Atlantic City will not have the money to pay for a citywide revaluation during 2013 — a step that’s part of what state fiscal monitors want to see before they agree to exit City Hall, city and state officials said Monday.
For noncasino property owners, the lack of a revaluation means they’ll have to pursue their own relief through the tax courts from the impending 25 percent or greater tax increase caused by the casino-heavy $3 billion drop in the citywide ratable base during 2012.
It also means Mayor Lorenzo Langfordcq might not realize his goal of being free of state oversight by midyear.
New Jersey officials want the same, according to a letter to Langford from state Division of Local Government Services Director Tom Neff.
“(We) look forward to making additional progress toward fiscal stability in 2013 that can result in Atlantic City being removed from supervision,” Neff wrote in the letter.
Langford signed the letter Jan. 18, indicating the city will continue to be supervised under the past year’s terms until the Local Finance Board hearing on Atlantic City’s 2013 budget, which will be introduced next month.
At its hearing, the board will “consider terminating supervision,” Neff said in his letter.
Neff and the board, however, have named just one thing — at the 2012 budget hearing and again in Neff’s letter — they want the city to do in tandem with the state’s Atlantic City liaison Ed Sasdelli: “Explore whether a revaluation or reassessment should be undertaken to provide additional financial stability to the City and its residents.”
That hasn’t happened yet, although City Council passed a resolution May 23, 2012, directing city Tax Assessor Novelette Robinson to look into doing a limited reassessment of properties outside the Tourism District.
“I don’t think the administration has made a decision either way,” Robinson said of the initiative’s status.
Robinson confirmed that she is not currently doing the research that would be required before recommending whether the city should do a revaluation. Robinson then declined further comment.
The need isn’t really in question, though, because nearly 4,000 appeals have been filed annually since the last revaluation in 2008. Still pursuing a lawsuit against the company responsible for that one, the city just doesn’t have the money to hire another firm to do a new revaluation, at least not within the next year, city Revenue & Finance Director Michael Stinson said.
“The last one (cost) $2 million. You can break that cost up over five years, but it’s a significant budgetary impact,” Stinson said. “The recommendation will be, ‘Do it.’ But … I would not expect the budget introduced (next month) to include money for a reval.”
The 2013 budget will be introduced at the next City Council meeting Feb. 6, Stinson said.
Once the city’s new fiscal plan is finalized, the Local Finance Board will vote on it. Last year, that happened in May. But no matter when it occurs, Atlantic City officials also must present a game plan along with the budget to the board for dealing with the resort’s tax base, Stinson said.
Tax-appeal case settlements reached during 2012 decreased citywide property values $3 billion, or nearly 12 percent — the steepest drop since the ratable base decline started in 2009. Since then, the local ratable base has decreased a total of $5 billion.
The largest property devaluations were awarded to casinos. That left noncasino property owners comprising a higher percentage of the ratable base as the city still looks to generate the same amount of tax revenue for local public services.
As a result, noncasino property owners will face a 25 percent increase, even if the city budget stays flat. They can minimize their exposure by appealing their assessments as well. They will not, however, get the retroactive reconsideration afforded casinos, which were credited or refunded to make up for what became past overpayments in light of new, lower property values. To cover those rebates, the city has borrowed nearly $150 million since 2010.
Langford has said his administration is devising a three-part plan to deal with the situation. It likely will address the broader tax law inequities in addition to the more immediate difficulties now facing city residents and small business.
Langford, who did not respond to calls and emails seeking comment, intends to detail the plan at the official kickoff for his third mayoral campaign, said his spokesman Eddie Lax, who wasn’t sure when the official kickoff will happen.
Business Administrator Ron Cash said “policy, not politics” will determine how the administration rolls out the game plan.
He and other officials are looking not only at casino tax appeals, but “everything” —– including an audit of nonprofit tax exempt parcels, for example — that determines the city’s ratable base, Cash said.
“Obviously, we have a lot of planning and research that has to be done going into 2014,” Cash said.
DCA representatives did not respond to questions about whether the agency could help fund — or help find funding within or outside Atlantic City — for a revaluation, reassessment or related initiatives in Atlantic City.
“We’re trying to get it done as soon as possible so it has least amount of impact on taxpayers,” Cash said. “There most likely won’t be a reval in 2013, but we need to make a decision soon what the best time to do it is.”
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