VENTNOR – The “perfect storm” of a revaluation coupled with a $1.04 million increase in the city’s budget has resulted in a 27-percent municipal tax rate increase. Add to that school and county taxes and the increase drops to 21 percent.
Based on current values, the 2017 municipal tax rate is $1.133 per $100 of assessed valuation, up from $0.891 last year. The overall tax rate is $2.648 up from $2.186 last year.
The $30.3 million 2017 budget up from $29.2 in 2016 increased the tax rate 4.6 cents based on last year’s total assessed valuation.
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“We had in increase in the budget we didn’t want,” Mayor Beth Holtzman said.
Several residents took to Facebook to complain about their tax bills, but only a few showed up at the Aug. 10 Board of Commissioners meeting to voice their concerns.
“Somehow I expected a bigger audience,” said resident Linda Kaplan who regularly attends meetings. “Everyone is talking about the tax increase.”
Anticipating questions from residents, Holtzman asked the tax assessor and tax collector to attend the meeting.
Resident Sharon Alloy, who bought her house in March, said her property lost value and she had a tax increase. She said the double-digit increase in taxes would make Ventnor less attractive to prospective homebuyers.
“When we first thought about moving to Ventnor, people said, ‘Why would you want to move there, the taxes are so high.’”
Resident Jack Venezia asked how the city planned to control taxes in the future.
“I live up in Essex County and we don’t get hit with something like that,” he said.
“We got hit with the perfect storm,” Commissioner Lance Landgraf said, referring to the revaluation and budget increase.
Administrator Maria Mento said recent contract negotiations would result in savings over the next 10-20 years. New contracts for city employees that eliminated terminal leave and longevity and added more steps to the salary guide would result in “huge savings going forward,”she said.
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Seven firefighters at the top of the salary scale retired and were replaced with entry level employees, she said. The city is negotiating similar savings with the Police Department.
Standard & Poor’s recently affirmed the city’s current AA- rating, Chief Financial Officer Toro Aboderin said.
“They had good things to say and the outlook is stable,” she said.
Aboderin said commissioners taking a pro-active stance on increasing revenues helped to retain the rating. S&P suggested implementing written policies to prevent the city from “raiding the fund balance” just to lower taxes, Aboderin said.
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Holtzman said the increase in this year’s municipal budget was a result of the prior administration using up surplus funds to reduce the tax increase in 2016.
Landgraf promised to not to use surplus to balance budgets.
“The city was run poorly for a long time. That’s why I ran. I was tired of it. I was so agitated that I couldn’t take it anymore,” he said.
However, the recent revaluation of the city also had a negative effect on the tax rate, Tax Assessor Bill Crowther said.
The last revaluation was done in 2006 at the height of the real estate bubble. Using higher valuation falsely kept the tax rate lower, Holtzman said.
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A 14.6 percent drop in the total assessed valuation of the city contributed to the increase in the tax rate. Ratables dropped $344,657,950, from $2,362,000,750 last year.
The average assessment dropped from $357,283 last year to $298,335.
“Some neighborhoods held their value better than other neighborhoods,” Crowther said.
According to information supplied by the Finance Office, 36 percent of residents received a tax decrease, while 64 percent of residents saw their taxes go up. A breakdown shows that 18 percent had their tax bill increase less than $300; 10 percent $300-500; 22 percent $500-1,000; and 14 percent more than $1,000.
Crowther said now that the revaluation is completed, the city would likely not be hit with costly tax appeals.
There were 999 tax appeals in 2016, and about 191 this year. However, most of them were successfully defended, Crowther said.
“There will be no more loss this year like there has been in past years,” he said.
Residents who never filed tax appeals had a greater decrease in value, and would subsequently have a larger tax decrease, he said.
“Everyone is on market value now,” he said.
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Aboderin said despite a 2015 bond ordinance appropriating $600,000 for the revaluation, the actual cost of the revaluation was $460,177.