| Author |
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Lisat
| | Posted on Friday, January 26, 2001 - 9:58 am: |     |
Why isn't it possible to arrive at creative (and legal) solutions for dealing with this revaluation challenge? To tax people on paper profits will force many senior citizens, families and others to leave the town they love. I've already heard some seniors making plans to move. In some cases, this will displace single moms and their children who are living with their elderly parents.
Why not impose a flip tax like cooperatives do? Perhaps citizens would opt into a flip tax program, which would reduce their proposed yearly taxes but tax them heavily on any profits they make when the property sells. This is a good source of income to cooperatives in the city. And a flip tax would encourage and enable people to stay.
In addition, why not delay certification of the new valuation for 1 year so the experts can provide accurate assessments, the process can be opened, and the citizens can develop confidence in the process and the town's leadership? To circumvent lawsuits from homeowners expecting a tax decrease, why not have any 2001 tax increase or decrease be retroactive? In that way, homeowners expecting a decrease would receive what they deserve albeit delayed.
Not everyone will have the money, time and wherewithal to do the research on sales, hire a new appraiser and meet with the town assessor to ensure they are paying their fair share.
Just one example: a neighbor in the 'hit' area is elderly, had a stroke years ago, consequently has diminished faculites, and is living in a gigantic, tumbledown house (read that: overassessed) and may not have a relative or friend to fight the battle with him. If this revaluation is flawed or unfair in any way, the people whom it will harm the most are those who can deal with the system least effectively.
Fairness cannot be rushed. It is most important that this process be fair, accurate and compassionate. It will take great heart and wisdom on the part of the TC to develop solutions that unify this town and do the least harm to its citizens. |
Joy
| | Posted on Friday, January 26, 2001 - 1:35 pm: | |
I disagree with the flip tax idea. Having lived in a co-op in the City - I hated the idea that I had to 'pay' to leave.
Right now my parents, who are selling their house in Yonkers, are facing a 'flip tax'. They are elderly and really can't afford it. And, in Yonkers, it's really not too popular - it's refered to as the 'hostage tax'. |
Townie
| | Posted on Friday, January 26, 2001 - 1:39 pm: | |
Dear Lisat,
I, too, want to do what can legally be done to mitigate the impact on those with diminished capacity and those without the ability to pay. New Jersey law may offer some relief to everybody in the property tax rebate, I don't know. But great heart and wisdom also requires seeing and talking about all the people who will be hurt quite badly if the implementation of the new assessments is delayed. Some residents of Maplewood will be overpaying by as much as $2,000 per year. Can anybody really look them in the eye and say: We'll overtax you this year and pay you back next year, regardless of your personal circumstances this year?
For some Maplewood residents, the new assessments may mean they can STAY when last year they thought they might have to leave Maplewood forever. They, too, might have just had a stroke and need money to pay a nurse. They too have their lives and hopes here. $2000 is a lot of money to ask people to pay -- why? I know people are angry, but still. What's really fair?
Who knows how things are house by house throughout Maplewood, but I can't help but assert that delaying the revaluation would probably hurt more Maplewood homeowners and neighbors than it would help. There are just plain more people scheduled to be paying lower taxes than higher. And many of the homeowners who will be paying higher taxes -- not all, but most -- can afford the increase, especially when you remember that property taxes are deductible from income taxes. Obviously seniors have a special problem, but seniors who have been overpaying have a special problem too.
If the revaluation is delayed, some people may get to stay another year, but then what? Three-story houses near the train in Maplewood will never again be assessed at between $50,000 and $100,000 because that is nowhere near reality. The re-assessment just completed reflects reality. The new taxes will one day have to be put into effect. I'm sure delay could result in many untold hardships for many town residents, who are owed a fair shake. They, too, want to live here, invest here and build a community. They're not being heartless.
As we all know, I hope, by now, the real villain here is using property taxes to pay for services instead of a progressive income tax, which would protect people with limited means from tax gouging. What Trenton has clung to and the voters of New Jersey voted themselves is a heartless system.
