Category Archives: property tax reassessment

Corruption Behind the $4 Million Tab for Tax Appeals in Middletown

By guest blogger Linda Baum

I’m sure we all recall the big jump in our property assessments on 2009 tax bills. That was the result of a town-wide revaluation done at the height of the market in 2008 — a huge mistake. It guaranteed there would be an onslaught of appeals and the drastic measures we saw this year by the Mayor and Township Committee to find extra money to pay the $4 million dollar tab.

Remember the ugliness? The seizure of $500,000 of library funds and threats of police layoffs to gain concessions. Middletown certainly didn’t feel like a great place to live.

The Township should have done a revaluation years earlier. It had been at least 15 years since the last one. The company hired to do the revaluation had difficulty explaining the delay. That company, Realty Appraisal, does loads of revaluations around the State, and the cause for the delay didn’t stem from their efforts. So then where does blame lie?

If you spoke to the County Tax Administrator, I’m sure he would tell you that revaluations should probably happen every 4-5 years. By waiting, Middletown drew the ire of the County Tax Board.

Middletown Republicans basically thumbed their noses at the County and refused to do a revaluation while other municipalities followed the law. Meanwhile, the richest property owners in the Township saw property values increase hundreds of thousands or even millions of dollars in that time period while their taxes were based on assessments from long ago.

Residents in less affluent sections of the Township were picking up the tab for the Navesink River Road crowd. That’s because when expensive properties are dramatically under-assessed, the effect is to remove potentially hundreds of millions from the town-wide assessment base. The result is that everyone else pays proportionately more.

The low assessment base means that the tax rate would have been set too high. Evidence of that is the big decline in the overall tax rate upon revaluation – it went from $3.787 in 2008 to $1.725 in 2009 (per $100 of assessed value). Owners of newly built homes would have been among the most adversely affected by the inflated tax rate, which, coupled with their higher more up-to-date assessments, means they were paying more in property taxes than they should have been in the years prior to the revaluation.

The bottom line is that the more valuable your property and the longer you owned it, the more money you stood to save from the Township’s failure to revaluate.

Per the County, around 60% of Middletown residents saw a reduction in taxes as a result of the revaluation. Since the Township still needed to collect the same total revenue, it stands to reason that owners of high end properties saw the largest dollar increases in their taxes after the revaluation.

It seems to me the Township most likely delayed the revaluation for two reasons.

First, the Republican Party leaders resided along the Navesink River Road corridor and had enjoyed tax-free, enormous increases in the value of their homes. As they took advantage of this increase in equity, the Township gave them a free pass. A revaluation would have increased taxes for many of them.

Second, Democrats had started to take seats on the Township Committee and the Republican Party desperately wanted to avoid losing votes, and possibly control of the Township, by doing a revaluation. Republican strongholds like Shadow Lake might have punished Republican leaders for tax increases and shifted the balance of power.

The County was upset with Middletown officials and, in 2008, took the unprecedented step of suspending our tax assessor, Charlie Heck, for failing to submit the paperwork necessary to do the revaluation. In a brazen admission of the underlying truths, then Mayor Scharfenberger actually referred to Mr. Heck as “Saint Charlie”. And this year, Mayor Fiore and our all-Republican Township Committee voted unanimously to award Mr. Heck a $15,000 bonus.

While you can draw your own conclusions, it seems obvious to me that Republican officials manipulated the process for their own political and personal financial gain. Due to their delays, when they were finally compelled by the County to submit the data for the revaluation, they did so on the eve of the financial crisis, just before property values plummeted. It would have been wise to postpone the revaluation until the market settled, but they couldn’t ask for another extension because they were already in deep trouble with the County for waiting as long as they had.

The delay cost taxpayers dearly. To deal with the unrealistic property data created by the poorly-timed revaluation, the Township was forced to undertake a costly reassessment this year, forcing taxpayers to expend hundreds of thousands of dollars on a reassessment that could have been avoided.

The overall tab may be $6 million or more now. Township officials won’t reveal how much or exactly where the money is coming from to pay for it. But appeal awards continue to roll in, and one thing is certain. Middletown residents will be feeling the sting for years to come.

