From the Daily Record:
Property tax assessment appeals are producing windfalls for property owners in New Jersey, returning about $80 million this year to those who won their cases in front of county tax boards and tax courts.
But those appeals are busting municipal budgets.
More than 74,000 property tax appeals were filed in New Jersey this year, the most since 1992, a result of the continued decline in property values since a real estate market peak in early 2007.
Generally, towns are required to make property owners whole by issuing credits on fourth quarter tax bills.
Municipal officials can set aside money to cover the credits, but they must guess at how much the credits will amount to because results of disputes aren’t known before the budgeting process begins.
Atlantic City owes more than $9 million to those who successfully contested tax assessments. Monroe in Middlesex County is on the hook for $5 million.
The squeeze for many towns has prompted support in the state Legislature for revamping the state’s property assessment administration.
A survey of town officials by the New Jersey State League of Municipalities showed that tax boards have granted average property value reductions of close to $5,000 per appeal, said William Dressel, the league’s executive director.
Dressel said his organization is reviewing the proposal. Meanwhile, Dressel said he plans to “encourage the Legislature to recognize the budgetary impact of the large and growing number of successful property tax appeals. There must be methods and programs designed to smooth the problem during this transitional period, as municipalities all around the state see their tax base shrink.”