Sorry to sound to adamant about this, but I am getting increasingly concerned that my many Maplewood neighbors and friends who live in modest houses and scrimp and save are being left out of the picture. They are the real Maplewood, too. I'm sure your compassion extends to them, Lisat. I don't believe otherwise. I just want to keep taking the occasion on these boards to bring them vivdly into the picture.
When you speak of needing a year for experts to produce an accurate revaluation so we can all have confidence, don't forget that I and most everyone in Maplewood got accurate assessments, we are confident they aren't going to change and leadership from the TC would be not caving to pressure to re-do everything at extra expense with no difference in results. And if it's true that not everybody in town has the time, the money and the wherewithal for an appeal, it's equally true not everybody has the wherewithal to delay getting the tax relief that are now patently owed. To have to engage in a political fight to get it is not going to bring this town together.
If people have a problem with their assessment, they should appeal it. If they know of someone who needs help appealing, they should help, and I would support the town spending money to facilitate any resident of diminished capacity getting help with their appeal. But the revaluation is largely correct. Delaying or re-doing will only hurt many residents of Maplewood while bringing no concrete benefit to the minority that is complaining.
Again, sorry if this sounds rude. I really don't mean it to. You are right to be compassionate and to put compassion first. The law is not on your side, but you are right to feel that way. A progressive income tax is more in tune with people's needs.
I don't think I understand a flip tax, Lisat. Who pays the taxes on an ongoing basis? It looks like if I take the option not to pay until I sell, but then plan to live here for the rest of my life -- who is paying for services during those 40 years? Who carries the biggest load? |
Eliz
| | Posted on Friday, January 26, 2001 - 2:31 pm: | |
I completely disagree with a flip tax. It may sound great now when there are some people making big profits but what about when the market is down ? What about people who's houses didn't increase in value? Where would they get the money if the need to sell?
I also lived in a co-op - fortunately it was small enough that it was a true "co-operative" and we chose not to impose a flip tax. |
Lisat
| | Posted on Friday, January 26, 2001 - 4:40 pm: | |
A flip tax doesn't take the place of property taxes, it can be structured in order to reduce a homeowners' yearly taxes. And it doesn't have to be a flat tax, e.g., $5,000, it can be a percentage of profit. Therefore, if a homeowner doesn't make a profit, he/she pays no flip tax. If a homeowner sells and makes $500,000 profit, he/she pays whatever the percentage has been agreed upon. Also, it would not be imposed, it could be a program that homeowners voluntarily opt into.
Obviously, the downside is that the town doesn't know exactly how much it'll receive every year in taxes. Cooperatives have probably found that there is a way (although imprecise) of projecting over time how many units will sell in a year. Many people know much more about all this than I do.
I'm not in love with flip taxes and I'm not convinced they're the answer (alone or in conjuntion with other solutions) but I'm trying to encourage some brainstorming here.
And townie, I appreciate your considered opinion but I'm not certain that you're correct about most people who are getting hit the hardest being able to afford it. Almost all the people I know bought houses they could afford 3 or more years ago when they were in the 200 K's. Just because someone else can afford to pay twice as much for these houses doesn't mean our income has increased.
Any other possibilities for a win/win solution?
