Sharing an open letter and thoughts that I read into the record at the City Council meeting on Oct 7, 2020. I’m publishing it on CivicParent as part of a new area of content related to Jersey City’s increasingly outdated assessed values and the growing need for another revaluation. The last revaluation was in 2017/18.
Dear Mayor Fulop & Members of City Council,
I would like to ask what if any steps are being taken by the mayor’s office, the city tax office, and the city council to pressure-test the need for another property revaluation. It has been two years since Jersey City conducted its last citywide revaluation. The “true”, or market, value of Jersey City’s taxable property is once again growing disconnected from the assessed values; state guidance suggests revaluation may be needed.
Consider the current facts:
In 2018, Jersey City’s tax base was valued at $34,296,469,810.
This month, the NJ Division of the Treasury published its annual tax base numbers for all municipalities in the state and Jersey City’s tax base now has a “true” or estimated market value of $44,232,603,821. However, the 2020 assessed value is only $37,935,554,975.
Revaluation is needed to keep assessed values on par with market values. Jersey City’s taxable real estate is appreciating rapidly, but not necessarily at the same rates throughout the city. This varying pace of appreciation introduces unfairness into the system that can and should be remedied with revaluation.
We can glean insight into this paradigm with two municipal-specific metrics published annually by the state: (1) the equalization ratio, also called “the Director’s ratio” and (2) the coefficient of deviation.
(1) The Equalization Ratio, or Assessed Value / True (Market) Value. In its “Assessor’s Handbook,” NJ Division of Taxation authorities note that
“a Director’s Ratio of 85% or less may denote noncompliance”
and that
“a continual decline of Assessment-Sales Ratios in a district from the 100% level of taxable value established by the County Tax Board shows a lack of assessment maintenance and may indicate a need for reassessment/revaluation.”
Jersey City’s equalization ratio has decreased the past two years from around 101% in 2018 to 85.88% on Oct 1, 2020. With its ratio now hovering at 85%, Jersey City is very close to the possible “noncompliance” threshold established by the state in its Assessor’s Handbook.
2) Coefficient of deviation. The NJ Assessor’s Handbook also notes that “if individual Assessment-Sales Ratios vary widely, a reassessment/revaluation program is probably needed.” The state gauges this variance with the coefficient of deviation, which is a statistical analysis of a group of assessment-to-sales ratios. The Handbook states:
“A higher Coefficient of Deviation indicates a poorer degree of assessment uniformity in a taxing district and a likely need for reassessment/revaluation. A lower Coefficient of Deviation indicates a better degree of assessment uniformity….The current acceptable figure for Coefficients of Deviation is 15%, although some authorities advocate 10% in light of improved assessment practices, computerization, and increased valuations.
On Oct 1, 2020 the state published Jersey City’s coefficient of deviation: 17.80%.
Revaluation is required to systemically recalibrate “who pays what” in property tax across the city. We must use this mechanism to restore fairness into the system when unfairness grows.
I’d like to understand how the city keeps its pulse on this need to revalue and at what point the city will decide that revaluation is needed, given these latest numbers published by the state.
Thank you
