STONE HARBOR – The Borough Council has authorized an emergency appropriation of $650,000 to pay for a boroughwide reassessment.
The reason for using the emergency appropriation mechanism to cover the sizable cost of the process is that the state allows the borough to finance an emergency appropriation for the reassessment over five annual budgets with a minimum of $130,000 per year.
The county tax board places the true or market value of Stone Harbor real estate at $9.5 billion. The borough has a total area of 2.2 square miles, with 1.4 square miles of land area. The aggregated assessed value of land in Stone Harbor is $5.1 billion, meaning that the ratio of assessed value to market value is only 53%, well below the 85% ratio at which the state sets a trigger for either a reassessment or revaluation.
Prior to the pandemic, in 2019, county records show the ratio of assessed to market value of the borough’s real estate was 95%. The borough had completed a revaluation, an even more complex task than a reassessment, in January 2018. In the period of time from that assessment to today the value of Stone Harbor property soared, adding $4.4 billion in market value, distorting the basis for a fair spread of the tax burden.
With the market value of real estate at close to twice the assessed value, the borough is also losing the ability to increases its threshold limits for the state’s appropriations cap, a critical issue in borough budgeting for the last few years.
As council member Ken Biddick has explained at public meetings, the tax assessor has not placed new ratables on the books at market value given the lopsided nature of the overall ratio of assessed to market values. This deprives the borough of much needed growth in allowable spending under the state appropriations cap.
For two years in a row Stone Harbor has come very close to the spending cap in its annual budgets, so much so that there was talk each year of possibly needing to request a cap waiver from the state, a request the state does not always look favorably on. In 2024 the borough budget was only $29,000 under the state cap limit.
The $130,000 per year for five years might itself be a difficult expense to fit under the cap without a waiver. The benefits of a reassessment process for the spending limits in the budget may not be realized until after the reassessment is completed, a process that can take one to two years.
All but one of the county’s municipalities is below the 85% threshold that indicates the need for a reassessment. North Wildwood initiated a citywide reassessment in June. Other municipalities are expected to follow.
While the vote on the resolution was part of a public meeting of the council Oct. 21, there was no discussion in the public session of the cost involved, the time schedule for initiating the project, or when the five years of budgetary impact of the emergency appropriating would begin.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
