The assessed value of property in Hopatcong dropped $581 million, according to a preliminary report on the current reassessment being conducted by Appraisal Systems, Inc.
The company has been meeting individually with residents following the mailing of new property assessments earlier this month. The new values will take effect in August.
In a preliminary tax impact statement, Appraisal Systems estimated the 2013 assessed value of the borough’s 7,128 taxable items at $1.415 billion, down from the 2012 assessment of $1.996 billion.
The estimate said the assessed value of the borough’s 6,077 residential properties dropped from $1.875 billion in 2012 to $1.320 billion in 2013.
That change reduced the average residential assessment from $308,590 to $217,139 for 2013, a drop of $91,451 per home or 29.6 percent.
The projected tax rate for the borough, including all school, county and municipal taxes, was estimated at 3.04 per $100 of assessed value. That is an increase of 71 cents per $100 from the 2012 tax rate of $2.155.
The average residential property tax bill is expected to drop in 2013.
A resident with a home assessed at the borough average should see a property tax drop of $48.73 cents in 2013, to $6,601, provided there are no budget increases, Appraisal Systems said.
The municipal budget and Hopatcong School District budgets will be completed in the spring. Both bodies are required by state law to hold any budget increase to less than 2 percent.
The borough took on the reassessment last year to stem the tide of tax appeals that followed the 2007-08 housing market crash and the effects of a 2008 revaluation.
Tax Assessor Theresa DePierro said previously that the borough faced 360 tax appeals last year.
Borough Attorney John Ursin explained that the Sussex County tax board informed the borough last year that because of falling market values for homes, the town’s ratio of market values to assessed values had reached 114 percent, which in the past three years triggered a landslide of tax appeals filed by homeowners and businesses.
Ursin said the $300,000 cost for the reassessment will help the borough potentially avoid $150,000 or more in costs annually for the next couple of years to respond to tax appeals. That potential cost would be added to what the borough has already spent on more than 500 appeals in the past three years, he said.
The 2008 revaluation set the borough’s net property worth at $2.076 billion, but the 2008-09 recession and the housing crisis slowly eroded that total, Mayor Sylvia Petillo said in the fall.
The result was that assessed values exceeded the market (sales) values for Hopatcong properties, triggering the wave of tax appeals.
Hopatcong is one of seven Sussex County municipalities where Appraisal Systems is conducting reassessment or revaluations this year.
In Green Township, the net value of the township’s property value is projected to drop $135 million in 2013, down from $554.8 million. The total estimated tax rate for 2013 is $3.179 per $100, up from $2.351.
In Byram, the 2013 total property value is expected to drop $164.5 million, to $939.8 million. The estimated tax rate is expected to rise from 2.636 in 2012 to $3.159 in 2013.
Hopatcong’s residential properties provide the majority of taxes. Appraisal Systems preliminary tax impact showed that of a total of 7,128 taxable properties in the borough, 6,077 are residential.
There are 40 farm properties assessed at a total of $2.82 million; 79 commercial properties, valued at $71.16 million; and 932 vacant properties valued at $20.3 million.
Resident Michelle Guttenberger pointed to that imbalance to suggest that homeowners are being hit with higher taxes because large privately held land trusts are not being taxed enough.
She specifically targeted Hudson Farm, a 3,800-acre former estate in Hopatcong and Andover that is owned as a land trust and charitable foundation. The charitable entity was created in 1921.
According to the borough’s open space plan, Hudson Farm has 409 acres in Hopatcong that functions as a hunting and shooting estate for both game and for clay pigeons. The property is both farm and commercially assessed and paid approximately $89,000 in property taxes in 2012.
Guttenberger said the borough has “missed opportunities” to broaden its tax base through its support of Hudson Farm’s land trust status, which supports a commercial business, and failure to aggressively pursue economic development, especially in the River Styx section.
Borough officials just recently announced that the Highlands Commission has granted a town center designation for River Styx, which will allow for planning to lead to future development of that section. The designation has triggered interest from developers, officials said this month.