ATLANTIC CITY – An economic committee convened by State Sen. Chris Brown concluded there is no need for Atlantic County to enter into a countywide tax assessment program if the state bolsters the city’s tax assessor’s office and cuts down on the number of appeals.
The idea of bolstering the city’s tax assessor’s office is also supported by Jim Johnson, appointed to oversee the transition from state control to local control.
In a report on the economic future of Atlantic City under the takeover, Johnson said one key to avoiding another fiscal crisis will be to properly assess the casinos.
“A key factor in the municipal fiscal crisis was the fact that tax assessments of casino properties had been delayed, in some cases for decades, and appeals were taken when the market was depressed,” Johnson said in the report. “Had the capacity of the Tax Assessor been stronger and 23 assessments managed in an effective way, the fiscal crisis could have been either mitigated or avoided.”
Fixing the high number of property tax appeals in Atlantic County has been a hot discussion among officials for years, and it became a topic of the committee because the county has had to pay tens of millions of dollars in refunds since 2010.
The committee was convened shortly after Brown took office earlier this year.
In 2017, Atlantic City had 5,157 tax appeals. The next closest town was Egg Harbor Township with 987 tax appeals, according to public records.
The last time Atlantic City conducted a revaluation was in 2008, according to the Division of Community Affairs.
Right now, the Atlantic City Tax Assessor’s Office has three employees: the assessor, who must value properties and perform administrative duties, and two clerical staff members, Brown said. This office is responsible for $2.9 billion in ratables which does not include the casinos, which are currently paying fixed sums in lieu of property taxes.
“One has to question how well a three- or four-person office can effectively handle over 5,000 tax appeals,” Brown said. “You also have to ask, ‘Could the city have avoided 5,000 tax appeals by making a better effort to fairly and accurately assess properties?’”
Lisa Ryan, a spokeswoman for the DCA which works with Johnson, said the state is considering the proposal to bolster the assessor’s office.
However, Assemblyman Vince Mazzeo, D-Atlantic, supports a plan that would eliminate the local assessors and create a countywide system that would run through a chief assessor and his or her deputy assessors.
This plan, which Mazzeo has introduced legislation for, would mirror the model in Gloucester County, which has 20 full-time assessors.
“If we’re serious about property taxes, we have to do things differently,” Mazzeo said Monday. “Just bolstering the Atlantic City Assessor’s Office won’t fix the whole Atlantic County problem. Shared services and consolidation is the way to go here.”
But other officials and several mayors in Atlantic County are skeptical of transitioning to a countywide system.
Some towns are near 100 percent of equalized value with property taxes and say they don’t need the countywide system, while others say they like their current assessor and don’t want to lose them.
“We keep up on this. Why should we be punished?” Longport Mayor Nick Russo asked, adding the town pays its part-time assessor $13,000 a year. “Our system is not broken.”
Several freeholders, like director Frank Formica, have pointed to a legislative statement that said the plan would cost $11 million to set up.
An official from Gloucester County said the county still contracts out to do property tax revaluations, which Atlantic County officials have openly questioned because Gloucester pays for 20 full-time assessors.
Mazzeo said he is currently working on getting a funding source from the state to reimburse the county for its set-up cost under his plan. Gloucester County was reimbursed nearly 10 years ago when it transitioned to a countywide system.
Regardless, Atlantic City’s ratable base has a direct impact on the Atlantic County budget and its tax rate. Moreover, the Atlantic City ratable base is the largest in Atlantic County and continues to be one of the economic drivers of the region, according to the report by Johnson.
The city spends $700,000 on the assessor’s office, according to its budget, but will spend over $1 million for tax appeal refunds this year.
Since 2010, the county has had to refund over $60 million to Atlantic City because of property tax appeals, according to previous press reports.
The committee believes taxpayer money is better spent on properly staffing the tax assessor’s office in Atlantic City and recommended the city hire a residential valuator at $75,000, a commercial valuator at $85,000 and a field person to perform on-site inspections for $45,000.
“The committee felt if we are serious about lowering property taxes, instead of paying $11 million in the first year and $1.5 million every year thereafter under the Mazzeo plan, the city could save property taxpayers $12.3 million by simply hiring additional staff for $200,000.”