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Filed under Charles Heck, corruption, Middletown Township Committee, property tax reassessment, property tax revaluation, Republicans, Shadow Lake, tax appeals, tax assessor, tax rate

>Robo Call From Concerned Citizens of Middletown

>While I was going through my voicemail last night I discovered a Robocall left by a goup calling themselves “Concerned Citizens of Middletown”.

The robocall was about the recently completed township wide reassessment and seems to have been smartly timed to coincide with the mailing of property tax notices to Middletown homeowners.
The message seems to be simple enough; Just because homeowner’s property valves have been reassessed lower it doesn’t mean that the amount of taxes they will pay will be lower as a result. Middletown must raise the tax rate to correspond with falling property values in order to collect the $45 million dollars or so needed to support the Township budget.
I recorded message off my answering machine and have posted it below along with a transcript below that.
My only question about this robocall is, who is this group that calls themselves Concerned Citizens of Middletown? I like their message.
I wonder if they have anything to do with local TEA party activists?

http://www.archive.org/flow/flowplayer.commercial-3.2.1.swf

Hello, I am a concerned Middletown resident.


Have you heard that the Township committee is engaging in an elaborate shell game with our tax dollars?

After spending millions on a re-evaluation and now a reassessment to fix faulty property values, our taxes will not be going down.

As a matter of fact they will be going up!

Regardless of how our homes are valued the Township needs to collect $45 million to balance its budget.

Pay close attention to your next tax bill then check with your neighbors. Were their taxes affected?

Paid for by the Concerned Citizens of Middletown.

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Filed under Concerned Citizens of Middletown, Middletown NJ, property tax reassessment, property tax revaluation, Robo-calls, Tea Party

>Middletown Tax Assessor To Receive $15K "Bonus" Under New Salary Ordinance

>According to the new Township Salary Ordinance 2011-3027 that will be voted on and possible adopted at Monday night’s Township Committee meeting in Middletown, the Township Tax Assessor Charles Heck, is in for a windfall bonus of $15,000 for doing such a great job preparing for the Township reassessment.

Heck’s base salary is already over $108,000 according to the APP’s Data Universe . And everyone knows what a great job he did preparing the Township’s re-evaluations, he was suspended without pay for withholding information and not turning in reports on time. The work he did was of such quality, it sparked a huge avalanche of tax appeals that the Township is still trying to dig itself out from under.
Now, the Township thinks that Heck was overworked gathering numbers for Reality Appraisal, the company that the Township paid $400,000 to recently and was in charge of the reassessment, so he should be given a $15,000 bonus for all his extra work!
According to former Committeeman Sean Byrnes, the Township Committee tried last year to give Heck his bonus, but when Byrnes complained and disagreed with the idea it was dropped from consideration. Now that Byrnes is no longer on the Committee, those that feel Heck should be compensated for his fantastic extra work on behalf of the Township, have once again introduced it and plan to move forward.
I suppose this bonus money is coming from the funds that have been pilfered from the Library’s $500,000 that they Township has just confiscated.
BTW – The Assistant Tax Assessor will also be receiving a $5,000 bonus according to Ordinance 2011-3027 . Does anyone know who that person is? They must be doing an equally bang up job as Heck has done to justify a bonus when other’s have been subject to a salary freeze.

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Filed under Asbury Park Press, bonuses, Charles Heck, data universe, Middletown NJ, property tax reassessment, property tax revaluation, resolutions and ordinances, tax assessor

>Reassessment On Tonight’s Agenda In Middletown

>If you’re like me and the many others township residents that I have spoken to, than you also have received your property tax reassessment notification in the mail recently. From what I have determined, Realty Appraisal has been sending out notification of new property assessments to residents over the past two weeks.

As a result of this, part of tonight’s agenda for the Middletown Township Committee meeting will be to discuss the status of the recent reassessment (which I have no doubt has been completed by now).

For those that do not know, Reality Appraisal is the same company the Township paid over $2M to conduct the less than stellar property tax revaluation 2 years ago. This recent attempt at reassessment has cost the taxpayers of Middletown an additional $400K.

