New Jersey Real Estate Report

From the APP:

Tax boards face flood of appeals by homeowners

Homeowners battered by the economy are seeking help in unprecedented numbers from property tax review boards. Nearly 6,000 tax assessment appeals were filed in Monmouth and Ocean counties this year, pushing hearing dates months beyond the normal calendar.
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James Stuart, president of Stuart Appraisal Co. in Freehold, said homeowners “are looking at appeals more closely than at any time I’ve seen in over 20 years in the appraisal busi-ness. People see it as perhaps their one shot at having a say about their tax bill.”

Most appeals are unsuccessful. Tax officials said traditionally about a third of the appeals receive reductions. L. Ozzie Vituscka, the Ocean County tax administrator, said the success rate of appeals can top 40 percent “when the housing market is difficult or when a large number of revaluations are updated. The percentage of reductions is different each year.”

Still, a substantial number of area homeowners are willing to plunk down anywhere from $5 to $150 in appeal filing fees. The fees are based on the property valuation amount.

“People are really hurting in this economy, and when they get a tax bill for $9,000, they want to take a shot at knocking it down some,” said Wayne C. Pomanowski, a Monmouth County Tax Board commissioner.
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Officials said they forecast a larger number of appeals next year if the slumping housing market doesn’t improve.

The Ocean County board is handling 4,100 appeals this year, more than twice the average appeals heard in previous years since 2000, according to Waxman, who said the number next year could be in the 7,500 to 10,000 range. Waxman said the projection is based on the poor housing market and because revaluations are scheduled to be completed for 2009 in several of the county’s large municipalities.

Clark said Monmouth County also could see an increase in appeals next year. The Monmouth board received 1,800 appeals this year, he said. The number is close to twice the average of previous years since 2000.

The record number of appeals for the two counties — 10,175 in Ocean in 1994 and 7,009 in Monmouth in 1993 — came during that decade’s housing slump.

From the AP:

Pre-emptive strike launched against more NJ rebate cuts

A pre-emptive strike is being launched against the possibility of additional cuts to New Jersey’s property tax rebates.

AARP New Jersey plans to rally at the Statehouse on Monday. It’s decrying talk of more cuts to the state-funded rebates, which help homeowners combat the state’s high property taxes, which average $6,800 per homeowner and are twice the national average.

“There are fundamental flaws in the state’s property tax system, and until those are resolved we cannot falsely balance the budget on the backs of the people struggling to pay their property taxes,” said Marilyn Askin of AARP New Jersey.

Democratic Gov. Jon S. Corzine has proposed eliminating rebates for households earning more than $150,000 to help slash spending amid budget troubles.

Under his proposal, households earning up to $100,000 would still get rebates averaging $1,115, while those making between $100,000 and $150,000 would get $665 after getting $960 last year. Renter rebates would drop from as much as $350 to $80, while senior and disabled citizens would still receive $1,266.

From the AP:

Property tax rebates — touted as not being “an election year gimmick” — now ready to be cut

They’ve talked of keeping parks and the state agriculture department open and maybe boosting aid for towns and cities, but legislators have devoted scant debate this year to sustaining property tax rebates they so highly touted just a year ago.

Democrats who expanded the rebates last year and promised they weren’t an election-year gimmick seem ready to accept Democratic Gov. Jon S. Corzine’s proposal to eliminate rebates for households earning more than $150,000 and scale them back for others.

That has Republicans saying, “We told you so.” They spent last year deeming the expanded rebates a ploy to ensure Democrats — as they ultimately did — kept their legislative majorities in November’s elections.

“Why should the public believe anything we say here based on that experience?” asked Assemblyman Declan O’Scanlon, R-Monmouth.

But Democratic leaders said they couldn’t have foreseen the national economic woes that helped threaten state tax revenues and prompt Corzine to propose a $33 billion budget with $2.7 billion in spending cuts.

“No one could have foreseen the national recession to this degree when we passed that rebate program a year ago,” said Assembly Budget Chairman Lou Greenwald, D-Camden.

He noted the massive financial troubles that hit several leading Wall Street firms that employ many New Jersey residents, thus threatening state income tax collections.

