WHY THE TAX INCREASE IN 2010?
The following information was provided to the HCTA by Commissioner Judith Gerkins. If you are in need of further explaination, please contact Ocean County Board of Taxation at 732-929-2008.
Property Values and Taxes
Although you may have a tax increase, the Borough’s 2010 budget was reduced by $72,000, so there is not any more money being spent. A reassessment was done in 2009 for 2010 which reduced the ratable base by $145 million dollars. This basically means that the value of the whole town or the total property assessment has decreased. In 2009 the total property value for Harvey Cedars was $1,417,349,400.00 and in 2010 it is $1,271,480,100.00.
Individual property taxes are calculated by multiplying your assessed value by the tax rate. Since the Borough still needs to collect the same amount of money and property values have gone down, the tax rate will go up to compensate for the difference. Our local tax rate increased 1.8 cents to provide money to cover the budget.
How the Re-assessment affects the Tax Rate
Although we believe we are now assessed at on or near 100% of true market value (TMV), the County applies something called the “page 8 formula”, (so named because it is on page 8 of the State Administrator’s manual) which is applied the first year after a reassessment. If property values go up, this formula supposedly helps us with our County and School tax rates, but when applied to a decreasing ratable base, the formula shows us to be at 85% of TMV. For the County and School taxes, each municipality must pay on 100% of TMV, so a ratio is applied to bring us up to the requirement. So if the County tax rate is .35/100, we must pay 15% more than that. When you do get the bill with the breakdown, you will see County and schools are the big increases (although both school systems also reduced their budgets this year).
Do not multiply the 3rd quarter estimated tax by 4.
We already paid for the 1st and 2nd quarters, so the last 2 quarters include what was not collected in the first 2 quarters for the 2010 budget. To determine your taxes for the year, you must first multiply your assessment by the tax rate, then divide by 100.
For example:
2010 Property assessed value = $950,000
Estimated total tax rate = .856 per 100
$950,000 * .856 = 813,200 / 100 = $8,132.00 total taxes for 2010
Estimated 2010 Tax Rate
Municipal 0.220
County 0.371
Regional School 0.222
Local School 0.043
Total Tax Rate 0.856