NORTHFIELD — A county freeholder subcommittee is seeking ways to help Atlantic City property owners deal with a surprise increase of 45 cents in the tax rate — from $3.53 to $3.98 per $100 valuation.
Freeholder Ernest Coursey, a Democrat who represents Atlantic City and Pleasantville, said he and other budget subcommittee members spoke to county Administrator Jerry DelRosso on Monday.
They discussed the possibility of asking the state and city if the tax increase can be backloaded onto third and fourth quarter payments, so people will have more time to come up with the extra money.
"I don't want to see neighborhood by neighborhood folks walking away from their homes," Coursey said, because they cannot pay their taxes.
The average resort home, valued at $150,000, will pay a tax bill of $5,850 this year. That's up $676.50 from last year, according to the Atlantic County Board of Taxation.
The city is already faced with hundreds of vacant homes, many of which were abandoned by owners after being damaged by Hurricane Sandy, he said.
About 25 cents of the increase ($373.50) is for county taxes, even though the amount to be raised from city residents decreased by about $1.5 million this year; and 20 cents ($297) for school taxes. The city tax rate went up only slightly, from $1.831 to $1.835 ($6).
City property owners must pay the county more because for the first time in 11 years they don't have big county tax refunds — averaging $7.2 million a year — to offset their share of county taxes.
Last year the county billed the city $13 million, but it only had to pay about $6 million because it had a $7.1 million refund credit. This year the county billed the city $11.8 million, but the city has to actually pay $11.5 million because its refund credit is only $300,000.
The refunds were mostly related to successful tax appeals by casinos, which stopped once the payment in lieu of taxes bill for casinos became law in 2017.
School taxes are going up because of a loss of property value, said Atlantic County Tax Administrator Margaret M. Schott.
In 2010, the city had more than $20 billion in property value, according to state data. In 2016, when the state assumed fiscal oversight of Atlantic City, that base had shrunk to $6.5 billion. Last year, the city had less than $2.9 billion in property value, after the casinos were removed from the ratable base with the start of the payment in lieu of taxes program in 2017.
That figure is down to $2.5 billion for Atlantic City in 2019, with Ocean and Hard Rock casinos joining the PILOT, and with successful noncasino tax appeals lowering values.
A spokesperson for the state Department of Community Affairs, which oversees the city’s finances, has said it is calling for a joint task force to coordinate and reduce taxes. It is inviting Atlantic County Executive Dennis Levinson, New Jersey Department of Education Commissioner Lamont Repollet and the Atlantic City Board of Education to join DCA and city elected officials in the effort.
Levinson said Monday the state should provide funding to help taxpayers with the surprise bills, since it has had oversight of the city finances since 2010 and knew the increase was coming but did nothing to prepare residents.
"We’re looking at (an increase of) $5.4 million. If they could find $6 million for a stupid art park with half a pirate ship and a bunch of upside down words; and they can find $11 million to move the Board of Education and $15 million for Miss America (over the years), why can't they find $5 million for relief for taxpayers?" said Levinson. "They just have to get their priorities together."
Levinson said he was disturbed the state has not stood up to explain the situation to property owners.
"Now it over a week since bills went out. They've left it up to county to explain it," Levinson said. "We are still waiting for the state to come forward and say, 'Don’t blame Atlantic County for this.' When are they going to stand up and say this is not the county’s fault?"