Are Taxes Too High In Belleville?

Earlier this week, a number of commercial property owners attended the Belleville Towship Council meeting to complain about third-quarter tax bills that in some cases have risen by thousands of dollars. Many of those property owners -- who own or rent to businesses that are already struggling -- say such high taxes are unaffordable and may force them to sell, close down, lay off workers or put off needed improvements.

Yet these tax hikes come as municipal officials approved a budget that calls for only a small increase in spending. The school budget -- the largest component of the local property tax bill -- is also effectively flat. And the township’s tax assessor points to figures showing that Belleville has among the lowest rates of tax appeals in Essex County. (Appeals are filed by property owners who believe their taxes are too high.)

If the township and public schools have kept spending increases to a minimum, however, then why is it that some property owners got bills last week that seem to show their taxes rising by 50 percent or more?

Part of the problem, municipal officials say, is that some may be misreading their tax bill. The property tax bill is composed of three parts -- taxes for municipal services, the school district and to support Essex County functions. The school levy was set a few months ago, when the school budget was approved. The township rate was struck officially once the municipal budget was approved by state and local officials.

Township Manager Victor Canning said that Essex County, however, has not officially set its tax rate, forcing the township to send out an estimated bill for this quarter. What this means, in effect, is that property owners will not necessarily be paying the same amount in the fourth quarter as in the third quarter.

“When you get to that last quarter bill, there may be people who are getting money back,” Canning said.

Although the county tax rate has not been set, Canning said that the overall tax rate -- one that includes the county, municipal and school portions -- is likely to be around $3.20 per $100 of assessed value. In other words, the property taxes you end up paying for the entire year will be equivalent to 3.2 percent of the assessed value of your property, based on Canning’s estimate.

An appropriate tax rate for Belleville has been something of a moving target during the last few years. In 2007, there was a town-wide revaluation -- the first in 30 years -- to account for the dramatic rise in real estate values. But as everyone knows, those values promptly plummeted the following year and have been trending downwards ever since. Still, some property values have held up better than others.

Kevin Esposito, the township’s tax assessor, said that Belleville was one of the few communities in Essex that attempted to account for that drop in real estate prices. His office conducted a reassessment recently that was mostly done “in-house.” Most of Belleville’s taxable property is residential: the township has 8,300 homes and just 750 commercial properties, Esposito said.

The reassessment his office conducted resulted in many properties’ assessments being lowered -- which in turn saved Belleville from numerous tax appeals. There were 167 appeals in Belleville so far this year, but 342 in Bloomfield and more than 1,300 in Montclair. Irvington, which is equivalent to Belleville in size, had more than 1,100 appeals, according to county figures.

Appeals are expensive for a variety of reasons. They cost the town legal fees and force municipal officials to rework budgets to account for shifts in revenue. Esposito cited the case of Irvington specifically.

“They had a 17 percent increase in taxes last year,” he said. “They’re getting these appeals now and revenue is flowing out the door.”

Esposito said that his office -- which also used a consultant that has worked in Belleville for decades -- has been carefully monitoring shifts in property values. Typically, the township looks at a variety of factors when computing the worth of a property, including gauging the sale price of equivalent properties in the same neighborhood.

Many business owners who spoke during Tuesday night’s council meeting said their taxes were unreasonable because the economic slowdown has affected their bottom line. With less cash coming in the door, large increases in taxes are simply flat-out unaffordable.

But when assessing the value of a commercial property, Esposito said, the assessor’s office takes an additional step -- last year it sent out a “Chapter 91” letter to some businesses, a document where owners can provide information on the health of their business. If a business is struggling, that gets taken into account when the assessment is computed.

However, Esposito noted, “less than 50 percent” of business owners responded when letters were sent out in 2010.

(Editor’s note: Taxpayers, you are strongly encouraged to comment on this article. Have your taxes gone up? Down? Think you’re paying too much? Just right?)