Also, is the manner in which they assessed commercial property (revenue generation) the standard method? They relied on owners giving them the numbers for expenses and income. Many business people I know know how to make those numbers change. Is the revenue method the method that generates the most taxes or the least? Does anyone know? |
Townie
| | Posted on Friday, January 26, 2001 - 5:55 pm: | |
Dear Lisat,
I appreciate the correction. It looks like no one as yet knows how many people can or can't afford tax increases on a townwide basis. The miserable situation is that property taxes completely ignore affordability. They are based on an estimate of what someone else would pay for a house irrespective of whether the present owner has those means or wants to sell, as you pointed out. The phantom buyer sets the price; the real owner must pay the tax to keep the house. My only point was that denying tax equity to other town residents in the form of a delay shouldn't be done without first establishing that all homeowners can afford a delay. |
Jennie
| | Posted on Saturday, January 27, 2001 - 1:43 pm: | |
Here's another angle on the fairness issue: if lower taxes mean higher purchase prices and higher taxes mean lower purchase prices, then those overpaying have underpaid on their homes (a post reval windfall?) and those underpaying paid too much for their homes (especially newer residents). And those moving from one side of Maplewood to the other were underpaid on the selling end and overpaid on the buying end. I think that's why the "continuing to overpay" injustice is less compelling. Those who are overpaying bought their homes based on the current assessment--in effect agreed to the tax level as "worth it" together with the purchase price (which was lower than it would have been had the taxes been lower). A big bump up after the purchase price has been negotiated is like changing the rules in the middle of the game (and being penalized because your neighbor left town with buckets of money). Although theoretically everyone should have known this could occur, no one actually did know it and it was never factored into purchase prices (or the purchase price would have been lower)--hence more of a burden to the underpayers. |
Nakaille
| | Posted on Saturday, January 27, 2001 - 10:03 pm: | |
That's not how the property tax rules are written, Jennie. The rules say you pay based on the value of your home and property. The disproportionate taxes are not the "reason" for the higher or lower purchase prices. Location, bidding wars, perceptions of neighborhoods as desirable/undesirable, location, (and did I mention location) are some of the reasons that similar seeming homes sell for vastly different prices. Now, those overpaying end up putting money into taxes that should have gone into home improvements to increase the value of their homes. What we could have done with the 10 to 15K we overpaid in the past 10 years! My home would be worth much closer to its mid-Maplewood or west side of Maplewood counterparts and we wouldn't be having any of this discussion! My home's value would have increased a heck of a lot more than 29%! And now, maybe it can. Because that's what I intend to do with my slight decrease. Put it back into my house! Make it nice like yours (I'm guessing you've been able to make or keep yours nice.  ) So next time this comes around, I'll get bumped up in taxes but it will be fair according to the rules.
Bacata |
Townie
| | Posted on Saturday, January 27, 2001 - 11:32 pm: | |
Jennie,
This is going to sound weird, but you can't really "overpay" or "underpay" for a home. A home is only worth whatever someone is willing to pay for it. If it becomes known that child molesters live on your street or your backyard had landfill from a toxic waste dump, your home is worth nothing. Markets aren't about "real" value. Markets are about desire, translated into dollars.
Fairness isn't an issue in taxation. There is no law that says taxes have to be fair. Governments can write the laws anyway they want to -- income tax, sales tax, property tax, estate tax, flat. Politics is about who gets to write the tax laws. The only requirement is that, once the law is written, it has to be followed according to the letter of the law, or else someone can sue.
New Jersey state law requires that property taxes be based on an assessment of the market value of the home. It has nothing to do with who bought it when for what price and under what assumptions -- as Maplewood residents are now discovering.
The only way to change the hardships that the present tax situation in New Jersey creates is to change the law, and that is unlikely to happen anytime soon. In the meantime, raising the value of homes in depressed areas would also help spread around the tax burden. Also, doing revaluations in a more timely manner would obviously be better for anyone. But whatever the law is, the TC has to follow it. |
Bobk
| | Posted on Sunday, January 28, 2001 - 7:31 am: | |
This problem goes back to the 1981 Reval. At that time the Township made no bones that values were based on the property, not the location under the theroy that all Maplewoodians enjoy the same level of service. This got through whatever review is done by the County and State tax boards.
I went through some back issues of the News Record for 1981 at the library. I didn't find any stories about the Reval, but I did find a lot of RE ads. Interstingly, houses in the Jefferson area were listed for about twice what houses in the Tuscan and Clinton areas were listed for. The taxes didn't reflect this. I make no claims that I made an exhaustive, statically sound analysis, but I saw what I saw.
