“Property-tax bills reflect lower values” plus 3 more

Property-tax bills reflect lower values
Property tax hikes in New Jersey will hit 23.5 percent factoring in loss of rebate
Property tax measure survives twists and turns
Property-tax bills finally reflect fall in Phoenix-area home values

Posted: 03 Sep 2010 08:48 AM PDT

by Catherine Reagor - Sept. 3, 2010 12:00 AM
The Arizona Republic

Property-tax bills are in the mail, and many Phoenix-area homeowners will be happy to see they owe less this year.

The 2010 assessments will finally begin to reflect the region's plummet in home values, although tax bills are not declining nearly as far as the recent plunge in home prices.

The average property-tax assessment is down 3.7 percent from last year. But some homeowners will see their bills stay the same or even increase, as several municipalities and special districts had to raise their tax rates this year to offset budget shortfalls.

Property values are assessed annually, and state tax bills based on those assessments arrive 18 months later. So, the current bills are based on valuation notices homeowners got in 2008. That year saw average values drop by 23 percent on average.

"We often hear from citizens wanting to know why their tax bills have gone up, even though the assessed value of their property has gone down. And the answer is increased government spending," said Charles Hoskins, Maricopa County treasurer.

How it works

Arizona homeowners are taxed through a formula based on two factors: property valuations set by the assessor and tax rates set by dozens of municipalities and other tax jurisdictions.

Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.

A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.

Other factors can also push a tax bill higher, such as local bond issues or voter-approved school-funding increases called budget overrides.

The bills being mailed show property owners which taxing jurisdictions are contributing to their total assessment.

Setting tax rates

Current tax rates were set earlier this summer. The rates are based on the assessed values of the homes, but as home values decline, rates may go up.

The taxing jurisdictions first figure out how much money they need to fund their budgets, Hoskins said. Then, they work backward to come up with a tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up. But all jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.

The foreclosure crisis also can push up taxes in some cases. As struggling homeowners stop paying their mortgages and property taxes, taxing jurisdictions may have smaller pools of taxpayers to fund their budgets.

Hoskins said some property owners could see big increases in their tax burden because of a special tax district for fire, library or water service. There are thousands of special tax districts in Maricopa County.

Last year, a property owner with 15 vacant-home lots in Buckeye saw his property-tax bill climb from $800 to $23,000 because the municipality increased its fire-district tax, Hoskins said.

There are various caps on rate increases that special districts can levy on property taxes. The Arizona Department of Revenue reviews all taxing districts' rates each year.

This year's property-tax assessments include the state equalization tax, which was reinstated in 2008 after a three-year hiatus. The tax, which helps fund education in Arizona, adds about $50 to a typical Valley homeowner's bill.

Next year's property taxes will be based on valuations sent in February of this year, which showed home values fell 15 percent during 2009.

Property taxes in 2011, based on 2009 valuations, could climb with a recent budget shift. Currently, a rebate subsidizes part of the property tax that homeowners owe for education. The change will limit the homeowner rebate and force school districts to raise their taxes on homeowners.

There has been backlash over Arizona property-tax increases during the past two years. A group known as Prop 13 Arizona wants to simplify the state's property-tax system by using homeowners' purchase prices as the basis for their taxes, doing away with the state's current annual assessed-value method. The plan would be modeled after a California tax policy created by 1978's Proposition 13 ballot initiative.

However, property-tax reform doesn't draw as much support in Arizona as other parts of the country because the state has one of the lowest tax rates in the nation. In 2009, Arizona had the 39th-lowest property-tax rate in the nation, according to the Tax Foundation, a Washington, D.C.-based non-profit.

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Property tax hikes in New Jersey will hit 23.5 percent factoring in loss of rebate

Posted: 03 Sep 2010 07:29 AM PDT

The average property tax hike in New Jersey will be 3.3 percent this year — and will hit 23.5 percent after the loss of the homestead rebate is factored in, a statewide review of new tax rates show.

The changes in the average property tax bills will range from a $6,313 increase in the tiny village of Loch Arbour to a $1,329 reduction in Penns Grove, Salem County, according to a review of tax rates in 415 out of 566 towns.

All totaled, the average homeowner tax bill went up in 379 towns, down in 35 and remained unchanged in just one municipality.

In Morris County, taxes paid on the typical home in East Hanover will rise 5.7 percent, or 25.8 percent if you count the loss of the homestead rebate. Those are the highest percentages among Morris County towns whose tax rates have been certified. You can see a Morris County town-by-town list by clincking on the link with this story

This year's NJ SAVER homestead rebate was eliminated under Gov. Chris Christie's budget plan. Homeowners who qualified for the rebate last year saw an average check of $1,037 to offset a statewide average tax bill of $7,291.

Of the 415 reporting towns, the average property tax bill will be $7,694 this year, according to the review, conducted by the Daily Record and other Gannett papers in New Jersey.

The remaining 151 towns are still making final their budgets or were awaiting county tax board certification. Burlington County's tax board administrator refused to release 2010 tax information on any of the county's 40 towns.

