Sandy, A.C. woes, spell higher taxes for many N.J. towns

The wrath of Hurricane Sandy and Atlantic City's financial meltdown left many Shore towns with among the highest property-tax increases in the state over the last five years.

Atlantic County had the greatest increase in property-tax bills - 34 percent - from 2009 to 2014, according to an annual report from the New Jersey Department of Community Affairs released last week.

Ocean County property-tax rates went up an average of 14 percent. But the average property-tax bill in Point Pleasant Beach rose 22 percent, and the town of Long Beach had a 21 percent increase.

The report listed property-tax bills - which include county, school, and municipal taxes - for all 565 New Jersey towns in 2014 and compared them with previous years.

Longport in Atlantic County - where the average house is assessed at $1.07 million - led the top-10 Shore municipalities with the highest change in property taxes, from $7,448 in 2009 to $9,776 last year. Atlantic City came in second, with residents paying $4,400 in 2009 and $6,421 in 2014.

But in terms of tax percentages, Atlantic City finished first, with a 46 percent tax increase over the five-year period, followed by Longport's 31 percent hike.

"What's happening in Atlantic County is the 'A.C. effect,' " said Keith Szendrey of the Atlantic County Board of Taxation. "As Atlantic City's value goes down, the other towns are forced to pick up a larger share of county taxes."

With New Jersey having the nation's highest property taxes, the hot-button political issue is again expected to take center stage this year with all 80 seats in the Assembly up for reelection.

The average statewide property-tax bill rose about 12 percent over the five years. The increase was smaller in Gloucester County, at 9 percent, and in Burlington and Cape May Counties, which posted 8 percent increases over the last five years. Some towns in the tri-county area had double-digit increases over the five-year period, with Camden County's Hi-Nella and Audubon Park both showing a 33 percent increase.

The average New Jersey property-tax bill increased 2.16 percent last year - or an extra $173 - to $8,161, after two years of growth rates below 2 percent.

The average statewide increase in property-tax bills was 1.3 percent in 2013, 1.6 percent in 2012, and 2.4 percent in 2011.

The Christie administration, which enacted the 2 percent cap on property-tax increases in 2010, also blamed the 2014 bump on the A.C. effect.

"The growth in statewide levy falls to just 1.8 percent when the outlier case of Atlantic City is factored out," Kevin Roberts, a spokesman for the governor, said in an e-mail.

In large swaths of Ocean and Atlantic Counties, the average property-tax bill went up between 12.2 percent and 19.9 percent from 2009 to 2014.

The exception was Mantoloking in Ocean County, which lost a third of its tax base to the storm. Property taxes in the 296-resident community dropped by $455, while homeowners in nearby communities, such as Bay Head and Beach Haven, paid more to make up the difference.

"A lot of people are rebuilding here," said Ed O'Malley, 39, of Mantoloking, whose family house sustained a foot of water from Sandy. "There is a lot of construction activity near the ocean and along the bay."

Mantoloking's tax assessor, Gary DalCorso, said that before the storm, the town's total aggregate assessed value was $1.6 billion for land and buildings combined. After Sandy in 2013, it was $1.08 billion, down 32.7 percent.

"We literally lost a third of our ratables due to flooding, structural damage, or total destruction of houses," DalCorso said.

Casino tax appeals have chipped away at Atlantic City's revenue since 2007, and four casinos closed last year. The city has had to pay nearly $400 million in property-tax refunds to casinos, and surrounding towns, including Longport, Buena Vista, and Margate, are shouldering a heavier tax burden.

There are 23 municipalities in Atlantic County, and all are connected through the county tax. Each is waiting on the fate of proposed state legislation intended to help Atlantic City, including a measure to allow the casinos to pay the city a collective amount in lieu of taxes - and the impact of the emergency management team that Christie established last month.

"If Atlantic City's share [of taxes] dramatically goes down, that will be redistributed to all the other towns in the county," Buena Vista Mayor Chuck Chiarello said Friday. "We can't set our tax bills until all these other decisions are reached. Atlantic City is under severe hardship."

Embattled Atlantic City Mayor Don Guardian acknowledged as much.

"Since 2010, Atlantic City has gone from a $20 billion ratable base to $11.2 billion in 2014," he said. "Couple that with further casino tax appeals, and that is the reason why taxes have increased over the past few years."

Atlantic City's fiscal struggles over the last five years hit Longport harder than other towns because 57 percent of its taxes go to the county.

Longport Mayor Nick Russo said that although the borough tax rate had gone down 10 cents per $100 of assessed value since a property reevaluation in 2013, "we are preparing to get hit hard with county taxes."

Approximately 81 percent of Longport homeowners don't live there year-round.

"We are very fortunate that we still have a very active volunteer fire department," he said. "That is a huge cost savings to the residents, and, two, we are strictly a sending district and pay per diem for education. We don't have a school.

"I try to explain to residents that our tax rate goes up very little - it's always been within the 2 percent budget cap," Russo said. "But our problem is we have no control over what's happening in Atlantic City."

William Antonides, chief financial officer in Bay Head Borough in Ocean County - population 1,032 - said it came down to picking up the slack for the towns Sandy hit hardest.

"We didn't have houses wiped off the map," he said, "but when Mantoloking or Toms River or Seaside Heights loses substantial housing, it hurts all of us because the county tax is divided by the value of all other townships. We still have to come up with the money to run county government."

Long Beach Township had a property-tax increase of 21 percent, or $1,554, from 2009 to 2014. Mayor Joe Mancini attributed it partly to the township's having to pay interest on Sandy-related construction loans.

He said Long Beach was still awaiting on $5 million to $6 million from the Federal Emergency Management Agency to cover hurricane damage.

"FEMA has not paid us what we're due yet," Mancini said. "We also had a 2 percent increase just in health-care and pension contributions," reasons taxes have gone up.

Property owners statewide paid $27.1 billion in property taxes last year, up $610 million from 2013.

On Monday, the day the DCA numbers came out, state Republicans presented a video in a packed ballroom at the Borgata during their rally.

The video featured a moving truck driven by Assembly Republican leader Jon Bramnick of Union County and blamed Democrats, who control the Legislature, for not containing property taxes and for why people and businesses were leaving New Jersey.