“You just don’t see some of these things,” Greenwald said.
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The proposed rebate cuts would save the state $519 million.

Households earning up to $100,000 would still get rebates averaging $1,115 under Corzine’s $33 billion budget plan, and senior citizens would still get about $1,270.

But households earning between $100,000 and $150,000 would get $665, or about $300 less than last year.

Households earning between $150,000 and $250,000 would get nothing after getting $745 last year.

Renters would see rebates cut to $80 from as much as $350 last year.

Some fear further declines in tax revenue could lead to sharper rebate cuts, but Assembly Speaker Joseph Roberts Jr. _ who has proposed converting the rebate checks to state income tax credits said the rebates have been cut enough.

From the Star Ledger:

Rebates won’t rise along with property taxes

Homeowners hit with steep property tax increases last year have a second shock coming in Gov. Jon Corzine’s proposed state budget: New Jersey’s 20 percent property tax rebate will not apply to any increases in property tax bills that kicked in last year.

The Treasury Department said yesterday that basing this year’s rebates on 2006 property tax bills — not the 2007 bills — would save the state $85 million, including $34 million on rebates to senior citizens and $51 million on the checks to others.

As a result, most homeowners will receive the same rebate this year as last year, regardless of any increase in their tax bills.

“I don’t understand why he is doing this,” longtime Perth Amboy resident Alan Silber said of Cor zine. Silber said his property tax bill jumped by $1,255 last year. “There are only 15 municipalities in New Jersey whose taxes went up higher than ours. To base it on 2006 means none of that counts. That’s totally unfair.”
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The budget Corzine presented to lawmakers in March projected a $534 million cut in the property tax rebate program, largely through the elimination of rebates for homeowners earning more than $150,000 and a reduction in rebates for those earning more than $100,000.

The budget proposal also specified that 2006 tax bills would be used to calculate the rebates. That’s a change from the legislation that set up the rebate program last year, which based them on the property tax bills in effect each October.

Treasury Department officials yesterday submitted materials to the Senate Budget Committee spelling out how much the decision to ignore 2007 tax increases would trim the rebates that homeowners would otherwise receive.
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With rebates ranging from 10 percent to 20 percent of a homeowner’s taxes, exempting the $1,255 that Silber’s local tax bill grew by last year means he won’t get the extra $125 to $250 that otherwise would have been added to his rebate check.

From the Associated Press:

NJ lawmakers call for cities, towns to impose their own taxes

Assembly lawmakers on Tuesday said the state should weigh allowing cities and towns to impose their own taxes as more woes were predicted for New Jersey’s troubled state finances.

The Legislature’s budget official predicted the state will collect $289 million less in taxes next fiscal year than Gov. Jon S. Corzine has estimated as economic activity slows in the coming months.

“It should be clear that most of the risk in this forecast is on the downside, and it is easy to imagine plausible economic scenarios in which the outcome is considerably more dire,” David Rosen, the legislative budget and finance officer, told Assembly lawmakers.

Corzine’s $33 billion budget already calls for cutting spending by $2.7 billion to try to right finances plagued by high debt and taxes.

A $289 million shortfall would require either additional cuts or increased taxes, but Corzine has said he currently doesn’t support tax increases. He has also said he wouldn’t be surprised if less revenue came in than was estimated.
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But Greenwald said lawmakers should look at how other states let municipalities charge their own taxes.

New Jersey local governments raise nearly all their revenue from property taxes, which average $6,800 per property owner in New Jersey, twice the national average.

But New York, for instance, allows local governments to add their own sales taxes. Many states and cities allow local income taxes. Some have a personal property tax on cars, trucks, motorcycles and other vehicles.

“We ought to look at that, too,” said Assemblywoman Joan Quigley, D-Hudson.
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Corzine said letting municipalities impose their own taxes “makes sense and could potentially go a long way to relieving some of the pressure that exists with property taxes,” but was uncertain amid economic worries.

“I’m not particularly inclined to think that having new taxes at a time of economic recession is a good idea, so I’d be a little hesitant about the immediate imposition,” Corzine said.

From the AP:

Leading mayor says property taxes ‘public policy enemy No. 1′

A leading New Jersey mayor calls New Jersey’s highest-in-the-nation property taxes “public policy enemy number one.”

