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RED BANK: TAX BILLS SOAR ON ADJUSTMENT

rb-tax-080115-2-500x375-2985800Though the Red Bank board of ed adopted a budget with a 6.95-percent tax increase, a recalculation based on new data boosted that to 12.7 percent. (Photo by John T. Ward. Click to enlarge)

By JOHN T. WARD

taxes-2925011A drop in aggregate Red Bank property values as a result of appeals has sent the local school tax soaring, redbankgreen has learned.

Borough homeowners and other property owners found out about the 12.74-percent spike in the local school portion of the tax when they received their bills late last week, more than three months after the board of education adopted a budget indicating a 6.95-percent increase.

Included with the bills, and posted on the borough website,, was a “message to Red Bank taxpayers” that did not explain why the increase was so much higher than previously reported.

According to borough Chief Financial Officer Eugenia Poulous, the culprit was a $117 million drop in taxable real estate values, to $2.07 billion. The majority of the decline was the result of settlements and judgments on tax appeals filed by owners of apartment complexes and other commercial properties, she said.

The borough received certified figures showing the drop from the Monmouth County Board of Taxation in mid-July, almost three months after the board of ed adopted its $24.85-million 2015-’16 budget. That spending plan was based on the 2014 net valuation figure of $2.192 billion, she said.

Re-apportioning the amount to be raised by the two-school district from borough taxpayers sent the rate up, she said.

For the owner of a home valued at the borough-average assessment of $384,836, the new school rate of $.770 per $100 of valuation, puts that portion of the tax bill at $2,963.24 for the year, instead of $2,811.11 under the board of ed’s budget. And it follows a 10-percent increase in the average homeowner’s share of school costs in 2014.

The municipal tax, meanwhile, which was unchanged from 2014, was unaffected by the new property value figures because the borough had anticipated the drop in its budget, Poulos said.

The school district “never took into account the fact that our values went down,” she said Saturday.

Schools Superintendent Jared Rumage, however, tells redbankgreen that the district wasn’t privy to the data.

“It is my understanding that the borough received that information after they certified our budget – meaning they did not even have that information yet,” he said in an email.” You are asking me if I had adequate information, but the reality is that we did not have any information.”

Rumage said he only learned of the sharp upward adjustments from the letter insert in the tax bills. “I was expecting the tax increase to reflect the tax levy,” he said. “They are never exactly the same but this was a huge discrepancy due to the decrease in total assessed value.”

The new figures, he said, “should have been presented differently or accompanied by an explanation. The additional percentage comes from a scenario not attributed to the public school district. I am assuming RBR might be in the same scenario.”

Here are the rate increases by component levy reported in the borough letter insert:

Local Municipal Tax   (-0.37%)

County Tax  +2.43%

District School Tax  +12.74%

Regional School Tax  +6.57%

County Open Space Tax +7.69%

Municipal Library Tax  +6.46%

 Here’s more from an email Rumage sent to redbankgreen:
The Board of Education does not set a tax rate, the Board of Education does not control the total assessment value, and the Board of Education does not control the appeals process. Our 6.95% is a tax levy – it represents the percentage increase over the previous year’s school budget.  Again, this is a tax levy, not a tax rate.
Unfortunately, the Board of Education was not privy to the reduction in total assessed value at the time of our budget approval. As per procedure, the Board of Education uses the available information from the Monmouth County Tax Board. Also, it is my understanding that the Borough did not have the information regarding the extraordinary reduction until well after our budget adoption in April.
The assessed value used by the Board of Education was the preliminary value available in March by the Monmouth County Board of Taxation. This is standard operating procedure. The User Friendly Budget was a split year configuration, and the figures are not in any way relevant to this unexpected increase.
Also, based on the information I have received, I am inclined to believe that all other delineated components were similarly impacted – i.e. Regional School Tax, Municipal Library Tax, etc.
That all being said, assuming we did have this information prior to our budget process I am not certain things would be much different.  We worked diligently to prepare a budget that will allow us to achieve our goals, but was fair to the community.  We have a new vision in Red Bank and our budget was designed with that in mind.  We did not take shortcuts, we focused on the big picture, we made sacrifices, we were creative – and it all resulted in a budget that will allow us to become more efficient and ultimately, achieve our dreams for the children of Red Bank.

The board of ed’s next meeting is a workshop session at the middle school on August 11 that is expected to open to the public at 7:30 p.m.

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