Christie has said he plans to revamp the rebate program in May so that it will cost the government less money to run. No amount for the 2011 rebate has been announced yet, but plans are to limit rebates to homeowners making up to $75,000 year, unless the owner is over 65 or disabled. Then the maximum income limit is $150,000.

Christie has said a host of tax and government reforms being debated by the Legislature will help keep tax increases to 2 percent in the coming years.

Yet the tax hikes, coupled with sticker shock from reassessments in several towns this year, have pushed residents such as Allan McCallum of Berkeley to the edge.

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Upset and angry, McCallum's voice almost cracked as he told Berkeley Council members Aug. 23 that soaring property taxes may force him to sell.

"You know how much this pisses me off?" McCallum asked the council and Mayor Jason Varano. "I'm not going to be able to stay in my home."

A revaluation in Berkeley has sent home values soaring in waterfront areas such as the South Seaside Park neighborhood where McCallum lives.

McCallum's estimated property taxes rose to more than $10,600, a 70 percent increase in just one year. He and his wife, Donna, wonder if they will be able to continue to live in town.

"I'm 'Joe Homeowner,' " said McCallum, an automotive mechanic for the state with an annual salary of $54,500. "I just know that money is coming out of my pocket that I just don't have. It's just too much money. If I can sell my house, I'm going to go, and I don't want to."

Faced with a looming $10 billion deficit in the spring, Christie, a Republican, cut hundreds of millions of dollars in aid to schools and municipalities to balance the state's budget.

The cuts forced many schools and towns to layoff workers and curtail services, but that hasn't offset rising costs in salaries, pensions, health care and other budget factors.

State Senate President Stephen M. Sweeney, D-Gloucester, said homeowners are picking up the tab.

"The governor's budget absolutely shifted everything to the local governments," Sweeney said. "People will be outraged when they realize their rebate isn't coming. ... The bottom line is this: Higher taxes are coming to New Jersey. The governor is just shifting the burden to mayors and freeholders."

A 2 percent cap on future property tax increases was passed in July, but the Legislature is also considering a 33-bill "tool kit" that would give more power to schools and towns to curtail public salary, pension increases and other costs.

"The property tax cap is the centerpiece of the governor's reform agenda," said Christie's spokesman Kevin Roberts.

But the governor's tax policy is not just about a property tax cap, he added. It also includes the pending tool kit.

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At the local level, three out of every four dollars is spent on personnel, he said. In addition, lawmakers want to provide incentives to municipalities to share services.

"We succeeded with the 2 percent cap," Roberts said. "Now we need comprehensive reform. We need to be finding partners at the local level."

Ben Dworkin, a political scientist at Rider University, said: "If this stuff were easy it would have been done already."

"Property taxes almost always go up," said Dworkin, director of the Rebovich Institute for New Jersey Politics. "The political question is, who is going to get blamed for it?"

The key to fixing government is by reforming binding arbitration for public employees, state Sen. Jennifer Beck, R-Monmouth, said.

During contract negotiations with both municipal and school employees, Beck said "it has to be asked, 'How does this affect the local taxpayer?' Or else towns won't be able to make that 2 percent cap."

And reform has to include police contracts, she said.

In general, Beck said, "it isn't the base salaries that are so out of line. It's just that the rate that they grow is so out of step with the economic climate." If reforms aren't made, the "result will be significant layoffs."

Longtime New Jersey political observer Joseph Marbach of LaSalle University in Philadelphia said the tool kit will make a difference in government spending, but only if it is not watered down by lawmakers.

Property taxes are "a tremendous problem," said Marbach, a political scientist and provost at LaSalle. "If you want real prop tax reform, and that is a different issue, a cap is not property tax reform. We really need the state government to assume a greater share of local costs, particularly the cost of education."

Residents of Loch Arbour, a seaside village next to Asbury Park that is just two blocks wide with 280 residents, have seen their property taxes rise faster than anywhere else in the state.

"Our taxes went up almost 9.5 percent in 2008 and almost 54.5 percent in 2009," said Betty McBain, president of the village's board of trustees. "In 2010, they went up again — just under 46.5 percent. So in two years, our taxes went up basically more than 100 percent." The average property tax today: $19,908 in a town where the median household income is $83,300.

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The cause: a new school formula that required the village to pay just under $80,000 per pupil to send 24 children to the nearby Ocean Township public schools, she said. "That's about twice as much as it costs to go to Princeton University for a year," McBain said.

The governor's budget, McBain said, is "totally shifting the burden to municipalities and the property owners. The property owners are paying dearly.

"Loch Arbour is not a wealthy community," McBain said. "We are working-class schlubs, most of us. I fear for people's lives. Most are senior citizens. You can't sell your house. You can't afford to stay. I am afraid someone is going to hurt themselves."

Seaside Park was one of the few Ocean County towns that actually saw a drop in property taxes, which declined 2.5 percent, if the state rebate is not included. The borough lost about $35,000 in state aid this year.

