Hopatcong Residents, Officials Lock Horns Over Tax Bill

By Michael Daigle

The heatwave that gripped much of the region may have broken by Wednesday night, but the residents of Hopatcong provided their own heat as they vented their frustration over new and greatly larger property tax bills that are due Aug. 1.

The new higher taxes are the result of a reassessment done over the past year that dropped the total value of the borough by 30 percent, which lowered the values of the majority of homes and forced up the tax rate.

The reassessment was done last year at the behest of the Sussex County Board of Taxation because the borough’s assessment to market value ratio had reached 114 percent, Mayor Sylvia Petillo said.

That meant that assessments were on average 14 percent higher than average market values for homes, and if unchanged the imbalance would have risen to 118 percent this year.

The borough needed to stem the tide of tax appeals that followed the 2007-08 housing market crash and the effects of a 2008 revaluation, Petillo said.

The borough faced 360 tax appeals in 2012 and is anticipating more than 500 this year, she said.

“The increase in tax appeals and the loss of revenue and the drain on our budget made it necessary to reassess the entire borough,” Petillo said.

Residents had little patience for the largely technical explanation for the tax increase. In between explaining that the  tax increase -- some cases 30 percent -- could drive them out of town if they could sell their home, residents complained about the quality of Hopatcong schools, some going as far as suggesting that the local school district should merge with another district. Also on the hit list was the condition of the roads, the number of police cars, rude borough employees and the amount of weeds in Lake Hopatcong.

Middle Class Woes

Dalia Fane of River Styx Road said that her taxes are rising $1,000, and she was uncertain how she would pay them.

“I’ve lived in the house for 35 years,” she said. “What should I do? These are just middle class people.”

She complained that the borough failed to notify residents that the reassessment was taking place and what it would mean

Petillo said notices were first sent out in February and were followed by several others, including those placed on the borough’s website. The effort included a link on the website where a resident could plug in their new assessment to see an estimated tax, she said.

Resident Thomas Friel of Maxim Drive said he faces a tax increase of 38 percent. “This is a disproportionate impact on lake front properties,” he said.

Friel said the local school district should be merged with a neighboring district and complained about the number of police cars.

Hilery Zusi of Maxim Drive said all the residents were angry at the number --  the actual tax increase. He said the value of his home dropped $100,000 but his taxes rose 30 percent.

By the Numbers

Petillo tried to explain the process of property reassessments and the borough’s recent history. The tax assessment process is set in state law and handled by county tax board, she said. Other than hiring the assessment company,  Appraisals Systems Inc., one of three which bid on the contract, the borough has little to do with the actual process.

While a revaluation was done in 2007,  the soft housing market since 2008 created a situation where assessed values of properties are not aligned with the market value, resulting in a sharp increase in tax appeals, she said.

Since 2007, the borough has faced over 1,383 tax appeals, Petillo said.

For the 2013 municipal budget, the council had to cover the loss of $40 million from tax appeals. That action added $40 to the average tax bills, making the total tax increase this year $71.

Petillo said they borough sought to reassess certain neighborhoods last year   but the county tax board instead ordered a full reassessment. In addition, the county demanded that all Sussex towns complete revaluations by 2015 so that the county tax rate can be equalized, she 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.

Petillo said that while the total 2013 tax rate for the borough, including the municipal, local school and county budgets, rose less than 1 percent, the drop in valuation drove the tax increase.

The total 2013 tax rate for the borough, including all school, county and municipal taxes, was 3.07 per $100 of assessed value.

Help on the Way?

Petillo said she has been in contact with Hopatcong’s representative in Gov. Chris Christie’s office seeking help with the issue, including the possibility of creating special waiver period or other means to help homeowners pay the higher tax.

The council will also work through the local tax assessor’s office to see if the county tax board would allow a second look at assessments in certain neighborhoods, Petillo said.

Further, representatives from Appraisals Systems will meet with homeowners who signed up Wednesday for a review of their assessment, Petillo said..

Borough attorney John Ursin said that while the assessments were done last year, they actually are certified  Oct. 1 after the count had reviewed homes sales records for comparison. He said the local tax assessor has been in the habit of reviewing assessments with homeowners and making recommendations for changes to the county board by Jan 1 of each year. She will continue that practice  this year, he said.

Residents can file 2013 tax appeals between Jan 1 and April 1 next year, he said.

The outcomes of those appeals are retroactively applied to the 2013 taxes, he said.