Fulop’s Spokesperson Wrong on Property Tax Appeals Logic

Steven Fulop’s press person, Jennifer Morrill, made an egregious error on the record this month when she characterized tax appeals as not being based on sales prices.  Tax appeals are, in fact, based explicitly on recent comparable sales prices.

Ms. Morrill’s statement was in response to a story about a local resident, April Kuzas, who recently filed a tax appeal to force Mayor Fulop’s property assessment value to be increased.  Ms. Kuzas’ argument is based on a widely reported fact: Mayor Fulop is severely under-taxed.  His under-taxation is due primarily to Jersey City’s severely outdated assessment values (the last citywide revaluation was 1988).  In 2013, Mayor Fulop unilaterally cancelled a citywide Revaluation that had been initiated by the prior administration.  Kuzas is asserting that not only is the mayor under-taxed, but he’s continuing to benefit from that under-taxation in part due to his own decision to cancel the Reval in 2013.

Kuzas’ action forced the city to respond to the issue of Fulop’s under-taxation. Morrill’s statement included the following:

“tax appeal law doesn’t allow for this sort of appeal based on sale prices. Appeals are based on assessments…”

But Morrill’s statement is grossly incorrect. Tax appeals are based explicitly on recent, comparable sales prices. Appeals are not based on neighbors’ assessments.  The Hudson County Board of Taxation emphasizes this reliance on sales prices in its Tax Appeal Filing Packet:

Recent sales are important because, per NJ property law, assessments are supposed to be based on true, or market, value.  Recent comparable sales are, therefore, viewed as the most reasonable proxy for estimating market value. Fulop’s case is particularly straightforward since he purchased fairly recently; the sale price serves as a reasonable proxy for his market value.

Fulop’s under-taxation ferreted out a second error in Ms. Morrill’s statement. Morrill also stated:

“…the mayor is exactly in line with others. There is no favorable treatment.”

The public data tells a different story.  These are the facts around Mayor Fulop’s property; this is all public record and it’s been widely reported:

  • Fulop bought a home in the Heights in July 2015 for $845,000.
  • The property has an assessed value of $104,000
  • If we divide his assessment value by his sale price, we see that Fulop has an “assessment-sales ratio” of about 12% ($104K / $845K = 12%).

Jersey City’s 2016 equalization ratio – which is the citywide average of the “assessment-sales ratios” for all homes in the city – is 23.66%.  Properties with assessment-sales ratios below this average are generally considered under-taxed; since Fulop’s home is far below this average – at 12% – he’s clearly under-taxed.  Therefore, Fulop’s property is not “exactly in line” with the citywide average as Morrill stated. We can reasonably conclude that the mayor’s under-taxation, in conjunction with his authority to unilaterally cancel the previous Revaluation in 2013 with no objection from the City Council, as “favorable treatment.”

Our city is undergoing its first mass revaluation in nearly 30 years – we need a mayor’s office that both understands local property tax laws and communicates clearly and honestly to the public about those laws.

4 Comments

  1. Excellent! As usual your blogs are always educational. Sorry you can’t represent us on the council. I hope one day you’ll represent us.

  2. Just plain misleading because houses in his area are taxed very much like his. I would ask why with all the former owners improvements it was not bumped up. They did not add, as far as I recall, any extra beds bath or square footage. , so perhaps it was all repairs. Anyway, of couse, it SHOULD be taxed fairly along with the others. This is ignorant at best and intellectual dishonesty. I have seen 2 families paying 3000 in the Heights. He will undoubtedly pay more when everything is revalue, providing that the budget requires it. Tax rates can be cut because of the total revenue. If you use facts to support an argument, you must still weigh all the facts, not just those you like. My house was valued at 125,000 after repairs. By the way, I appealed because I bought it for $75000!. It was over valued. I sold it for 310,000. It’s now worth more. That’s many peoples story. It’s the assessments that are glaringly off. Is he had bought my house you would say the same thing.
    Why not research ways to make taxes more affordable for long time residents after the Assessment? Look at Philadelphia. Why does Newark have a payroll tax, and JC doesn’t? Freeze “homestead” houses.

    • “Why not research ways to make taxes more affordable for long time residents after the Assessment? Look at Philadelphia. Why does Newark have a payroll tax, and JC doesn’t? Freeze “homestead” houses.”
      –The system of property taxation in NJ is quantitatively somewhat straightforward. Divide up the tax levy using your the tax base (i.e. each property value) as an apportionment factor. What distorts this relatively straightforward concept is elected leadership that allows assessment values to grow so outdated over time, that they become distorted from reality of market value. In 2017, JC’s equalization ratio is 23.66%; there has been a quantitative basis for revaluing Jersey City’s tax base since 2000, when the equalization ratio last dipped below 85%. We can quantify, in hindsight, the unfolding dysfunction.

      Moving to a new system: not only is this not likely (we’ve had the same system in place since our inception as a state, effectively), but it also doesn’t address root causes of current situation, i.e. elected leadership not leading with any sense of transparency or responsibility (vis a vis their charge with keeping assessments in line with market values), but the public, also, has not held those elected leadership to account.

      Property owners in Greenville have been overpaying for years. So, while I sympathize with other areas of the city who will see taxes go up, we should also acknowledge that this reckoning of taxes righting themselves has been a long time coming.

Leave a Reply

Your email address will not be published. Required fields are marked *