Tax Appeals/Awards Down Since Revaluation

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Published: August 31, 2018 @ 6:00 PM EST

Tax assessment appeals – commonly known as tax appeals – are important for property owners, the local municipal government, and all Roselle Park property taxpayers. A townwide revaluation is an important – yet unpopular – mechanism to address tax appeals and property taxes in general.

During August’s municipal meeting, 22 properties were awarded their tax appeals for this year through Resolution 237-18 for a total of $25,704.35.

The way it works is if a property owner feels the assessment that the municipal government has of their building and/or lot is too high, the owner can request a legal review to have that lowered – either at the municipal level, through the county tax board, or the state tax court. The assessed value is a combination of land and improvements. This dollar amount is important because property taxes are based on that assessment then multiplied by a given year’s tax rate.

For the property owner, it means a lowering of their property taxes if they are successful in their appeal.

For the municipal government, tax appeals are a loss of revenue. Whatever amount is reduced in a successful tax appeal is considered a refund and the municipality has to apply it either to the owner’s tax bill or handed over to the appellant in the form of a check. The municipality not only loses the successful appeal’s taxes for the year(s) awarded but they remain off the tax rolls every year thereafter unless there is a new assessment of the property. Additionally – since property taxes are made up of the municipal, school, and county levies – in a tax appeal, the school district and county government still get paid from property taxes.

For the rest of Roselle Park taxpayers, whatever amount is successfully appealed has to be picked up by the remaining tax pool which increases everyone else’s property taxes – however little.

Since 2013, there have been 310 tax appeals that have resulted in $577,149.05 in property tax reductions with only ten (10) of them resulting in no change in the assessment and – thereby – no change in taxes. Out of the remaining 300, reductions for individual appeals have ranged from $159.16 to $19,291.33; the average being $1,917.44. Notable tax appeals include current Councilman-At-Large and former mayor Joseph DeIorio and his husband current Fifth Ward Councilman Thomas ‘Thos’ Shipley in 2011 (link) as well as former Fourth Ward Councilman Mohamed ‘Gino’ Elmarassy who voted to approve the townwide revaluation and filed his appeal while still in office in 2016 (link).

And this is why – according to proponents of it – a townwide revaluation is important. Not only does it update the assessment of homes to contemporary values and level out both over- and under-assessments but it also is supposed to lessen the number of assessments and the amount of reduction from the taxpaying pool.

In Roselle Park, a townwide revaluation was completed in 2016 (link) (link). This updated the average assessed value of a home in the borough from $65,000 to $253,000 and it lowered the tax rate from 13.587 to 3.811. This tax rate is multiplied as a percentage by the assessed value of a property to arrive at the property tax owed.


(Assessed Value) x (Tax Rate ÷ 100) = Property Tax


Reviewing three years prior to the revaluation – 2013 to 2015 – and the years since the 2016 change in the tax rate due to the revaluation shows the importance of such an unpopular action as far as tax appeals are concerned. Between 2013 and 2015 there were 204 appeals that resulted in $433,119.13 in reductions. Particularly, 2013 had 123 appeals filed. From 2016 through August of 2018, there have been 106 appeals that lowered the property taxes paid by $144,029.92.

Year
# Of Tax Appeals
Tax Rate
Amount Reduced
2013
123
12.406
$224,424.54
2014
50
12.907
$115,311.14
2015
31
13.587
$93,383.45
2016
29
3.811
$47,454.57
2017
55
3.934
$70,871.01
2018
22
3.979
$25,704.34
Total
$577,149.05

The reason for the large number of appeals in 2017 was almost undoubtedly due to the 82 property owners who did not allow the revaluation firm to enter their properties during the visual inspections that were needed to calculate the new assessments. This resulted in those properties being assessed at the highest possible legal value. Once those owners received a high property tax bill, appeals were filed.

Tax appeals will continue as the time goes on and at some point down the line – once again – the municipality will have to decide when it will be more cost-effective to conduct either another townwide evaluation or a townwide assessment which is not as expensive or in-depth as the revaluation which had a price tag of $239,000.

The raw data spreadsheet used in preparation for this article is available here.