JCGuys wrote:
Another excellent article, thanks!

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The simple method of apportioning county taxes can be distorted by a town giving tax abatements.

The state's PILOT law is terribly designed and gives towns incentives to take advantage of their neighbors in regional school districts, counties, and the state as a whole.

The abuse is enabled by the fact that taxes in regional school districts, counties, and state aid are apportioned by Equalized Valuation, but a property with a tax abatement does not appear as part of a city's official assessment and is therefore "invisible" to the calculation of Equalized Valuation. Since PILOTed properties aren't part of Equalized Valuation, they are "invisible" to the apportionment of taxes for regional school districts, counties, and state aid.

What makes the incentives even stronger is that PILOT payments can be structured so that the municipality gets more money from a property with a PILOT than it would from one under normal taxation. This is because PILOT fees are paid 95% to the municipality and only 5% to the county, with the school system totally cut off.

Montclair has been completely open about how it uses PILOTs as a way of shielding its wealth from Essex County (ie, Newark).

As Montclair's Mayor Robert Jackson explained in 2013, "In a PILOT agreement, 95 percent of the tax revenue comes to the town, not 83 percent. We get more money from that PILOT than we would if they paid taxes."

Montclair's deputy mayor, Robert Russo, chimed in, "That's what I really like about the [PILOT] program. I am not a fan of the county taking money from us. What we're doing is enhancing the township's revenue. No one [in Montclair] is getting hurt."

PILOTing directly benefits a municipality by diverting additional revenue to it (coming at the expense of the county and schools), but it also indirectly benefits a municipality by hiding the ratables from the county. This allows a municipality to hoard its tax base without sharing with the rest of the county.

As annoying as Montclair's PILOTing is and the mayoral bragging about it, Montclair doesn't allow very much new development period, so the overall percentage of Montclair's tax base that is hidden behind PILOTs is small. Even if most of Montclair weren't off-limits to new development, Montclair pays for its school school system with local taxes and if it PILOTed excessively it would be cannibalizing its own school tax base and have a voter rebellion.

Not so for Jersey City. Jersey City should be commended for how accepting it is of new housing, but its schools are paid for by the state and there is no incentive for it not to PILOT virtually everything. Jersey City has thus exploited the PILOT law like no other town in New Jersey to the point where 30% of its valuation is PILOTed. Jersey City's abuse of the PILOT law is so substantial that it was in fact sued by Secaucus, North Bergen, and Bayonne in the late 1990s/early 2000s over not paying for its fair share of county taxes.

I just love that this invalidates Yvonne's arguments about tax abatements. it turns out residents of Jersey City are not losing money to it, we're just screwing over state tax payers with guarantee Abbott funding (for now) and other municipalities in Hudson County that have to bear a larger burden of the county's tax base.

Hoboken and JC really need to lose Abbott status and the other municipalities in Hudson County really need to pressure the tax board to do a reval.

Until then, might as well let the legal pillage continue. Don't hate the player, hate the game. And JC is best at it.

The simple method of apportioning county taxes can be distorted by a town giving tax abatements.

The state's PILOT law is terribly designed and gives towns incentives to take advantage of their neighbors in regional school districts, counties, and the state as a whole.

The abuse is enabled by the fact that taxes in regional school districts, counties, and state aid are apportioned by Equalized Valuation, but a property with a tax abatement does not appear as part of a city's official assessment and is therefore "invisible" to the calculation of Equalized Valuation. Since PILOTed properties aren't part of Equalized Valuation, they are "invisible" to the apportionment of taxes for regional school districts, counties, and state aid.

What makes the incentives even stronger is that PILOT payments can be structured so that the municipality gets more money from a property with a PILOT than it would from one under normal taxation. This is because PILOT fees are paid 95% to the municipality and only 5% to the county, with the school system totally cut off.

Montclair has been completely open about how it uses PILOTs as a way of shielding its wealth from Essex County (ie, Newark).

As Montclair's Mayor Robert Jackson explained in 2013, "In a PILOT agreement, 95 percent of the tax revenue comes to the town, not 83 percent. We get more money from that PILOT than we would if they paid taxes."

Montclair's deputy mayor, Robert Russo, chimed in, "That's what I really like about the [PILOT] program. I am not a fan of the county taking money from us. What we're doing is enhancing the township's revenue. No one [in Montclair] is getting hurt."

PILOTing directly benefits a municipality by diverting additional revenue to it (coming at the expense of the county and schools), but it also indirectly benefits a municipality by hiding the ratables from the county. This allows a municipality to hoard its tax base without sharing with the rest of the county.

As annoying as Montclair's PILOTing is and the mayoral bragging about it, Montclair doesn't allow very much new development period, so the overall percentage of Montclair's tax base that is hidden behind PILOTs is small. Even if most of Montclair weren't off-limits to new development, Montclair pays for its school school system with local taxes and if it PILOTed excessively it would be cannibalizing its own school tax base and have a voter rebellion.

