OpEd in The Bergen Record: Shining a light on the ‘invisible’ tax
In case you had missed it, I have pasted below an Opinion Editorial piece that I had written that was published in the Record this morning on the “invisible” tax on our tax bills, namely our County taxes.
Although we are all aware of and involved with our municipal and school taxes, the County taxes, which are part and parcel of our property taxes often times go unnoticed.
I believe that for greater transparency we should bring the county portion of the tax bill out of the shadows and have a separate bill that is fully articulated for taxpayers.
I encourage you to read the piece and also to educate yourself further on the subject of how county taxes affect your local property tax bill.
Mayor Frank Huttle
Opinion: Shining a light on the ‘invisible’ tax
APRIL 16, 2014, 5:01 PM LAST UPDATED: WEDNESDAY, APRIL 16, 2014, 5:01 PM
BY FRANK HUTTLE III
Frank Huttle III, a Democrat, is mayor of Englewood.
A RECENT ARTICLE (“Bergen County tops NJ in property tax bills,” March 20) in The Record not only highlighted the unfortunate distinction Bergen County now has of being home to the highest average property taxes in New Jersey, but underscores the need for a solution.
In surpassing Essex as the costliest county for homeowners, the average property tax bill in Bergen County – when factoring in municipal, school and county taxes – jumped to $10,642 in 2013, a 1.5 percent increase from the year before.
However, The Record’s story failed to mention that the most sizeable increase came from the county’s portion of the tax levy. This trend – which most property taxpayers are unaware of – has frustrated and perplexed many local officials for years.
For example, by reading the chart included in the story, Englewood would appear to have one of the largest tax increases of any Bergen municipality last year, at an average of $542. Consequently, my phone started ringing of the hook with residents asking, “Mayor, why are you not controlling property taxes? Why did our taxes go up $542?”
This is because the average resident sees one tax bill and thinks the mayor is solely in charge of controlling that bill. However, that is not the case.
Since I became mayor in 2010, I have approached city government with a business attitude by employing best practices and disciplines found in the private sector. Because of this, we have seen no increase in taxes for the last three years while increasing municipal services as well as our surplus, all despite a $2 million decrease in state aid and an increase in funding mandates.
County tax levy
What was lost in The Record’s chart is that we held the municipal property tax levy flat for the last three years in Englewood. Instead, the spike our residents saw in taxes was largely due to a 65 percent increase in the county tax levy.
Perhaps the county executive, Kathleen Donovan, who is effectively the mayor of 70 towns, should take a page from Englewood’s playbook in controlling runaway property taxes?
Essentially, the county tax is the invisible tax that most residents don’t realize is included within the bill they receive from their town. It’s time for the county tax bill to come out of the shadows and into the forefront if we ever hope to get a grip on these perpetual increases.
In order to make county government more accountable to taxpayers, we need full disclosure and transparency. Separating the county tax bill from the municipal bill and providing a greater explanation of what the county tax funds would be a good first start in order to arm residents with the knowledge they need to hold their government accountable.
Additionally, we need to address the unfair burden placed on municipalities when a property owner appeals their tax assessment. If the property owner wins the appeal and is due a refund, the burden of refunding that money falls squarely on the shoulders of the municipality, even though a large portion of what was owed was due to the county and school tax levies.
In 2012, for example, we saw a large spike in appeals and owed roughly $2.4 million in refunds to property owners. Of that $2.4 million, roughly $1.3 million or almost 55 percent was the portion that had originally been owed to the county and school district, and yet the city was left on the hook to refund the entirety of the money to property owners.
We must reform the tax refund system so that the county and school district pay their allocable cost of the refund to properly match the real tax costs. The current law is completely unfair to municipalities and does not foster full disclosure of the real tax costs.
Furthermore, the unpredictability of the county tax levy and the equalized valuation process leaves towns in the lurch at the 11th hour when they are trying to craft the next year’s budget. Much of this can be alleviated through greater cooperation and disclosure so towns can plan more accordingly.
At the end of the day, property taxes will never be controlled until all arms of government take equal responsibility and learn to work together more cooperatively – that includes local, county and state government.
Mayor Frank Huttle