Proposed Municipal Tax Rate Hike Needed to Counter Tax Appeal Refunds & Decline in Township Tax Base

The 5-cent increase to the municipal tax rate is needed to pay for cash refunds and to make up for the loss of revenue caused by successful tax appeals by Lawrence Township property owners, township council was told earlier this week.

Cash refunds that must be paid out and the substantial decrease to the township’s tax base that have resulted from successful appeals of their tax assessments by property owners will drain $1.25 million from Lawrence Township this year and, in turn, are responsible for the 5-cent increase to the municipal tax rate that Township Manager Richard Krawczun has included in his recommended 2013 municipal budget, Krawczun told members of Lawrence Township Council earlier this week.

Following up the presentation concerning the 2013 recommended budget he made to council on Jan. 22, Krawczun used the manager’s report segment of Tuesday evening’s (Feb. 5) meeting to discuss the “revenue side” of the budget.

Using a PowerPoint slideshow (a copy of which is available via the media box to the right), Krawczun spoke about a number of topics, from how surplus funds are used as source of revenue in the budget and how surplus is regenerated each year to how much money the township took in last year and how much it expects to generate this year from various sources like construction permits, red light camera violation fines, ambulance service fees and the collection of delinquent taxes.

Krawcun explained that the township expects to pay about $1 million in cash refunds to property owners who appealed their tax assessments. He stressed that while the only 21 cents of every tax dollar paid by township property owners actually goes to the township – with the rest going to the Lawrence Township public school district and Mercer County government – the township is responsible for dolling out the entire refund amount.

Because of those successful appeals, the township’s tax base in the last year dropped nearly $27.1 million and now stands at $2,500,748,969. That loss of $27.1 million in ratables just by itself amounts to a loss of tax revenue in 2013 of $254,952.87.

To make up for that loss of revenue and to pay for the tax refunds, Krawczun has recommended that the municipal tax rate increase 5 cents to $0.94 per $100 of assessed property value. That increase would mean that the owner of a home assessed at the township’s current average of $160,262 would pay an additional $80.13 this year in taxes or $6.68 per month.

Combined with the newly-created fee for bulk trash pickup – to be set at $25 for this year – a residential property owner with a township average assessed value will pay $8.76 more per month if the 5-cent tax rate increase is implemented.

Successive years of tax appeals have actually caused the township’s tax base to plummet more than $194 million since 2007, when the assessed value of all property in the township was $2,695,162,162, according to Krawczun.

Had the tax base remained at the 2007 level, and applying the 2012 municipal tax rate of $0.89, the township would collect an additional $1.7 million in tax revenue this year, Krawczun noted.

“Over the last couple of years, and particularly in the last 14-15 months, there has been a significant impact on the value of taxable property [from appeals]. Why that is significant, at the risk of being redundant, is it causes us to have to refund taxes. As you are aware, we refund those taxes at the full amount to the taxpayer… Though we only receive 21 cents on the dollar last year, we refund 100 percent,” Krawczun said. “It also creates a difficult situation because it causes the value of a penny on the tax rate to drop. So it actually causes the tax rate to increase because the value of a penny drops.”

The township manager’s presentation can be listened to from the 34:30 mark of meeting Audio Part 2, which is also available from the media box above.


grill master February 08, 2013 at 11:48 AM
Because of Dick's mismanagement of finances it now falls on us, the taxpayers to make up the difference. Still, no cuts to existing salaries have been made. I guess Dick can't cut his salary since he needs to pay for that townhouse in Florida.
Lw February 08, 2013 at 01:32 PM
Unbelievable!!! Then you will reassess this year and double our taxes. Greedy bastards. No one is giving me an increase in services instead we lose on both ends. You take away police and services and keep increasing taxes.
Richard February 08, 2013 at 03:05 PM
And yet, they keep giving each other RAISES !!! Unbelievable, and, school taxes are so high with so much waste going on there. When school taxes go up, it doesn't go toward the kids or education , it's for more greedy salaries of the guys on top.
Max R February 08, 2013 at 03:42 PM
Add the $25 "Bulk Waste Fee" and the tax increase for municipal purposes only is 7.4% this year. Here's the math: The average house is assessed at roughly $160,000 2012 tax rate = 0.89 per $100 so this house's municipal tax bill in 2012 was $1,426.33 2013 tax rate = 0.94 per $100 so this house's municipal tax bill in 2013 will be $1,506.46. Add the $25 "Bulk waste fee" and the 2013 "tax" will be $1531.46. Divide $1,531.46 by $1,426.33 and you get 1.0737, which is a 7.37 or 7.4% tax hike. Dress it up any way you like, but its a 7.3% tax hike this year, which brings the current 4 year council to a whopping 33% tax increase since 2009.
BEVERLY February 08, 2013 at 04:38 PM
Linda February 08, 2013 at 04:57 PM
I am at a loss for words as anything I may want to say would not be pretty! Liberalism is a scurge on the earth!
2big kp February 08, 2013 at 09:54 PM
How r they going to enforce a hike deemed not a tax on the tax payers who were not given the chance to vote for or against. More importantly how can they force a bulk trash fee on someone who does not use or want a fee and how will they collect it from me?
DGS February 08, 2013 at 11:13 PM
Our township need smart Assessors, many properties are under assessed and we are paying for that. for example, 2727 main st. was sold for 520k in 1/10/2011 (when market was at lowest level) this property is assessed for $165k and paid only $7090 property tax for 2012, ( correct amount should be over 12k) there are many property in township like this who are paying much lower tax than they should and because of this we are paying higher tax than we should
Overtaxed February 09, 2013 at 12:49 AM
From http://finance.yahoo.com/news/the-states-people-are-fleeing-in-2013-194007689.html : At No. 1, New Jersey has the highest ratio of people moving out compared to those moving in. “New Jersey has been suffering from deindustrialization for some time now, as manufacturing moved from the Northeast to the South and West,” says economist Michael Stoll, professor and chair of the Department of Public Policy at the University of California, Los Angeles. “And because it’s tied to New York, the high housing costs may also be pushing people out.” -------------------------- Another reason: having Lawrenceville-style municipal council and township manager!
Chief Wahoo February 09, 2013 at 01:16 AM
you have all allowed Dick to lead you over the cliff......its amazing that you still listen to a single word the clown says
David Smith February 09, 2013 at 01:36 AM
Wait till after the re-evaluation when a lot of home owners will be paying less. The real problems will begin. Most houses are paying too much in taxes now but don't go thru the process of having their taxes reduced. I don't even want to think about the back log of cases after next year. Scary stuff.
David Smith February 09, 2013 at 04:27 AM
Our property values have decreased not increased chances are your property taxes may go down instead of up. That's what this article shows. Values are down. Next year may well be better for property taxes but higher for taxes to close the deficit. As they say death and taxes.
Tugwalla February 09, 2013 at 07:41 PM
It looks like this "5% increase due to tax appeals" is a cut and paste political farce driven by the association of municipalities. Search the patch and you will find several mayors and town managers spewing the same nonsense. Its designed to cover mismanagement and lack of leadership.
Lynden Arden February 11, 2013 at 01:55 PM
The next to the last slide is always an eye opener to see how low Lawrence tax rates are compared with surrounding communities. I would prefer taxes not going up also but there are realities that can't be solved by eliminating "waste" and "Liberal" agendas.


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