So armed with these new assessment figures, I would suspect that the Township Committee will be discussing what the new tax rate should be based on tonight. Or, better yet, I would think that the Township Committee should be producing a budget to present.

If the Committee would present an outline of the budget then a somewhat accurate tax rate can be formulated and taxpayers could be informed of what they need to pay to keep Middletown operating for 2011.

After all, we are 2 months into the year and the Township has already appropriated $25,131,237.13 including the resolution that will be voted on tonight for another $646,709.00 in emergency appropriations.

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Filed under Middletown, property tax reassessment, property tax revaluation, Township Committee

>It’s Good To Know That Middletown’s Redistribution Of Wealth Is Underway

>I read today in the Asbury Park Press that Middletown has finally started the process of redistributing the wealth around town, by launching the long sort after property tax reassessments.

This is something that the Township has been fighting against doing, tooth and nail, since the property tax revaluations went through a few a couple of years ago. The only reason why this reassessment is happening is to stop people and businesses in Middletown from filing tax appeal that have cost the town a few million dollars since, no other reason.
So when Middletown’s Municipal Attorney Brian Nelson is quoted as saying, “First and foremost, we’re doing this out of fairness to taxpayers, but the tax appeal costs were proving to be exponential.”, he was only being half honest. The township never does anything out of fairness to the taxpayers, they only do what is first and foremost fair for itself.
So with this reassessment that should be done before March of next year, there will be some winners and losers just as before. Some home and business owners will see their property taxes reduced, while others will see them increase based on their newly reassessed values.
This reassessment will not be the great panacea that people think it will be due to the fact that unless the Township cuts spending significantly next year they will not see a very big decrease in their property taxes. Middletown will still need to raise close to $42M through taxation to balance the FY’11 budget regardless. So instead of the tax rate being 39.85 cents per $100 of assessed valuation, that number may skyrocket upwards over .45 0r .50 cents per $100 of assessed value.
Make no mistake, this reassessment was not ordered out of goodness or fairness towards the average taxpayer in town, it was made in order to put a halt to all the tax appeal judgements that have been and continue to be lost by the town in court which have cost the township $millions.
I, like many others, just hope that the new reassessment of our homes will be low enough to make a difference. The town will be paying for it for a long time, but that is a post for another time.

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Filed under Asbury Park Press, Middletown, municipal tax rates, property tax reassessment

>Smoke and Mirrors Part II: Resolution NO. 10-248 – Authorizing Township Wide Property Tax Reassessment

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Below is part II of Gerry Scharfenberger and crew’s smoke and mirror attempt at once again deceiving voters into believing that they are working in their best interests of township residents rather than their own.
Resolution No. 10-248 will be introduced Monday night at the monthly meeting of the Middletown Township Committee and may be pushed through for a vote without any discussion by Committee members in Executive Session, just in time for the annual Middletown Republican October surprise for the November elections.
If you read my earlier post as to why I say this resolution is nothing more than a smoke and mirrors trick to divert residents anger away from the huge 12% municipal tax increase, you will understand that the reassessing of home values will have little impact on the actual amount of property taxes that they will pay because regardless of what local real estate is appraised for the Township still needs to raise in excess of $45 Million in taxes. Sure, the home appraisal will drop by a few thousand dollars but as an effect of the drop off in value the tax rate will need to adjusted higher to compensate for the loss of home values.
As anyone learned while in science class, Newton’s third law of physics states, “for every action there is an equal and opposite reaction”. So, as property values are adjusted downward, property taxes are adjust higher to compensate for lost revenues.
The other problem that I have with this resolution other than the timing and intent, is the lack of transparency in which it is being presented.
During the public comments portion of the special budget adoption meeting of September 7th, resident Jim Grenafege made a comment to the effect that in his opinion, the member of the minority party sitting up on the dais was routinely excluded from discussions and not given the same access to information, often stonewalled, as other committee members may receive. Grenafege’s statement naturally got a rise out of our acting mayor, Gerry Scharfenberger, who vehemently denied that such things go on.
Well, I want to point out this resolution as an example of what Jim Grenafege was talking about because other than seeing Scharfy’s press release that is forth coming, I understand that Sean Byrnes was not aware that actions to conduct a town wide reassessment had taken place.
RESOLUTION NO. 10-248
TOWNSHIP OF MIDDLETOWN
COUNTY OF MONMOUTH

