Hoboken residents are invited to a community meeting next Wednesday, November 12, 2014 to provide information and conduct a question and answer session on the reassessment process. The meeting will take place from 6:00pm to 8:00pm at the Hoboken Elks Lodge, located at 1005 Washington Street.
Following last year’s revaluation, the City of Hoboken is following the best practice of conducting a “rolling reassessment” to keep property values updated on an annual basis to make sure that taxes are always distributed fairly and to prevent large disparities from occurring.
Some misunderstanding has arisen among members of the public about the effect of this on Hoboken's share of County taxes. It is important to note that the recently completed revaluation did not result in an increase in our County taxes, and the rolling reassessment that will be conducted going forward will not either.
“Unfortunately, the system used to allocate Hoboken's share of County taxes is completely unfair to Hoboken residents,” said Mayor Dawn Zimmer. “It punishes our residents for the success of our City. Every year, Hoboken's share of County taxes goes up because Hoboken is such a desirable place to live. Whether we use the estimated value calculated with the County’s "equalization formula” or the more accurate value calculated with an actual assessment, our share of County taxes will increase because our property values are rising faster than the rest of the County. Each year, we get less value for our tax dollars because our share of County services does not increase, but our share of County taxes does. And that is just not right.”
Questions & Answers on Tax Issues:
Q: Did the recent revaluation result in an increase in the total amount of Municipal or School Board taxes paid by Hoboken taxpayers?
A: No, it did not. The total amount of tax collected by the City and the School Board is set by the budgets of each of those entities and is based on the costs of running the City and public schools. It was unaffected by the updating of assessments.
It did however, adjust the way that tax burden is distributed among taxpayers to ensure everyone pays their fair share – no more and no less. Hoboken had not done an assessment of its property values in about 25 years. As a result, the small discrepancies which occur year by year grew into large discrepancies. For the most part, the revaluation corrected those discrepancies, bringing everyone’s taxes in line with the relative fair market value of their property. The total amount of taxes raised was unchanged by the revaluation.
Q: Did the recent revaluation result in an increase in the total amount of County taxes paid by Hoboken taxpayers?
A: No, it did not. In fact, it resulted in over a $400,000 savings to Hoboken taxpayers compared to if the revaluation had not been conducted. The update in assessments through the revaluation resulted in a small decrease from what our County taxes would have otherwise been using the County formula.
Q: Is the system used to allocate Hoboken’s share of County taxpayers unfair?
A: Hoboken's share of County taxes has been rapidly rising and will likely continue to rise because Hoboken is such a desirable place to live and our property values are increasing faster than other Hudson County towns. This was true when the "equalization formula" was used to estimate Hoboken's aggregate property value and it will be true using the more accurate value determined by our actual assessments. Unless our share of County services increases proportionately (which it historically has not), we get less value for our County tax dollars. Mayor Zimmer has made clear to our County representatives that this imbalance must be addressed to make the system fair.
Q: Why did the recently completed revaluation cause such dramatic changes in some people’s taxes?
A: If everyone’s property value increased every year by the same percentage as everyone else’s, then a revaluation would not change anybody’s taxes. However, different properties appreciate at different rates. These differences are relatively small year over year, but over time small differences grow into big differences. Because 25 years elapsed between revaluations, the discrepancies and the resulting unfairness grew to be very substantial.
Q: What is the City proposing to do to prevent this situation from recurring?
A: The City is following the best practice of keeping assessments current by conducting annual reassessments. These small annual adjustments will ensure that property taxes remain fairly distributed. In September, 2014, the City Council unanimously voted to award a contract to Appraisal Systems to conduct annual reassessments.
Q: Why is the City conducting a reassessment program the year after the revaluation?
A: The revaluation of 2014 set all assessments at their True Market Value as of October 1, 2013. Since that date, however, the market has been changing. Real estate in Hoboken is very diverse and the values of different property types have been moving at different speeds. The reassessment will set all assessments to their values as of October 1, 2014 and as a result, the fair distribution of taxes will be maintained.