Not so for Jersey City. Jersey City should be commended for how accepting it is of new housing, but its schools are paid for by the state and there is no incentive for it not to PILOT virtually everything. Jersey City has thus exploited the PILOT law like no other town in New Jersey to the point where 30% of its valuation is PILOTed. Jersey City's abuse of the PILOT law is so substantial that it was in fact sued by Secaucus, North Bergen, and Bayonne in the late 1990s/early 2000s over not paying for its fair share of county taxes.

stateaidguy wrote:
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bodhipooh wrote:
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brewster wrote:
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bodhipooh wrote:
BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

How do you figure? If this is going to increase the current rate by 10% of the county portion (50% IIRC) that's .5 x .1 x .02=.001, or 0.1% increase in the overall effective rate. $1000 on your $1m house.

The point I was trying to make is that if we assume our current rate to be 2.2%, and you do the math you just did, the total rate then inches up to 2.3%. That number of 2.2% is a guesstimate. We are all assuming that the current overall valuations for JC are more or less correct. Who is to say that total housing valuation doesn't come in at a lower total than expected, thereby forcing a slightly higher rate?

I'd put money on Jersey City's Equalized Valuation being higher in two years than it is now and therefore the effective tax rate staying low.

The parking lot that HAP Investments just paid $26.5 million for is assessed at only $151,800. (it appears as the Robinhood Plaza, 506 Summit Ave)

That's just one property, but that's a ratio of 174:1.

http://tax1.co.monmouth.nj.us/cgi-bin ... 609605____00004_________M

stateaidguy wrote:
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bodhipooh wrote:
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brewster wrote:
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bodhipooh wrote:
BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

How do you figure? If this is going to increase the current rate by 10% of the county portion (50% IIRC) that's .5 x .1 x .02=.001, or 0.1% increase in the overall effective rate. $1000 on your $1m house.

The point I was trying to make is that if we assume our current rate to be 2.2%, and you do the math you just did, the total rate then inches up to 2.3%. That number of 2.2% is a guesstimate. We are all assuming that the current overall valuations for JC are more or less correct. Who is to say that total housing valuation doesn't come in at a lower total than expected, thereby forcing a slightly higher rate?

I'd put money on Jersey City's Equalized Valuation being higher in two years than it is now and therefore the effective tax rate staying low.

The parking lot that HAP Investments just paid $26.5 million for is assessed at only $151,800. (it appears as the Robinhood Plaza, 506 Summit Ave)

That's just one property, but that's a ratio of 174:1.

http://tax1.co.monmouth.nj.us/cgi-bin ... 609605____00004_________M

bodhipooh wrote:
Quote:

brewster wrote:
Quote:

bodhipooh wrote:
BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

How do you figure? If this is going to increase the current rate by 10% of the county portion (50% IIRC) that's .5 x .1 x .02=.001, or 0.1% increase in the overall effective rate. $1000 on your $1m house.

The point I was trying to make is that if we assume our current rate to be 2.2%, and you do the math you just did, the total rate then inches up to 2.3%. That number of 2.2% is a guesstimate. We are all assuming that the current overall valuations for JC are more or less correct. Who is to say that total housing valuation doesn't come in at a lower total than expected, thereby forcing a slightly higher rate?

brewster wrote:
Quote:

bodhipooh wrote:
BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

How do you figure? If this is going to increase the current rate by 10% of the county portion (50% IIRC) that's .5 x .1 x .02=.001, or 0.1% increase in the overall effective rate. $1000 on your $1m house.

bodhipooh wrote:
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user1111 wrote:
Terrence T. McDonald | The Jersey Journal

Residents of seven Hudson County towns will see increases in their county taxes this year as part of the $540 million county budget approved by freeholders late last month.

The biggest hikes will hit Jersey City residents, whose share of the county tax burden will increase by 10.15 percent over last year. Union City's share will rise by 5.97 percent, while increases in Harrison, Hoboken, North Bergen and Secaucus are about 4 percent each. County taxes in Kearny will increase by 2.6 percent.

More

As taxes in NJ continue to rise, the math starts to favor NYC: better schools, better government services, better mass transit and with taxes here rapidly approaching obscene levels, the total cost of home ownership is starting to become more and more equal.

BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

bodhipooh wrote:
Quote:

user1111 wrote:
Terrence T. McDonald | The Jersey Journal

Residents of seven Hudson County towns will see increases in their county taxes this year as part of the $540 million county budget approved by freeholders late last month.

The biggest hikes will hit Jersey City residents, whose share of the county tax burden will increase by 10.15 percent over last year. Union City's share will rise by 5.97 percent, while increases in Harrison, Hoboken, North Bergen and Secaucus are about 4 percent each. County taxes in Kearny will increase by 2.6 percent.

More

As taxes in NJ continue to rise, the math starts to favor NYC: better schools, better government services, better mass transit and with taxes here rapidly approaching obscene levels, the total cost of home ownership is starting to become more and more equal.

BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

bodhipooh wrote:
BTW, whoever it was that predicted a rate of at least 2.5% (based on conversations with a source) may have been right, after all.

user1111 wrote:
Terrence T. McDonald | The Jersey Journal

Residents of seven Hudson County towns will see increases in their county taxes this year as part of the $540 million county budget approved by freeholders late last month.

The biggest hikes will hit Jersey City residents, whose share of the county tax burden will increase by 10.15 percent over last year. Union City's share will rise by 5.97 percent, while increases in Harrison, Hoboken, North Bergen and Secaucus are about 4 percent each. County taxes in Kearny will increase by 2.6 percent.

More

JSleeze wrote:
This has been up for eight minutes already and no YvonneScreed yet?