Assessments Questiones
April 6, 2009
updated April 7, 2009

There have been recent articles (1,2) in the papers covering the assessment controversy in Franklin. At the root of the problem is that hundreds of business owners have seen their property assessments increase 2, 3, 4 and in at least one case 7 times the value of their last assessment.

In prior TUF articles we have covered that assessments don't drive the amount you pay in taxes. We made those statements at a time that most assessments were increasing evenly. In this case however one sector of properties (businesses) increased while the major sector (homes) decreased. When that happens then the sector that has had their assessments increased will see a large increase in taxes. One business owner is expecting the taxes he has to pay to go from $70K to $400K. Many complain that the rental rates that were used to calculate the value of the property far exceed what they are actually collecting.

The problem started three years ago when there was considerable question about the accuracy of the last tax assessor Barnum Hobbs. That resulted in freezing of assessments for two years and hiring a new tax assessor on Feb 26, 2008, Konstantin (Stan) Belenky. By the way during the assessment freeze taxes increased because, as TUF has always claimed, spending drives taxes and spending increased.

This is the first year that Mr. Belenky is managing the assessments. He is well aware that many have seen huge increases in their assessments. He states the increase is not a mistake that he has made but that Mr. Hobbs the prior assessor undervalued business. The term he used was "business friendly".

According to Mr. Belenky the consequence of being business friendly is that the burden of taxes then falls on the home owner. He estimates that 16,000 homeowners will realize an average of a $1000 reduction in their property taxes this year. He emphasized that some may see only a very small amount and others may see more than $1000. About 2000 home owners had their assessments increase so their taxes will increase.

Business do have the opportunity to appeal their assessments, however there is a catch. Most businesses are required to file a "Form 91". If one does not file a Form 91 the business is not eligible to file a tax appeal. Many have not bothered to file a Form 91 in years thinking "it's just another government form". Others claim that businesses purposely don't file because the information in the form may lead to increased taxes.

A cynical view would be that business owners made their own bed, let them lay in it. The problems with that point of view are numerous. The first is that each home and business should be assessed at its true market value and if the assessor is wrong (and high) then they pay an unfair penalty. The other problem relates to the current hard times. Increasing taxes by these huge amounts will cause some of our business to go out of business. If that happens then people will lose jobs and the burden of taxes will go back to homeowners.

Township Council has control of assessments. This is not true. The assessor was appointed by the the Township Manager and confirmed by the Council. While he is paid by the Township the ability to fire him rests with the County/Trenton. Council can not instruct the assessor to change any assessment. This is intended to keep politics out of the process of assessments. It is TUF's understanding that Council does have significant input into the decision of Mr. Belenky's tenure.

I've heard several people say that this was done to collect more taxes for the Township. Such a statement demonstrates a fundamental misconception of the tax system. Changing assessments has ZERO effect on the amount of money the Municipality, County or School Board collect. ZERO. These three entities set their budget. They then set a tax rate that will ensure that they get that amount.

TUF believes that the concept of property taxes is flawed but if that is what we are stuck with then the only way to perform assessments fairly is to do it accurately. TUF's Phil Kramer has suggested that the Township sponsor an independent assessment of random business to see if the assessor is accurate. This will not help this year because it's too late to change the assessments without an appeal. It will however help us to determine if the assessor is doing his job correctly.

© 2003-2010 - Taxpayers United in Franklin