In doing so, he beseeches New Jersey lawmakers to reject Gov. Jon S. Corzine’s plan to slash state aid for towns and cities.

East Orange Mayor Robert Bowser plans to testify Wednesday before the Assembly Budget Committee that nothing is more important than property tax relief.
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“Every state policy, and especially the state budget, has to be viewed from that perspective,” Bowser said.

Local officials claim the proposed 10.5 percent cut in municipal aid would boost property taxes that are twice the national average at $6,800 per homeowner.

Corzine’s $33 billion budget plan seeks $2.7 billion in spending cuts to try to fix state finances plagued by deficits, high debt and taxes and sagging revenues.

It proposes cuts in state funding for property tax rebates as well as aid for municipalities, hospitals, colleges and universities and nursing homes.

“It is hard to get away from the fact that these are lean times, in addition to the structural problems we have as a state,” Corzine said.

Corzine’s municipal aid cuts would hit smaller towns hardest — sharp decreases for communities with 5,000 to 10,000 people and nothing for towns with less than 5,000 people. Those towns could get grants to help share services or merge with neighbors.
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Property taxes rose 5.4 percent last year statewide.

From the Star Ledger:

State aid cuts will hit small towns hardest

Figures released by the state today show in dollars and cents what Gov. Jon Corzine warned was coming when he proposed his state budget last week: Cuts in municipal aid will fall hardest on New Jersey’s 323 smallest towns.

While even the state’s largest city, Newark, will lose $6.7 million in state municipal aid, it is the towns with fewer than 10,000 people that would see the most dramatic cuts in funding from Trenton under Corzine’s spending plan for the fiscal year that begins July 1. Overall state aid for this group of towns will be cut by 22.7 percent, compared to a 7.5 percent cut for towns of more than 10,000 people.

Local officials are already predicting the aid cutbacks will lead to increases in local property taxes, reductions in public services and layoffs of municipal employees, including public safety personnel.

“With the release of these numbers, we can begin to gauge the human costs of the unprecedented proposal on the residents of the municipalities all around the Garden State,” said William G. Dressel, director of the New Jersey State League of Municipalities.

Corzine is proposing a $168 million cut in municipal aid, part of his effort to reduce spending and cut the overall state budget by $2.7 billion, to $32.97 billion. Towns with fewer than 5,000 people will get no money through the Consolidated Municipal Property Tax Relief Act program and those with 5,000 to 10,000 will have their current aid levels cut in half.
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“Obviously, municipalities have to look at the numbers and realize there is only so much revenue from the state and they must look to save money through shared services and consolidation,” Doria said. “They have to understand things may not get better when you look at the economic forecast for the next year or two. They have to look at how to deal at the local level as we are doing at the state level.”

From the NY Times:

Corzine Is Said to Weigh Cutting 3,000 Jobs and One Department

Faced with a worsening economy, Gov. Jon S. Corzine is considering reducing the state’s work force by 3,000 employees and closing at least one department in the administration as part of his plan to slash up to $2.5 billion from next year’s budget, people who have been briefed on his plans said on Tuesday.

State Senator Barbara Buono, a Democrat from Middlesex County and the chairwoman of the budget committee, said that Mr. Corzine — who will unveil his budget for the new fiscal year next Tuesday — was weighing eliminating the Department of Personnel and pushing for an early retirement package — not layoffs — to save tens of millions of dollars.

“We need to end this longstanding bureaucratic inertia where departments and agencies refuse to face up to wasteful spending practices and a lack of oversight,” Ms. Buono said. “I think we really need to change the mindset of how government operates.”

Administration officials, who spoke on the condition of anonymity because they were not authorized to talk about the plan, said that up to 3,000 workers could be affected, many of whom would presumably be older and have higher salaries. Some union leaders and lawmakers said, however, that they were wary of the governor’s plans.
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“There will probably be reductions in staff,” Mr. Corzine said at a town hall meeting in Atlantic County two weeks ago.

When asked on Tuesday about the possibility of early retirement and the elimination of the Department of Personnel, Mr. Corzine’s press secretary, Lilo Stainton, said that while it was premature to discuss details of the budget, the governor “has made clear that it will include severe cuts, and all options are now being weighed.”