RESOLUTION AUTHORIZING ASSESSOR TO PREPRARE TO
CONDUCT A TOWNSHIP-WIDE PROPERTY TAX REASSESSMENT

WHEREAS, after successfully seeking repeated deferrals due to extraordinary market conditions, the Township of Middletown was ordered by the Monmouth County Board of Taxation to conduct a property tax revaluation that was completed over two years ago at the height of the real estate market; and

WHEREAS, the Township has been forced to refund in excess of $1 million resulting from successful property tax appeals for the last tax year at a time when overall municipal revenues have experienced a significant decline due to current economic conditions; and

WHEREAS, such refunds have a devastating impact on the Township’s budget because the Township must refund nearly four times the amount of money it actually collects in taxes for municipal purposes without any refund from the school district; and

WHEREAS, the making of such refunds typically require special short-term financing by the Township as refunds must be made within 60 days of judgments being rendered as a matter of law; and

WHEREAS, Governor Christie’s new 2% tax levy cap law, which will become effective for the purposes of the 2011 tax year, does not provide any exception for the financing of refunds ordered via tax appeal judgments; and

WHEREAS, current market data analyzed by the Assessor’s office demonstrates that property values have declined significantly below assessments made based on the County Tax Board’s ordered revaluation which is resulting in a growing number of successful tax appeals with an even greater potential liability developing for the 2011 tax year; and

WHEREAS, a Township-wide reassessment does not require detailed inspections like those which are conducted during a revaluation and will reestablish fair and equitable property tax assessments that are more precisely in line with current market conditions throughout the Township while decreasing the number of tax appeals in the future; and

WHEREAS, pursuant to N.J.A.C. 18:12A-1.14(c) and based on the forgoing analysis, the Assessor has filed an Application for Reassessment that has been approved by the County Board of Taxation and Division of Taxation and now having notified theTownship Committee of the same.

NOW, THEREFORE, BE IT RESOLVED by the Township Committee of the Township of Middletown in the County of Monmouth, State of New Jersey that the Tax Assessor is hereby authorized and directed to take any necessary and appropriate action to commence a Township-wide property tax reassessment for the 2011 tax year

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Filed under physics, property tax reassessment, property tax revaluation, resolutions and ordinances, Sean F. Byrnes, Sir Issac Newton, smoke and mirrors

>Smoke and Mirrors: Scharfenberger To Pledge Support For Property Reassessments To Deflect Anger Away From 12% Tax Incease

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Can you believe this one? In a soon to be released press statement, Middletown’s acting mayor Gerry Scharfenberger, will announce his plan to support a town wide property tax reassessment.

It seems that Scharfy and crew have decided that they can’t wait for their usual October surprise. The need to turn the tide on their ill-conceived budget, that has risen the local tax rate by 12% and angered a large majority of residents, has them running scared and desperate for votes.

How much do you think a new Town wide property reassessment will cost, especially after the botched revaluations cost the Township a couple of $ million to complete in the first place?

And really, does Scharfenberger and his buddies think that a reassessment will have a positive effect on the average homeowner? Middletown still needs to collect $45 million worth of taxes from residents to support the budget. The reassessment may lower the overall assessed value of ones home and make it seem as though the average homeowner will get a break, but in actuality the assessed tax rate will climb to offset the decrease in revenues from the lower home assessments.

The assessed tax rate now stands at $0.3975 per $100 of assessed value. That rate will increase as home values are reassessed lower by the township, it will have the same effect on both the School and County portions of the tax bills as well.

Essentially therefore Scharfenberger’s plan is nothing more than a smoke and mirror parlor trick or a game of Three Card Monty, to divert voters anger away from the 12% municipal tax rate increase.

I’ll post the press release as soon as it is available.

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Filed under Gerry Scharfenberger, Middletown Township, press release, property tax reassessment, property tax revaluation, smoke and mirrors, tax increase