“We saw this revolution coming as the Great Recession crushed the real estate market, and some communities delayed property reassessments by several years and in some cases decades,” Bucco said. “The reported result of municipal tax bases decreasing by $3.8 billion last year is staggering. Local budget nightmares are indeed caused by a rising number of appeals, of which more than 52 percent were reportedly settled last year.
To mitigate the burden on municipalities, especially those that have borrowed or bonded to pay off tax appeal losses, Bucco is again pushing a bill to require fire districts, school districts, county governments to also pay their fair share of appeal refunds and settlements. Bucco is re-introducing last session’s S-2904, which will accompany this session’s Assembly version A-1503.
“Each local entity will concede or collect their fair percentage of an appeal outcome, based on how much they receive in property taxes,” Bucco explained. “For example, a school district that spends 70 percent of a property tax dollar will be accountable for 70 percent of an appeal refund or settlement in that community.”
Under current law, only the county shares in this burden with municipalities through the county tax equalization process. Senator Bucco’s bill would require municipal tax collectors to deduct the applicable pro-rata share of property tax refunds from the amounts to be paid in a subsequent tax year to the county, school district and fire district.
“This legislation aims to ease a major burden on municipalities, as many property owners continue to fight for assessments that are in line with the current market,” Bucco concluded. “I urge the majority party to immediately post this legislation for committee hearings in both houses.”