PATERSON, NJ - On the hook for almost $3.3 million worth of tax refunds on Paterson's commercial and industrial properties, city officials are planning to borrow the money to cover that expense.
Officials have decided that paying all the money up front would place too much burden on this year's budget, which already has a deficit of more than $5 million that the city has been unable to close for the past three months. The debt on the appeals pwould be repaid over five years, with an interest cost about almost $250,000.
The $3.3 million would be used to pay off refunds on more than 50 different properties for which owners won reduced assessments in state tax court, according to city documents. The largest refund of $464,068 is owed to Great Falls Industrial Park, the result of a court decision that changes the property's assessment back through 2007.
In addition to the cost of the successful commercial tax appeals decided in state court, Paterson also is struggling with the expense of refunding homeowners who had their assessments reduced through appeals filed with the county tax board. More than 4,000 Paterson homeowners won apppeals last year, representing $6.7 million in lost revenue for the city. That expense is being shifted to other city taxpayers, who will have to pay an average of $284 extra in their upcoming tax bills to cover the losses.
The plan to borrow money to cover the commercial appeals is scheduled for preliminary votes by the city council at its Feb. 14 meeting. A public hearing and final votes would be scheduled after that.