2016 Tax Rate: How Did $3.642 Turn Into $3.811?

2016 Tax Rate: How Did $3.642 Turn Into $3.811? thumbnail
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Published: July 18, 2016 @ 6:00 AM EDT

The general property tax rate is a multiplier used to compute each property owner’s tax bill. It is expressed as $1 per $100 of taxable assessed value. In Roselle Park, the new tax rate after the townwide revaluation is $3.811. Last year a tax rate of $3.642 was used to show the estimated impact on taxpayers and their property taxes.

Why the difference? Why are people paying more than they thought they would? Why is the dollar amount of those receiving reductions less?

The short answer is the budgets of the school district, municipality, and county all went up.

The long answer involves the school district’s inaccurate publicly touted estimate of a $144.30 increase in the average property tax.

$3.642 was the rate that would have applied if all of the budgets from 2015 had remained the same – with a $0 increase. Of course, that did not happen. The $3.642 was basically used to compare 2015 taxes if the new assessments had taken effect last year. It would have shown how much more (or less) people would have paid if the new assessment were in place.

There are those who will recall that in 2015, Realty Appraisal Company – the firm hired to conduct the townwide revaluation – sent out letters notifying property owners of their new assessed value. Previous to this revaluation, the average assessed value for a home in Roselle Park was $65,000. The new average was determined as $253,000 by Gail Scaglione, the borough’s tax assessor.

The new $3.811 reflects a $399.74 increase for a house assessed at $253,000. Most notable is the school tax portion and the difference between what the estimated tax impact for a house assessed at $253,000 was given by the Roselle Park School District Business Administrator Sue Guercio and what the actual calculated tax impact was as certified.

During a Board Of Education (BOE) budget presentation this year, Mrs. Guercio gave an estimated impact of $144.30 for a house assessed at $253,000. This amount was repeated by BOE members who were criticized last year for the school district having a $300 increase in the school’s share of property taxes.

If, in fact, the increase estimated was accurate, it would have resulted in a total average tax increase of $301 instead of close to $400.

 
Tax Rate
Average Increase
Tax Rate
Average Increase
County
0.535
$63.25
0.535
$63.25
Open Space
0.015
$0.00
0.015
$0.00
School
1.995
$144.30
2.034
$242.88
Municipality
1.193
$91.08
1.193
$91.08
Library
0.034
$2.53
0.034
$2.53
Total
3.772
$301.16
3.811
$399.74

By way of comparison, the borough’s Chief Financial Officer, Kenneth Blum, had estimated a $93.10 increase in the municipality’s shore of property taxes. His estimate was only $2 more than the actual certified increase.

Estimated Tax Impact
Actual Tax Impact
Difference
Municipality
$93.10
$91.08
$2.02 (over-estimated)
School
$144.30
$242.88
$98.58 (under-estimated)

In reaching out to Mrs. Guercio, she stated that in arriving at the estimate, the debt service was not included in the calculation. Debt service is an annual payment – like a mortgage – made on capital projects; in this case a referendum to expand the district by constructing and renovating facilities in 2005.

Mrs. Guercio first stated that she thought that the question of the tax impact was in relation to the general fund only, not the total tax levy. She also stated that the school district budget runs from July through June of the following year while other budgets run from January to December which might account for the disparity in what she stated and what actually ended up being the average increase.

The only issue with that is that the Tax Levy Certification, which was available on May 6th – four days before the BOE voted to approve the budget – shows (and corroborates) the $21,436,116 which was to be collected by taxpayers. Had this information been stated by Mrs. Guercio during the May 10th BOE meeting, residents would have been aware that the average increase would have been $242.88.

(Click below to enlarge image)

2016 BOE Tax Levy Certificate
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When asked whether not including the debt services – which resulted in the disparity in the increase – should have been part of the estimate, Mrs. Guercio stated, “It’s a good question and a good point. I definitely am going to note that and probably add to my PowerPoint for next year to have another slide which shows the total tax levy impact.”

In confirming that she had not included the debt services into tax impact calculations, Mrs. Guercio admitted that those payments should be part of the estimate given to the BOE and the public. She said, “I definitely agree that that’s a valid point and an important fact that should be stated clearly in the future. It’s something that I will gladly define in the future.”