Tax appeals have resulted in substantial ratable declines for Gloucester County in the last six years.
Gloucester County freeholders adopted the 2016 budget last month and the plan's roughly 1.5-cent tax rate increase has been attributed largely to a continued loss in ratables.
The spending plan includes a $161 million tax levy. Homeowners can expect an average $40 increase in their annual tax bills, county officials say.
The tax-rate hike is actually lower than last year's increase of 3.8 cents.
The ratable loss explanation is a familiar theme in recent budgets. Ratables -- the value of all taxable property including retail, commercial and residential -- have declined 16 percent in the last six years in Gloucester County, amounting to about $84 million in lost revenue, explained county administrator Chad Bruner.
Officials are optimistic that the ratable drop is bottoming out thanks to increased development activity in the residential and commercial sectors.
The rise and fall in ratables
After Gloucester County saw ratable increases of more than 16 percent in 2007, nearly 9 percent in 2008 and more than 5 percent in 2009, the decline began. The county saw the largest decreases in ratables -- more than 4 percent each year -- in 2012 and 2013. In the last six years, the amount of taxable property in the county has decreased 16.41 percent, totaling $84 million in lost tax revenue. The decrease in 2015 was 1.09 percent.
(Gloucester County Assessor's Office)
The loss in ratables can be attributed mainly to tax appeals and reassessments.
Factors that drove the increase in appeal activity included the "Great Recession" and plummeting home values, as well as a new pilot program instituted in 2010 in which Gloucester County centralized tax assessments, replacing the municipal-based assessment process.
The reasons for successful tax appeals depend on the municipality.
Appeals by petrochemical companies had the biggest impact in towns along the Delaware River.
Greenwich lost $87 million in commercial value through appeals, explained county assessor Robyn Glocker-Hammond. Paulsboro lost $19 million in residential value and $20 million in commercial value. West Deptford lost $260 million in commercial value, while Westville lost $10 million in commercial value and $17 million in residential.
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Deptford's drop is driven by falling assessments for commercial properties, Glocker-Hammond said. Monroe and Washington Townships saw losses because of the struggling retail sector.
In all, Deptford has lost $115.5 million in commercial value through appeals. Monroe has lost $23 million in commercial value and $200 million in residential value since 2012. Washington Township has lost $9 million in commercial value since 2013, according to county figures.
The biggest tax appeals
Commercial tax appeals have accounted for the largest tax revenue losses since 2012.
Five commercial appeals filed in the last four years have accounted for $12.3 million in lost Gloucester County tax revenue, according to county officials.
They were Sunoco, Paulsboro Refining, Johnson Matthey, Axeon Specialty Products/NuStar Asphalt and Almonesson Associates.
The gallery above describes the details of these appeals, including the loss in tax revenue for each.
Breaking the fall
To counteract the loss in tax revenue over the years, the county has pursued several cost-saving initiatives, including closing its jail and signing agreements to house prisoners in neighboring counties. The county has also reduced its payroll by 344 positions. Increased use of surplus has helped, too. The county used $6.7 million from surplus in this year's budget and $11.8 million in 2015.
Overall, tax appeal filings in Gloucester County have dropped by about 27 percent since 2012. In 2012, the county saw 3,127 appeal filings and 843 for 2016.
County officials credit that drop to the county taking over tax assessing duties in 2010. In the past, municipal revaluations hadn't been done for so long in some towns that equalization ratios -- the difference between assessed value and true market value -- were significantly out of balance.
The new revaluations drove a spike in tax appeals.
"The 3,127 appeals filed in 2012 was a result of 16 towns having gone through a reassessment from 2010 to 2012," Glocker-Hammond said. "In 2013 we saw 3,262 appeals filed as a result of the remaining eight towns having been reassessed for that year."
The overall decrease in appeals since then can be attributed largely to the county-based tax assessing system bringing property values more in line with actual value, she said.
An improving economy may have helped reduce appeals, too.
"The economy has improved in certain sectors but more of what you are seeing is as a result of county based assessing more accurately reflecting assessments based on true market value," Glocker-Hammond said.
Matt Gray may be reached at mgray@njadvancemedia.com. Follow him on Twitter @MattGraySJT. Find the South Jersey Times on Facebook.