The Monmouth Assessment Demonstration Program is an ambitious plan to show that improved collaboration among municipal assessors and the county tax board can help produce “qualified annual reassessments”, with inspections completed on a 5-year cycle. Since all properties within the county will have the same valuation date, Monmouth is clearly leading the way toward fair and equitable assessments in NJ.
This is a step in the right direction that will hopefully encourage other NJ counties to follow suit. However, although the MADP could get us closer than ever to the goal of “county-wide” fair and equitable assessments, the program still suffers from the same fundamental flaw that affects all New Jersey assessment programs. Monmouth County property owners will benefit from updated assessments that are intended to reflect current values, but only those taxpayers who believe their assessments are incorrectly high are likely to challenge their assessments. The bright side with Monmouth County is that reduced ratables resulting from incorrectly low assessments should be corrected the next year, since assessments are updated annually. However, under-assessments resulting from incorrect property data might remain until the next inspection cycle, which could be several years.
A cost-effective “upgrade” to the MADP that would help reduce or eliminate under-assessments is Appeal-Guided Valuation™. Since Monmouth is striving to keep assessments current and also has extensive online property data, it is ideally suited for a system like AGV that uses an “informal”, non-binding, online appeal system to develop “market-driven” assessments. Appeal-Guided Valuation™ would be used as a “pre-valuation” tool, generating valuable data that will help local assessors make proper adjustments before assessments are finalized.
Making proposed assessments available for review by thousands of taxpayers will do much more than reduce the number of incorrectly low assessments. Below are just a few benefits of using Appeal-Guided Valuation™ with an existing assessment system:
- Opening proposed values up to vigorous review will result in well-supported final assessments that are more likely to be upheld in an appeal.
- Unlike the “traditional” appeal process in which substantial resources of the assessor’s office are consumed by the need to deal with each appeal individually, AGV enables the assessor to use the “online” appeal process as a tool for gathering data which can be used to make adjustments that eliminate “appeal clusters”. This will significantly reduce the number of “formal appeals” once the assessments are finalized.
- By encouraging appeals of under-assessments, AGV will raise awareness that low assessments due to missed renovations or other improvements will increase tax bills for other property owners. This means that property record cards are more likely to be corrected, either through “under-assessment” appeals or because owners will be more likely to report improvements to their own properties.
- Giving property owners the opportunity to participate directly in developing fair and equitable assessments will give them more confidence in the integrity of the assessments and further reduce the likelihood of formal appeals.
In weighing the potential benefits of implementing Appeal-Guided Valuation™ against problems that could arise, assessors and county tax administrators would likely be concerned that large numbers of taxpayers would try to gain an advantage by “bypassing” the online appeal system and attempting to “negotiate” their proposed assessment directly with the tax assessor. Although it may take some time for property owners to adjust to the idea, it should be made clear to taxpayers that private discussion of proposed assessments is not permitted under an AGV system. Since the basis of the AGV approach is that disputed assessments are best resolved by taxpayers appealing “against each other”, it would be inappropriate for taxpayers to “bypass” the system. This should be emphasized from the start and the position of the assessor strongly supported by both local officials and the county tax board.
The positive impact of an Appeal-Guided Valuation™ system will be apparent in its first year of use, with thoroughly vetted assessments and a likely reduction in formal appeals. Since AGV also reduces the need for costly and intrusive inspections, it may lead to elimination of State requirements that all properties be inspected on a regular basis. Based on the above, combining the dynamic, market-driven capabilities of Appeal-Guided Valuation™ with an already promising Monmouth Assessment Demonstration Program would be an important step toward the ultimate goal of fair and equitable assessments throughout New Jersey.
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