From Newsday:

Democratic lawmakers: End most property tax rebates

Three Democratic lawmakers on Monday proposed axing property tax rebates for most homeowners to help control state spending and avoid Gov. Jon S. Corzine’s proposed toll increases.

Sen. Jeff Van Drew and Assemblymen Nelson Albano and Matt Milam said rebates should continue only for senior citizens and disabled homeowners.

The rebates averaged $1,051 last year _ up about $700 from 2006 _ and are meant to help homeowners suffering from America’s highest property taxes, which are twice the national average at $6,330 per homeowner.

The expanded rebates were the centerpiece of Democratic efforts last year to ease the property tax burden. They were sent to households earning less than $250,000 per year. For most, the rebates equated to 20 percent of their property taxes.

The three Democrats, all from South Jersey’s 1st District, said their plan would save $1.3 billion. It comes with Corzine promising about $2.5 billion in budget cuts and proposing higher highway tolls as he looks to revamp troubled state finances.

The rebates cost the state about $2.3 billion last year, some of which was funded by the 1 percent sales tax increase from 2006. Still, voters in November rejected permanently dedicating half of that increase to property tax relief.

“The state is increasing taxes to provide relief,” Van Drew said. “It doesn’t make any sense. The people of this state spoke loud and clear this past November when they voted no on dedicating the remaining half cent to property tax relief.”

The three Democrats also want to ask voters this fall whether to permanently eliminate the rebates to save money.

“If we are wrong, let the voters tell us,” Albano said.

From the Asbury Park Press:

Town misses deadline for revaluation

MIDDLETOWN — A revaluation of tax assessments for properties in Monmouth County’s largest municipality will have to wait until next year.

County officials are now probing why Middletown did not comply with an order from the county Tax Board to have the revaluation take effect in 2008, instead of 2009.

Middletown officials, who hired a special attorney late last year to evaluate whether the township could legally seek a postponement of the revaluation, in part because of fluctuating real estate prices, say the muni-cipality did not have enough information to submit a complete filing by a Jan. 10 deadline.

“I didn’t believe that the town could be finished in time,” Charles Heck, Middletown’s tax assessor, told the county board Wednesday. “That’s what possessed me to file a book on Jan. 10 the way that I did.”
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Middletown’s last reassessment was in 1991; its last revaluation was in 1982, county officials said.

Middletown Deputy Mayor Pamela Brightbill, who did not attend Wednesday’s meeting, said that with the current downturn in the real estate market, values set in October 2007 could have become outdated fairly quickly, leading to numerous tax appeals from taxpayers.

“Some of these neighborhoods have not had a sale in six months,” said Brightbill, who noted that she is satisfied with the delay. “We didn’t think it would be a fair time.”

From the Record:

Open-space skimping assailed

New Jersey needs more money to save open space, maintain its parks, and support hunting and fishing, officials and environmental activists told state legislators Monday.

At a hearing to set the Legislature’s environmental agenda for the coming year, money woes were at the top of list for many speakers.

Neighboring states “are investing in their parks and they’re getting our tourism dollars,” Tom Gilmore, president of the New Jersey Audubon Society, told the state Environment Committee in Trenton. “If we’re going to have world-class parks and keep our ecotourism dollars here, then we’re going to have to invest in that.”

The state faces a quarter-billion-dollar backlog in capital and maintenance projects at state parks.
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New Jersey voters approved $200 million in borrowing in November to replenish the Garden State Preservation Trust, the state’s fund for conserving open space, farms and historic sites. But that money is expected to run out by 2010.
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Conservation groups would like the state to dedicate $325 million a year — some from annual revenues, some from borrowing — to land acquisition, the park system and wildlife programs, said Joanna Wolaver, Audubon’s policy director.
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There are signs that tax-weary voters are getting tired of paying more, even for normally popular open-space programs, warned state Sen. Jeff Van Drew, a Cape May Democrat. Last November’s referendum passed, but the vote was closer than in the past, he said.

“People are tapped out and they are taxed out and they are tired,” Van Drew said.