After attending the TC meeting on Tuesday I was moved by some of the speakers, especialy from Orchard Park and Hillcrest (Maplewood's only gated community) so I took a drive. From the speakers I kind of expected to find burned out houses, boarded up houses, poor maintenance, a For Sale sign on every other lawn, etc. This wasn't the case. I saw nicely maintained homes, some For Sale signs and a couple of houses undergoing extensive renovation. Basically these areas seem to offer decent housing and affordable prices. These areas should be an asset to the community.
Yes, the Reval is justified. Hopefully lower taxes will drive up prices in the overtaxed areas. However, I have two caveats. One, there is a "Site Value" to living in a community like Maplewood. We have decent municipal services. Dial 911 and the police are there in a couple of minutes, no matter where you live in town. We have a school system with major problems, but a system that sends 77% of its graduates to four year colleges and most of the rest to some former of further education. There is a value to this.
Second, prices on the borders with Newark and Irvington are not going to go up dramatically, no matter how low the taxes simply because they are on the bordees mentioned above. Unfair, yes. Racist, yes. True, yes. |
Townie
| | Posted on Sunday, January 28, 2001 - 10:52 am: | |
Bobk,
Last night my spouse and I also drove around some of the easternmost streets of Maplewood on our way back from dropping a friend off at the airport. It was dark, but still we saw lovely homes on many streets, including the Hilton neighborhoods, although most of the homes there are not the kind of storybook colonials and old-fashioned homes I identify most often with Maplewood.
What you reported about the 1981 real estate ads is helpful information. The inequity is historic. Also, I now understand why I hear some people today arguing that it's only "fair" that higher taxes should remain in place in the eastern parts of Maplewood even though home values declined. I guess some longtime residents still think in terms of the "same level of service all over town" notion.
Another interesting thing is that if you listen to new residents, one of the reasons they most often give for moving to Maplewood is "diversity," and this is just as true in the hills above the village as anywhere else in town. And some of those people even participated in the bidding wars to buy in Maplewood because it meant so much to them NOT to be living in an all-white suburb. I think this is especially true of people moving from New York City to the suburbs for the first time. The thing they dread most is feeling isolated in some homogenous suburb with neighbors with a racist mindset.
So in addition to all the things you mentioned, we have (along with S.O. and Montclair) this interesting "site" value. At the same time, we are living in a more largely racist society, where largely black cities and towns are abandoned, distilling civic problems, so buying a house bordering struggling communities makes people nervous about the investment they are making. They'd rather buy in neighborhoods where home values are appreciating the most. |
Townie
| | Posted on Sunday, January 28, 2001 - 11:18 am: | |
Lisat,
Some friends and I have been discussing how home equity loans could enable many Maplewood seniors to stay in their homes, since so many of them have so much equity in their houses. They can borrow to cover the jump in taxes (especially now that their houses have been assessed as being worth so much). It means their kids or relatives won't inherit the windfall of rising Maplewood prices, but that hardly matters, I think. |
Bshears
| | Posted on Sunday, January 28, 2001 - 11:20 am: | |
As someone who resides contentedly near a border Bobk, I don't agree with it being racist at all. People who have the money, no matter what race they are, are going to buy the bigger house with the bigger property in the more attractive neighborhood. Because this is America and they can!
In my opinion, THAT is what angers some people so much! So they cloak their anger in the "racist" word and throw it around. I don't think there is a person in this town(or anywhere) who would turn down that bigger, beautiful home and yard if given the money and the chance, myself included. I mean, who couldn't use more bedrooms, bathrooms, and space?
If people don't like the way the system works, they should leave the country because it's like this everywhere you go! And that is what "The Greatest Generation" fought for.
God Bless America! |
Harold
| | Posted on Sunday, January 28, 2001 - 11:29 am: | |
Townie, are you kidding? "The reasons they most often give for moving to Maplewood is "diversity" and this is true in the hills above the Village as anywhere else in town". " They participated in bidding wars to buy in Maplewood because it meant so much to them not to be living in an all-white suburb". So why did they move up the hill to an all-white neighborhood???