Administrator Bob Martucci said the borough closed its elementary school and now sends pupils to the Toms River Regional School district, which saved taxpayers $750,000. Seaside Park is also relying on more seasonal, part-time employees, instead of hiring full-time workers. The borough has entered into several shared services agreements with nearby municipalities, Martucci said. It shares beach-cleaning costs with Berkeley, for example.

"We look to share with our neighbors as much as we can and we continue to do that," Martucci said.

Most residents saw a $300 to $400 reduction in their tax bills this year, he said.

Martucci said he is hopeful Seaside Park can maintain a stable municipal tax rate next year. "This is always going to be a work in progress," he said.

In Lakehurst, a mostly blue-collar town, officials dread 2011.

The town's taxes jumped 8.4 percent, or $333, for an average bill this year of $4,281.

A police sergeant on disability retirement will not be replaced, and two full-time employees and one part-timer were laid off this year, Borough Administrator Norbert B. MacLean said.

"We're doing more with less," he said.

MacLean is not optimistic about next year's budget.

"I've been told next year's going to be worse," he said.

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Property tax measure survives twists and turns

Posted: 03 Sep 2010 07:38 AM PDT

10:00 PM PDT on Thursday, September 2, 2010

By JIM MILLER
Sacramento Bureau

SACRAMENTO - For months, legislation to restore a government program that postponed property-tax bills for thousands of low-income seniors and disabled residents was sailing along.

The program helped nearly 6,000 people, including about 1,000 in Riverside and San Bernardino counties, in the months before it became a casualty of February 2009 budget cuts. Participants received an average of $2,300 in property tax help.

But as time ticked down this week on lawmakers' two-year session, the measure nearly died. And last-minute changes to ensure its survival eliminated the chance that eligible people could enroll in the program in time to postpone December property taxes.

At the center of the turn of events was the Howard Jarvis Taxpayers Association, an influential anti-tax group that praised the bill for much of the spring and summer but changed its tune in the final days of session.

Assemblyman Bob Blumenfield, the bill's author, accused the group of giving in to financial industry opponents of the bill.

Title companies and others objected to the measure's making it clear that county treasuries would be first in line among any lien-holders for repayment of property-tax loans.

"Howard Jarvis was on board. They said this was the most important issue to their members," said Blumenfield, D-Van Nuys. "Then they decided to talk to the bankers, and (the bankers) were concerned about this lien thing.

"The way I look at it, they jettisoned their members in favor of some industry concerns," Blumenfield said.

David Wolfe, the association's legislative director, rejected the charge.

The association's main concern, he said, was that the bill would require participants in the tax-postponement program to pay an administrative fee to counties lending the money.

There was never a fee when the state ran the program before lawmakers suspended it in February 2009 as part of billions in budget cuts, Wolfe said.

"It doesn't seem appropriate," Wolfe said of the administrative fee. "If you truly believe the program was valuable, figure out how to fund it using existing resources."

Earlier versions of the bill, which the Howard Jarvis group supported, also included a fee, of $75. The version passed by the Legislature would let counties collect a fee to cover costs.

"We can't do things for free," said Jean Hurst, a lobbyist for the California State Association of Counties.

Long history

Created in the mid-1970s, the state property-tax suspension program has helped more than 200,000 seniors and disabled people.

The state paid the bills and was repaid when the property was sold, usually after the participant died. That money paid for new loans.

Lawmakers and Gov. Arnold Schwarzenegger pulled the plug in early 2009. Blumenfield, chairman of the Assembly Budget Committee, acknowledges that the cut was a mistake.

Past participants have not been able to postpone new taxes and new applicants have been denied. One of the unsuccessful applicants was Anna Amano, of Murrieta, a legal contract administrator until she became disabled after a workplace accident. Earlier this summer, she estimated that she and her husband owe about $10,000 in back property taxes.

Counties have attached liens to properties for unpaid taxes, and some lenders have begun foreclosure proceedings, according to Blumenfield's office.

But trying to revive the state program was a nonstarter. The state general fund has a $19 billion gap between spending and revenue through June 2011.

The bill approved late Tuesday instead would put counties in charge and let them offer property tax loans as a type of investment, at 7 percent interest. Participants would have to be 62 or older, disabled, and their household income could not exceed $35,000.

The measure passed the Assembly unanimously in June.

But the Jarvis group's opposition to the bill late last month was followed by a total loss of support among GOP lawmakers, who have close ties to the group and seek its backing at election time. That forced the bill's supporters to drop urgency language, meaning the bill would not take effect until Jan. 1 if signed by Schwarzenegger.

The governor has not taken a position on the bill, his office said Thursday.

So far, only Santa Cruz County has passed a resolution to participate in the program. Riverside County Treasurer-Tax Collector Don Kent said in an e-mail that his office has only started to review the legislation.

"The counties aren't bending over backwards to say they want the responsibility to do this," Wolfe said.

But Hurst said she expects more counties will consider participating in the program if it becomes law. Tax-postponement loans would offer counties a good rate of return while letting them help struggling residents, she said.

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Property-tax bills finally reflect fall in Phoenix-area home values

Posted: 03 Sep 2010 09:05 AM PDT