From the Star Ledger:

Corzine proposes four-point plan to restructure state finances

Announcing his long-awaited plan to restructure the state’s finances in his state-of-the-state address today, Gov. Jon Corzine called for freezing state spending, limiting future spending to revenue growth, sharply raising tolls to pay off half the state’s debt and requiring voter approval for all future borrowing.

“We must recognize we are at the end of the line on the ways of the past,” Corzine told a joint session of the Legislature. “Today I am presenting a restructuring proposal to end the era of financial imbalance and fiscal mis-management, once and for all.”

“First, I will introduce a budget in February that freezes spending at this year’s level,” Corzine said. “Second, for future budgets, spending will not be allowed to exceed recurring revenues.”

“Third,” Corzine continued, “we will capture the value in our toll roads to pay down 50 percent of the state’s debt and fund statewide transportation investments for a generation.”

“And finally,” he conclued, “all future debt issued without a dedicated revenue source must be approved by the voters.”

From the Home News Tribune:

Corzine: “Significant toll hikes” can cure NJ’s budget woes

Tolls on the Garden State Parkway, New Jersey Turnpike and Atlantic City Expressway could rise by more than 50 percent in 2010, 2014, 2018 and 2022
under a plan Gov. Jon S. Corzine unveiled today in his State of the State speech to the Legislature.

In addition to base increases of up to 50 percent, inflationary toll hikes would also be tacked on every four years, for 75 years. Beginning in 2010 motorists would for the first time pay a 34-cent toll to drive on the part of Route 440 connecting the Turnpike to the Outerbridge Crossing in Middlesex County. Those tolls would increase at the same rate as those on the other roads.

Altogether, the tolls could rise by at least 550 percent by 2022, based on recent inflation, although the exact figure would depend on how the inflationary increases are factored into the increases.

“I want to be clear and honest up front: My plan involves significant toll hikes. Those toll hikes will be predictable, fair and reflect increases in the cost of living, past, present and into the future,” Corzine said.

Corzine’s long-awaited plan is aimed at raising between $30 billion and $40 billion to help cut state debt and pay for 75 years of transportation projects. The governor estimated the state needs $40 billion over 10 years for bridges, roads and mass transit.

Corzine also pledged to freeze state spending in the fiscal 2009 budget he will introduce next month and said his plan would stabilize state finances for the future.

From the Star Ledger:

Corzine challenges toll plan critics to propose alternative

Gov. Jon Corzine today challenged critics of his plan to steeply hike Turnpike, Parkway and Expressway tolls to propose an alternative, saying he has examined them and all are bad.

“Before critics rush to judgment, this toll schedule needs to be contrasted with equally robust alternatives of tax increases or budget cuts that would produce the same results,” Corzine told a joint session of the state Legislature.

He said it would require a 20 percent “across-the-board” increase in the income tax to achieve his goals of paying off half the state’s debt and funding transportation improvements for the next 75 years.

“That 20 percent increase would be permanent and apply to every taxpayer - not just millionaires,” Corzine warned. “If people think that is too burdensome, we could instead levy a 30 percent increase in the sales tax.”

From the AP:

New Jersey enters 2008 facing major budget woes

With Gov. Jon S. Corzine finalizing plans to increase highway tolls to help solve the state’s chronic fiscal woes, New Jersey enters 2008 with the nation’s third largest budget deficit, according to a new analysis.

Corzine is weighing plans to boost Garden State Parkway and New Jersey Turnpike tolls to pay state debt. He plans to introduce his plan to the Legislature on Jan. 8.

But the state also faces a projected budget deficit of up to $3 billion for the fiscal year that starts July 1, a hole that comes with Democrats looking to increase state aid for schools by about $580 million.

A recent review by the Center on Budget and Policy Priorities found 13 states, including several of the nation’s largest, face budget shortfalls next year. Only California and New York face larger gaps than New Jersey.

California faces a deficit that could be as large as $14 billion, while New York faces a projected $4.3 billion shortfall, the review found.

The center cited housing market troubles as a leading cause for state fiscal woes, cutting sales tax collections from the sales of homes, furniture, appliances and construction materials, but New Jersey has had annual budget deficits since 2001.

