At the September 9th Meeting, the Riverdale Borough Council approved a proposal by the Tax Assessor (currently provided by Butler through a shared-services agreement) to conduct annual assessments on both residential and commercial properties. I am sure you are asking “What does this mean for us?”
Normally town-wide re-assessments are conducted every few years or when the County decides there has been a significant change in valuations. Under the current system, if a resident or business owner feels their property value dropped and therefore should be paying less property taxes, they have the option of filing a tax appeal or waiting until the next town-wide assessment. Whether values have gone up or down, the gap in assessments has a number of disadvantages for both the individual and the municipality.
For the individual, a tax appeal can be a time consuming process that provides no guarantee of a reduction in taxes. For the town, if a tax appeal is successful, they may be looking not only at a reduction in future tax revenue but rebates as well; a burden born by the rest of us taxpayers. For the individual, a delay in revaluation can result in a large, unexpected increase. Similarly, a reduction in home and/or business values can result in a shock to the municipal budget. The theory is that continuous, annual assessments will provide a fairer and more accurate system for the allocation of local tax liability.
This concept is not new, in fact as early as 1799 all township assessors were directed by law to equalize assessments at an annual meeting in order to fairly spread the cost of county government (NJ State League of Municipalities Tax Brochure). As populations grew and tax law became more complicated, this task became too much for local assessors so, over the centuries, a number of alternatives for equalization were introduced. A common practice today for assessment is the study of sales-to-assessed-valuation ratios, in other words, comparing actual property sales figures to their assessed values. From this an assessor can determine whether similar properties within a municipality are fairly valued for tax purposes. Technology today enables assessors to perform this analysis on ALL properties in a municipality on annual basis. Of course it is still necessary to perform periodic physical inspections; the program that our Council approved calls for a rotating schedule that will ensure that all properties will have an on-site inspection once every four years.
It is difficult to predict if your property taxes will go up or down in 2016 as a result of this program as the results will most certainly be mixed. In the years to come we can anticipate to the results of the annual assessments to be more and more consistent.