Asbury Park 2017 Reassessment Report

Transcription

1 Asbury Park 2017 Reassessment Report

2 Prior Year (2016) Assessment Accuracy Reflection Each October, the NJ Division of Taxation conducts statistical studies which measure the accuracy of current year assessments. These studies could be considered as the assessor s gradebook for that year s assessments and resulting tax distribution. Director s Ratio: While the Director s Ratio is a complex calculation, this measurement is intended to express the typical relationship between assessments and sale prices in a given municipality. Attached is a copy of the Certification of the 2016 Average Ratios for the entire state. Asbury Park is on page 15 of the pdf. Asbury s 2016 Director s Ratio was 91.76% (target was 100%). General Coefficient of Deviation (COD): The General Coefficient of Deviation is widely held as the best indicator in determining proper tax distribution. It s a way to measure how tightly clustered assessments are in relation to the average ratio. A lower coefficient of deviation means more accurate and fair tax distribution. Perfect distribution would be a coefficient of zero. The COD normalizes ratios to show accuracy within a municipality regardless of what the Director s Ratio is in any given year. Attached is a copy of the Coefficients of Deviation- Measurement of Property Assessment Uniformity 2016 Data for the entire state. Asbury is on page 46 of the pdf. Through annual reassessments, Monmouth and Somerset Counties are showing improved coefficients when compared to historical or statewide data. The more homogeneous the properties in municipality are, the lower the coefficient should be. For example, a municipality that is comprised of 90% townhouses would be expected to yield better assessment accuracy when compared to a municipality that is comprised of a complex mix of residential, multifamily and commercial that are highly sensitive to immediate location and condition. From a mass appraisal standpoint, Asbury Park faces serious challenges because the market is so diverse and dynamic. Mass appraisal in Asbury is arguably one of the most difficult environments in the state. Despite these challenges, distribution is on the more accurate side when compared to other (more homogeneous) municipalities throughout NJ. We are also trending to be considerably more accurate than our own historical coefficients from the past. Below is historical data going back to As you can see, tax distribution is significantly more accurate in the annual reassessment model (highlighted). I would guess 2016 was the most accurate year on record ever for Asbury Park but below proves (with certainty) that 2016 was most accurate since at least The median Coefficient of Deviation between 1991 and 2013 was The Coefficient for 2016 was This means that 2016 tax distribution was 2.85 times more accurate than the norm of the past

3 2017 Reassessment Through the 2017 reassessment, changes to global modeling were made to target market value. Adjustments were also made to all individual properties, neighborhoods and submarkets to refine assessment accuracy. The goal is to annually target 100% market value so that the statistical measurements represent better assessment accuracy. Accuracy: The primary driver of a reassessment is recent arms-length market transactions. Statutorily, properties are assessed for what they would have sold for on October 1 st of the pretax year. The 2017 valuation date is October 1 st, Our Supreme Court has held value for purposes of taxation has some measure of permanence which renders it secure against general temporary inflation or deflation. Hull, supra, 16 N.J. Tax at 96 (quoting Hackensack Water Co. v. Division of Tax Appeals, 2 N.J. 157, 163 (1949)). True value must be fairly constant and must be gauged by conditions, not temporary and extraordinary, but by those which over a period of time will be regarded as measurably stable. Ibid. (quoting Berkeley Arms Apartment Corp. v. City of Hackensack, 6 N.J. Tax 260, 286 (Tax 1983)). I broadly interpret this case law to provide a level of assessment stability when considering the rigid October 1 st valuation date. In a reassessment, I measure sale prices from the past two to three years (giving more credibility to the more recent transactions.) The Monmouth County Tax Board has a standardized review process to measure new assessments against sale prices from the current and prior year. Tax Board Standardized review: All 2015/2016 residential usable sales (removing top & bottom 2.5% outliers and properties that had renovations after the sale) Sample Size Weighted Average 99.37% Average 99.85% Standard Deviation 7.13% COV 7.14% Median 99.66% % Ratio Scatter % % % % Ratio Scatter 90.00% 80.00% 70.00% 60.00%

4 Total Change of Net Valuation Taxable: Considering all ratable changes, the net valuation of the city will be increasing by 81M (6.28%). Any property whose assessment is going up less than 6.28%, will pay a lesser proportionate share of the tax levy. Any property whose assessment is going up greater than 6.28%, will pay a greater proportionate share of the tax levy Final Tax List 1,291,621, Preliminary Tax List 1,380,919,400 Ch. 441 Abatements (reduce net valuation) 8,247, Preliminary Net Valuation Taxable 1,372,672,200 Change 81,051,100 % Change 6.28% Residential Impact: Year over year change must be measured in relation to the baseline change of 6.28% Reassessment changes: All residential without added assessments Category of % Change Number of Residential Properties 15% and Over Decrease 5-10% % No Change % % % Residential properties will pay a lesser proportionate share of the tax levy (70%) 978 Residential properties will pay a greater proportionate share of the tax levy (30%) Residential Property Assessment Change % and Over Decrease 5-10% 2-5% No Change % % 15%+ Baseline Change of 6.28%

5 Commercial Impact: Year over year change must be measured in relation to the baseline change of 6.28% Reassessment changes: All commercial properties without added assessments Category of % Change Number of Commercial Properties 15% and Over 6 8 Decrease 5-10% % No Change % % % Commercial properties will pay a lesser proportionate share of the tax levy (64%) 172 Commercial properties will pay a greater proportionate share of the tax levy (36%) Commercial Property Assessment Change % and Over Decrease 5-10% 2-5% No Change % % 15%+ Baseline Change of 6.28%

6 2017 Class Totals (preliminary tax list):