Tax Shocker For Sandy Victims

By Jean Mikle, Asbury Park Press, N.J.

McClatchy-Tribune Information Services

Aug. 16--TOMS RIVER -- When they opened their third quarter tax bill last month, Denise Viggiano and her partner, Mike Punko, could not believe it. How could they possibly owe $2,193 for just three months of property taxes on the small bungalow in the Ocean Beach II community where they've lived for nearly 30 years? The boost was three times more than they paid last year, post superstorm Sandy.

Why are our taxes so high?

"This is highly unusual," Viggiano, 62, said as she sat on a stool at the counter in the kitchen of the 500-square-foot home on East Bayberry Way where she and Punko have lived for 32 years. All of their neighbors received similar tax boosts.

"Everybody is buzzing about it," Viggiano said.

Residents at the beachfront communities say they are in shock at the large tax increases in the second year after Sandy. After the superstorm devastated parts of the Barnegat peninsula in October 2012, rendering the area uninhabitable for months, residents of beachfront communities in Toms River received large reductions in their assessments -- some as much as 90 percent.

But now that the area is recovering, property and home values are being raised by the tax assessor. The tax break residents received last year is disappearing, even as many struggle to recover from the storm.

In 2012 -- before Sandy hit -- Viggiano and Punko paid $5,311 per year, or $1,327 per quarter, in property taxes on their bungalow and small, stone-covered yard. Last year, their taxes were reduced 50 percent to $2,660, or $665 a quarter.

Now that rebuilding is occurring and many homes are again occupied, assessments are being changed to bring them closer to pre-storm values, based on property sales in the area during 2013, Toms River Tax Assessor Richard T. Kenny said. But since taxes for the first two quarters of the year are based on the amount paid the year before, homeowners in the beachfront communities must make up the difference in the last half of the year.

"Very little was collected on the barrier island in the first two quarters," Kenny said. "They are going to be paying the majority of their taxes in the third and fourth quarters...The increases are because of the dramatic reductions we did last year."

This has resulted in out-sized tax bills that have dozens of residents crying foul. They claim the increased amount of the quarterly bills caught them by surprise. The change in assessments has also made it more difficult for property owners to calculate the exact amount of their 2014 taxes. Kenny has posted an explanation of the process on the township's website.

The large boosts illustrate the difficulty faced by tax assessors in calculating values after the storm, according to Monmouth County Tax Administrator Matthew Clark.

He said assessors are only just starting to collect data on the post-Sandy housing market, data that includes dunes, new home elevation requirements, the amount and resiliency of dunes and other coastal barriers.

"It is the actions of the buyers and sellers -- who must consider this new bundle of concerns -- that will be used to set the assessments moving forward," Clark said in an email.

To residents of Ocean County's beachfront communities who are already frustrated with the pace of rebuilding and often suspicious of the motives of mainland politicians, the tax bills are another bit of bad news. And if they disagree with their assessments, homeowners cannot appeal their 2014 taxes until next year. The appeal deadline for 2014 was May 1.

"There are people here who can't afford these payments," Viggiano said. "People here were not prepared after the bills we received last year. We thought it was a permanent reduction."

Their August 2014 estimated tax bill instructs them to pay $2,193 by Aug. 22 or face substantial interest costs. But it does not include an estimate of their home's assessed value that would allow them to calculate the actual amount of taxes they will pay for the entire year. Their one-bedroom bungalow and 50- by 30-foot lot was assessed at $345,000 before the storm hit.

Most of the value is in the land in Ocean Beach II. The house was assessed at $25,400; the land at $320,000 in 2012.

In 2013, the land value was reduced to $127,700, and the home's value, to $3,900.

The August 2014 preliminary tax bill the couple received does not list the property's new assessed value, but according to the tax assessor's office, the property is assessed at $268,900, with $230,000 for the land, and $38,900 for the bungalow. Based on a township tax rate of $2.126, Viggiano and Punko will pay $5,716 in annual taxes -- $405 higher than in 2012.

"What we are concerned about is, why is this preliminary tax bill so high?" Viggiano said. With the area still only partially rebuilt, she doesn't think her home is worth anywhere near as much as the more than $300,000 she could have sold it for before the storm struck. Anyone who buys it will have to spend tens of thousands of dollars to elevate the house to meet new flood insurance standards.

Kenny stressed that if residents multiply their third-quarter payment times four, they will not be getting a true calculation of the amount they owe in 2014.

Take, for example, a home where the annual property tax bill is $10,000. With the 2013 reduction, the beachfront homeowner may have paid only $2,000 total in taxes for the first two quarters of this year. She would then have to pay $4,000 in both the third and fourth quarters to add up to the $10,000 annual total.

Ortley Beach resident Scott Edrington said his third-quarter tax bill totaled $5,238. Edrington, whose Ocean Terrace home was demolished by the storm, has not yet rebuilt the house. Dirt and sand cover the lot where his house once stood. Only a Winnebago trailer -- a base camp he uses when visiting -- remains on the property, along with several chairs. Waiting to see if he will receive a state grant, Edrington has not yet started the rebuilding process.

So he was surprised to receive such a large tax bill. "I was shocked," he said. "To me, it's just more of the same. Hit them while they're down." Before the storm, Edrington paid about $19,000 in taxes for the oceanfront lot and home where he has lived since 1981. Last year, that amount was reduced to $10,800. It's over $16,000 now, he said.

"I'm upset," Edrington said. "I haven't built a house yet. The area is nowhere close to being back the way it was before the storm." He said it's clear that when he eventually builds his house, he will be paying much more in annual property taxes than he did before the storm.

Reductions in assessments also happened in nearby Brick, where Tax Assessor Irene Raftery said land values in the beachfront communities were dropped by 25 percent last year. Most of the oceanfront area still has a 10 percent reduction in land values this year, she said.

"No single taxpayer is back to 100 percent on the barrier island," Raftery said.

In Toms River, Ocean Beach II resident Bruce Anderson, 67, said he has not been able to get any answers about his tax bill from the township, even though he's called several times in an attempt to find out more about the new assessment for his Shell Way home.

"If they come out and send me another bill for $2,000, I'm going to be looking for a lawyer," he said.

Jean Mikle: (732) 643-4050, [email protected]

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