I don't hear any of that at all. All I hear constantly is "damn the C.C.R!' and 'I hope THEY stay on THAT SIDE of town". Is there some reason you post all these p.c. slogans on the board?....because you do NOT say this in public.
Also, property values have never risen on the areas bordering Newark, Irvington or Vauxhall/Union. |
Bobk
| | Posted on Sunday, January 28, 2001 - 11:52 am: | |
Knew I probably should not have used the "R" word.
By racist I meant that people worry about "crime" and Newark and Irvington. This is true no matter what your circumstances are or your race for that matter.
I am not against a more equitable distribution of the tax burden. The current approach is to be honest obscene. I just am stating if you want the services, you got to pay for them and some of that burden has to be carried by everyone. |
Townie
| | Posted on Sunday, January 28, 2001 - 12:20 pm: | |
Harold,
My neighborhood, in the hills, isn't all white. I'm relating conversations I've had with people who recently moved into the neighborhood, and the reason they give for moving to Maplewood is racial diversity. I heard the same things when I first moved to Maplewood at the town meeting that welcomes new residents.
I moved into the hills to be close to the reservation. I moved into Maplewood instead of Millburn because Maplewood not only had racial diversity, Maplewood residents who had been interviewed in newspaper articles I read talked about how people in the town valued racial diversity.
I also hear racist remarks in my neighborhood, but mostly they come from long time residents.
I post on these boards anonymously so I can express my thoughts honestly without having to face a lot of irrational hostility from people who can't carry on a civil conversation. |
Townie
| | Posted on Sunday, January 28, 2001 - 12:35 pm: | |
Bobk,
I'm not sure I undestand your point. Do you mean that taxes should reflect a kind of "user" fee all over town, regardless of house price? Or that because of racism, some large nice houses in Maplewood are never looked at by some house shoppers, which means there is less demand for them, and they tend to fetch lower prices, but the town assessment should overlook that and recognize these are valuable houses nonetheless and tax accordingly?
I think houses all over Maplewood and South Orange are cheaper than similar houses for sale in the New York City area (along with Montclair) because other communities are seen as "whiter" and their schools are "whiter." It's the same kind of real estate market in Westchester. The racially mixed communities of New Rochelle, Mount Vernon and certain parts of Yonkers have fabulous houses that would sell in the millions if moved into Bronxville or Larchmont. Likewise, if you took the homes in Roosevelt Park and moved them out of Maplewood to Short Hills and Summit, they would sell for hundreds of thousands more. In the minds of people outside of Maplewood and South Orange, Wyoming Avenue is "the border." |
Nicky
| | Posted on Sunday, January 28, 2001 - 2:35 pm: | |
I've lived on the "hill" for more than 10 years. I'm Hispanic and my neighbors are a wonderful mix of different cultures and lifestyles. This may not exist on every street around here but it is certainly more diverse than you think.
If those remarks are all you ever hear...I would suggest a new circle of friends. |
Nicky
| | Posted on Sunday, January 28, 2001 - 2:36 pm: | |
Harold:
I've lived on the "hill" for more than 10 years. I'm Hispanic and my neighbors are a wonderful mix of different cultures and lifestyles. This may not exist on every street around here but it is certainly more diverse than you think.
If those remarks are all you ever hear...I would suggest a new circle of friends. |
Jennie
| | Posted on Sunday, January 28, 2001 - 3:45 pm: | |
Bacata: You're right. I wasn't explaining how the tax laws are written, just reflecting on fairness (no one ever accused the tax laws of being fair!). I think my point was that you may not have had the $15,000 that you overpaid if the tax level were lower because you would have paid more in your purchase price. And you're right-- I do have a nice house, but that's not related to taxes. I have only recently stopped overpaying and started underpaying! Heck, I had a nice house when I was an overpayer. It seems other variables are responsible for the niceness of my house. :-) |
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