When tax bills go out in the next few weeks, 622 Ocean City property owners will be able to keep a few more dollars in their pockets.
The owners won tax appeals that reduced the assessed value of their properties by a combined $113,061,900, an average of $181,772 apiece.
Based on that number and Ocean City's combined (municipal, schools and county) tax rate (75¢ per $100 of assessed value), the taxpayers will pay an average $1,363 less in taxes this year.
There were 642 appeals filed by the April 1 deadline in 2011, and only 20 were dismissed or withdrawn.
Ocean City Patch requested results of the recently completed appeals that show that values for these Ocean City properties continued to decline after the city's most recent "hybrid reassessment" in 2008.
The total value of all taxable property in Ocean City (its ratable base) decreased by slightly less than 1 percent (.0088) from $12.85 billion to $12.74 billion.
Ocean City Tax Assessor Joe Elliott said Ocean City continued to see a decline in market value, particularly in high-end properties—"anything over $1 million."
RESULT FOR HOMEOWNERS
The homeowners will see smaller tax bills for the third and fourth quarters of the year and will be credited for the first and second quarters so the bills that they've already payed reflect their new property assessments, according to Elliott.
Ocean City resident Vic Staniec filed five successful appeals and said he respects the work of Elliott, but because he feels the market will continue to decline, he'll file new appeals next year.
"Whenever you get real estate people and the Tax Office to agree on a number, that's a good thing," said Jon Batastini, an Ocean City attorney who successfully represented about 10 homeowners. "I was pretty happy."
For more information on the tax appeals process, visit the Cape May County Board of Taxation website.
IMPACT ON CITY
The result of the appeals will affect Ocean City in two ways, Director of Finance Frank Donato said.
- Because tax rates are already set, Ocean City will see $419,007 less in tax revenue this year. Tax bills for new properties will offset some of the loss, but Donato does not anticipate that new revenue will cover even half the loss.
- Since the ratable base will be smaller, the tax rate for next year will go up. Donato said that even if the city does not spend a penny more next year, the municipal tax rate will go up by three-tenths of a cent from the current 37.06 cents.
The Ocean City School District and Cape May County will be similarly affected by the tax appeals.
Donato said Ocean City saw only about 200 tax appeals last year, and he anticipates a number next year that may approach this year's 642.
But in a town with 19,108 taxable properties (and 977 tax-exempt properties), the number of appeals is relatively small, both Elliott and Donato said.
Donato said Ocean City saw a similar trend after a market decline in the early 1990s when there were thousands of tax appeals.
Since then, the value of the city's property has grown astronomically -- from $3.2 billion in 1993 to $7.2 billion in 2003 (after a 2002 revaluation) to $12.7 billion after a 2008 "hybrid reassessment" (in which the city's tax assessors worked a private firm).
The remarkable growth in the number and value of properties places Ocean City as one of the 10 most-valuable cities in the state.
The 2010 net valuation ("equalized" to compensate for differences in when assessments were last completed) of New Jersey's top towns are as follows, according to the New Jersey Department of Community Affairs:
- Jersey City: $22.4 billion
- Atlantic City: $20.1 billion
- Newark: $19.2 billion
- Toms River: $16.9 billion
- Edison Township: $16.1 billion
- Woodbridge Township: $14.4 billion
- Ocean City: $13.1 billion
- Brick Township: $12.7 billion
- Middletown Township: $11.9 billion
- Hoboken: $11.3 billion
But Ocean City's real estate values hit a peak somewhere around 2005-06, according to Donato. The 2008 reassessment and recent tax appeals worked to correct assessed values.
He said the city will meet with the county tax board to discuss taking a pro-active approach to reassessing certain areas of the island to reflect declining market values.
For years, Ocean City's steadily growing ratable base brought more tax revenue to the city each year. But now with the trend reversed (even if slightly), city and school budgets will be that much harder to balance.