Legislative Reform For Tax Assessments On The Way?

by: Anthony F. Della Pelle
23 Aug 2011

Legislation seeks to create a more cost-effective and accurate process of real property tax assessments

New Jersey property owners continue to struggle under a crushing property tax burden. Instead of pursuing substantive policy initiatives to alleviate local taxes, the Legislature is instead looking to make changes to the process through which property is assessed for local taxation purposes. The stated goal of this legislation, Assembly Bill No. 3939, is to establish a more cost-effective and accurate process of real property tax assessments through consolidated county-based assessment.

The legislation, unanimously approved by the State Assembly earlier this summer, establishes a demonstration project in not more than two counties during the first two years after enactment and not more than two more in the third and fourth years following enactment. It is believed that Monmouth County is interested in participating in the demonstration project. Under A-3939, the real property tax assessment system in the county will remain decentralized in order to adjust to changes discrete markets and submarkets. The stated premise of the demonstration project is to create a collaborative effort between the county tax board (which will continue to hear tax appeals) and municipal assessors. Under legislation all municipalities in a county approved to participate in the demonstration program will use the same assessment software. All future revaluations and reassessments of real property by municipalities will be performed using the county system, which will be used for other assessment functions as well, such as assessment maintenance and calculation of added assessments.

More significantly, the legislation also revises the statutory deadlines associated with assessments and the filing of tax appeals. The demonstration project imposes a new process for the “Certification of Preliminary Assessment” to be completed by November 1 of the pre-tax year. Under A-3939 Notification Assessment Postcards would go out to property owners by November 15 of the pre-tax year. (Rather than the current date of February 1 of the tax year in question). The filing of the final tax rolls would be pushed back from January to May 5 of the year under appeal. However, the legislation requires that tax appeals be filed by January 15 as opposed to the current filing deadline of April 1 or May 1 (for municipalities with revaluations) of the tax year in question. The new deadline to file tax appeals is more than four months prior to the deadline for the promulgation of average ratios which under the legislation is May 25. Currently the average ratio is established no later than March 10, nearly one month prior to the deadline to file tax appeals. The legislation would thus produce a situation where there are different filing deadlines for those counties in the demonstration project and those not in the demonstration project.

The bill is currently awaiting action by the Senate Community and Urban Affairs Committee.