, everybody has the right to appeal their assessment and can file with the County Tax Board or the state tax court by April 1 each year or by May 1 on a revaluation year. Properties assessed for under a $1 million have to appeal the County Tax Board first before it can go to the state tax court. The person appealing has to prove the assessment is wrong. New Jersey law states that it is assumed that the tax assessor is correct. For residential properties, the appellant has to find comparable sales of similar properties. If a property is over assessed the change will be made the following tax year. An appeal form is on the township’s website nutleynj.org.
Brown said any construction, any type of renovation, will change the assessment of the home which would increase the property value and an added assessment would be justified. Examples given were kitchen and bath renovations, adding a fire place or a garage, a patio or porch. These are filed once a year with the County Board of Taxation typically on Oct. 1, but are retroactive to the date the construction was completed.
He explained adjustments are made on an area-wide basis and not spot assessed, and gave an example of a property that may be assessed for $300,000 and could sell for $400,000. “I can’t just go change that number, it’s called spot assessing; it’s discriminatory time and time again. Courts have over ruled any type of spot assessments.
“And I think that’s kind of what I’m being brought here to address is that there’s been accusations that my predecessor or my office before I worked here had changed or lowered certain individuals values. It can’t be done. Specifically, the values, were the Board of Commissioners values, if their land values were reduced,” said Brown
Brown said what happened were compliance plans conducted where different areas of town were adjusted and the land values were reduced due to market softness; those areas were over-assessed.
“So yes all the commissioners, their land values were assessed but they’re assessed at the same equitable rate that neighborhood would entail. So if one commissioner was reduced everybody in that neighborhood was reduced,” he said.
Over 99 percent of Nutley properties were reduced at least once and some numerous times because of changes in the market. The 2006 town-wide reevaluation conducted by a contracted revaluation firm was the first one since 1977.
The formula called equalization ratio is maintained by the State Division of Taxation. All the sales in the town are pulled and compared to the assessments and a ratio where the assessments are in relation to true market value is reached.
In 2010 an in-house reassessment was conducted. The values reacted to market conditions. “[…] there was a housing bubble, […]a housing crisis and subsequently value started to get softer from the heights of 2006 – 2007. Because the assessment piece was reduced from 2010 with the reassessment the tax rate therefore went up […] from 2.383 to 2.77,” he said.
According to Brown Hoffman –La Roche had a major impact on the assessment base. In 2013 before the closure was announced, their properties were assessed at $313 million. In 2015 it was assessed at $125 million. “That’s in assessed dollars, in taxed dollars that left about $6 million in flux. From 2006 to 2015 …the total assessed values for all the tax paying properties in town went from $4.15 [billion] to $3.23 billion which is attributed to the housing bubble and Hoffman-La Roche,” said Brown.
According to Brown the township had a very strong housing market recently and that’s led to the equalization ratio. The market value is increasing and the assessment value is staying relatively the same that’s leading to the equalization ratio being lower.
Brown’s office is at the Town Hall, 1 Kennedy Drive. His office hours are 8:30 a.m. to 4:30 p.m. Monday, Tuesday and Thursday. He can be reached at 973-284-4956 or by email email@example.com.
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