It has solved them by, among other moves, increasing income taxes, corporate taxes, cigarette taxes and sales taxes.

In 2006, the Garden State increased sales, corporate, cigarette and other taxes by $1.84 billion, easily the largest total tax increase among states that year, though it avoided tax increases in 2007 when Democrats who control the Legislature faced re-election. They kept their control in last November’s election.

Corzine hasn’t ruled out tax increases in 2008, but hasn’t indicated he will propose increasing any, either. He has noted state taxes are considered high, and The Tax Foundation recently determined New Jersey has the nation’s third-highest tax burden.

Rather, Corzine has asked his administration to present ideas to cut $3 billion from the state’s $33.5 billion budget.

From NorthJersey.com:

N.J.’s debt burden tops $38B

A new report shows New Jersey’s record debt is now above the $38 billion mark, a figure Governor Corzine has vowed to slash in half with a yet-to-be disclosed “financial restructuring” plan that includes toll hikes.

The new total debt number comes just as Corzine is ramping up his effort to convince residents that toll increases are the best way to fix the state’s financial problems. He is expected to roll out details of the plan in early January.

The governor and others have warned that New Jersey’s mountain of debt will hamper its ability to build roads and schools, or adapt to other public needs, like health care for low-income children. This year, the state paid $3.1 billion for its annual debt, or nearly 10 percent of the state’s budget.

In all, New Jersey residents face both the fourth-highest total debt and per-capita debt burdens in the nation, according to the report compiled by the New Jersey Commission on Capital Budgeting and Planning.
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The commission’s report puts debt issued directly by state government at about $30 billion. The figure rises to $38.1 billion when all debt issued by independent agencies such as the New Jersey Economic Development Authority and the Sports and Exposition Authority is included.

Both the general and total debt amounts included in the report are in line with the debt figures listed in a comprehensive report on state debt published by The Record in August.

That report outlined how total state debt jumped from $13.3 billion in 1998 to more than $37 billion this year. It also showed how state officials have borrowed huge chunks of money to spend on roads and bridges, colleges, hospitals and school aid. It also detailed how the state borrowed billions to plug short-term holes in the state budget, a practice halted in a 2004 state Supreme Court decision.

Lawmakers also borrowed against New Jersey’s payout from its lawsuit against the nation’s tobacco manufacturers.
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“It is the ever-increasing debt burden that is sucking the life out of the state’s finances and our ability to serve our citizens,” Corzine said. “Make no mistake, I am willing to lose my job if that’s necessary to set our fiscal house in order and get New Jersey out from the debt burden constraining our future.”

From NorthJersey.com:

N.J. to vote on tax relief funding

Voters will get to decide whether to amend the state constitution to dedicate one cent of the state’s 7 percent sales tax to property tax relief through a ballot question next week.

The measure is expected to pass easily, which would mean that more than $1.4 billion in sales tax receipts will be dedi- cated to property tax relief annually.
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Another critic is Jon Shure, president of New Jersey Policy Perspective. He argues that dedicating sales tax money for property tax relief limits the state’s ability to deal with future budget needs, takes away money that could otherwise be used to reduce the structural deficit and puts off the comprehensive restructuring of state and local taxes that New Jersey really needs.

“Dedicating revenues is one thing that got us into this mess,” Shure said. “It sounds like such good policy … but it really is a way of avoiding tough decisions and when you add them all up over time, they have contributed to the state’s fiscal mess.”

“The purpose of the state budget process is to determine priorities,” he added. “How does the state set priorities if it’s dedicating this and that, avoiding hard discussions about what we really need and how we can pay for it?”

Bogota Mayor Steve Lonegan is campaigning against the ballot question with lawn signs, bumper stickers and media appearances.

Lonegan agreed that the state should not be diverting money away from addressing the structural deficit. He also feels the underlying statute, which calls for one percentage point of the sales tax to be spent on property tax relief, but not necessarily rebates, is “vague, ambiguous and misleading.”

Last year, Corzine and legislative leaders fought over the sales tax increase, with Corzine arguing in favor of it as a way to close the budget gap and lawmakers against it. The disagreement led to a weeklong shutdown of state government.