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you think newark costs more because its maintaining more government buildings or its maintaining more of a public assistance budget?
I said that would be ONE EXAMPLE if we were trying to formulate a logical explanation for why the effective tax rate in the likes of a city like Newark would have to be higher than in a small 'burb.
Quote:
Originally Posted by CaptainNJ
also, you would have to have higher rates to amount to any kind of money since many of the apartments are worthless and many of them also probably have non-paying tenants.
Normalizing the tax rates lets you compare what you'd pay for properties of similar market value. It does not normalize for market value; Millburn property is simply worth more. Take the total value of all the property in Newark, divide by the number of people in Newark -- this gives you Newark's per capita tax base. Do the same calculation for Millburn, and you'll get Millburn's per capita tax base, a much higher number.
this is a very good point. let's say millburn properties skyrocketed in value over the next 5 years and everyone else stayed the same. say....milburn doubles. just because they double doesn't mean that the town needs double the revenue (though they may gladly accept it) - so what would happen, if assessments updated, is the tax rate for millburn would be cut in half (assuming they have the same total city budget as now).
it's complicated, but if you do some digging into your city's expenses, you can start to understand the differences from one city to another. for instance, west caldwell was on that report with a rate near 2.1%. west orange is closer to 3.1%. west caldwell has a volunteer fire department, west orange has a professional fire department. things cost money, which requires more taxes.
Thanks to the experts for shedding some light, but I am still perplexed with a latest note from County. Here is my situation:
My county's General tax rate is 2.557% and my property's assessed value is $339,300. So my property taxes should be 339,300 X 0.02557 = $8675.901. But the note from County says $ 8.804.83. WHYYYYYYYY? What am I doing wrong here?
The link below will take you to each county's tax rate by town. In VERY general terms, the lower the tax rate the more expensive the homes are, as a whole, in that town.
Thanks to the experts for shedding some light, but I am still perplexed with a latest note from County. Here is my situation:
My county's General tax rate is 2.557% and my property's assessed value is $339,300. So my property taxes should be 339,300 X 0.02557 = $8675.901. But the note from County says $ 8.804.83. WHYYYYYYYY? What am I doing wrong here?
Any insight would be greatly appreciate.
the rate probably went up for 3rd and 4th quarter since it's done by fiscal year. the rate of 2.557 was probably for 1st and 2nd quarter.
If you want to get a better idea of what is the "ratio" of assessed value to real market value per town, then check out the links on this NJ page. Understand that those are just averages per town. Call your local assessors office or county assessor and talk to them about it. They might be able to explain it in better detail.
BAsically, if you fall withing 15% of the assessed value to true value ratio, then they will deny your appeal. If you fall outside the 15% range, your tax assessment will be changed.
The Effective Tax Rate is based on a Ratio, which is generated on a yearly basis by the individual Counties in the State of New Jersey. The Ratios are relevant to when the town was last assessed. If the town was just assessed, the Ratio is 100%. Typically, when values are increasing, the Ratio will continue to lower, resulting in the Equalized Value of a property increasing. For example;
If a home is assessed at $100,000 in 2013, with its equalization rate at 100%, its Equalized Value is of course $100,000.
If within the following year, the County has determined that values have gone up 5% in that town, the value of the home is $ 105,000.
Of course, all towns do not increase or decline equally. As a simple example, lets say the following towns were assessed in the same year. To keep it simple, here is an example, with all the towns then becoming 100%
Town Avg Value Ratio Equalized Value Tax Rate Effective Tax Rate
A $ 100,000 100% $100,000 3.00 3.00
B $ 100,000 100% $100,000 2.40 2.40
C $ 100,000 100% $100,000 4.00 4.00
The following year, Market A has increased by 5%, market B by 10% with market C declining by 10%. The Ratios are then affected due to their usage of keeping the County somewhat in balance. (key word - somewhat) The results would be as follows;
Town Avg Value Change In Ratio Equalized Value Tax Rate Budget Adjusted Rate Effective Tax Rate
Value (assd val / ratio) Increase
A $ 100,000 + 5% 95% $105,263 3.00 2% 3.06 2.91
B $ 100,000 +10% 90% $111,111 2.40 2% 2.45 2.21
C $ 100,000 -10% 110% $ 90,000 4.00 2% 4.08 4.49
The equalized value is determined by the Assessed Value divided by the Ratio. eg. 100,000 / .95 = $105,263. The Tax Rate undergoes the same adjustment per se. 3.00 / .95 = 3.16. If the budget increases by 2% then the rate is multiplied by 1.02. 3.0 x 1.02 = 3.06. To calculate the Effective Tax Rate the Adjusted Rate is divided by the Ratio. 3.06 / .95 = 2.91.
As you can see, if the values in the town decline, the Effective Tax Rate increases while towns that go up in value have an effective rate that decreases. Ergo Millburn low and Newark high.
Of course budgets have a huge influence. Especially Education. Livingston, Montclair, South Orange, Verona, West Orange --> 60% or more for schools.
It is alo important to note that towns that towns don't cut budgets. If they initially see a problem spending all of the taxpayers money, they will work very hard at it until they figure out how. It would be great if they worked in the other direction, but, if budgets are lowered, it is not easy to get them increased in the future.
Bottom Line - property taxes are not about ratios, effective tax rates, nor even assessed values. It is about how much the towns are spending. It would be far more affective if citizens paid more attention and attended more town council meetings. But, that doesn't seem to happen.
Bottom Line - property taxes are not about ratios, effective tax rates, nor even assessed values. It is about how much the towns are spending. It would be far more affective if citizens paid more attention and attended more town council meetings. But, that doesn't seem to happen.
This has been discussed ad nauseam lately, so you could have probably used a more recent thread rather than reviving this old one. Your bottom line is incorrect because it IS about ratios, effective tax rates, assessed values as they are a reflection of "how much the towns are spending" as well as a few other things I will get to later.
The percentage spent on schools does not determine how much the town is spending and therefor, how much property taxes you are paying. For example, of the towns you listed that spend 60% on schools, some of the towns have much lower property taxes than some of the other towns on your list. In spite of the high percentage spent on schools.
Then to take it even further, you have the Abbott districts, which you haven't mentioned. They spend the least on schools, yet have the highest property taxes because property values are so low. So to say that an individual's property taxes are SOLELY about how much the town is spending, is not accurate. Two towns with the same number of homes may spend the same amount of money, but if property values are high in one town and low in another, the effective property taxes are going to be higher for the low valued town.
I suspect many of the businesses in Newark aren't paying their fair share and are there because they're getting a bargain to remain in Newark. NJ has become the public housing for businesses, keep getting cheap deals from the government just to keep jobs here. So they're not paying their fair share and it's not working because it's not out-pacing the amount of businesses leaving the state.
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