By DUSTIN RACIOPPI
One of Middletown’s biggest budget hurdles this year was dealing with an increase in tax appeals. The town is on the hook for more than $1 million and counting in judgments, as appeals continue to be filed.
In an attempt to avert fiscal disaster next year, the township committee has authorized an expedited tax reassessment in order to reflect true market value for the approximately 23,000 homes and other properties in town. The move will, for the most part, slow the trend of surging appeals in 2011, said Brian Nelson, the township’s attorney.
“The most important thing to me is to mitigate the potential losses next year,” Nelson said. “There will still be tax appeals, but the amount and judgments will be far less.”
Officials are renegotiating a contract with Realty Appraisal Company, which will work with the tax assessor to conduct the reassessment, to get work started as soon as possible. A reassessment typically costs about $400,000, Nelson said, but the town is trying to get a better price considering the circumstances.
Time is of the essence, Nelson said, in order to update the books for 2011.
“If this doesn’t start now, it’s not going to happen,” he said.
Unlike a revaluation Middletown’s last one was conducted a couple years ago, shortly after the housing market took a nosedive a reassessment does not involve physically inspecting homes. Instead, transactions since the last revaluation are compared and, in many cases, property values are readjusted to reflect the housing market, assessor Charles E. Heck said.
“The marketplace then was substantially different from what it is today,” Heck said. “It is in the best interest of all parties to do a reassessment.”
In doing such an exercise, there will be some winners and some losers, Heck said. But Nelson said readjusting values helps keep taxes from going up, and for officials, puts a brake on “a deadly cycle” of fighting tax appeals while trying to balance a budget.
“Some people will benefit by this. Some people won’t,” Heck said. “But the end of the story is it’ll be an equitable assessment.”
The township has the approval from the county to conduct the reassessment, but still needs state approval before it can get started.