Every year, Moorestown loses tax revenue from devalued properties whose owners have appealed their pre-recession assessments.
Township tax assessor Dennis DeKlerk said 200 property owners—nine commercial, the rest residential and a few vacant—appealed their assessments last year, leading to a $423,000 loss (a large chunk of which would have also gone to the county and school district) in the amount of taxes collected.
"Those are really historic highs," he said. "That's the sort of thing that sends up red flags."
For some perspective, DeKlerk noted the amount of tax revenue lost through appeals in 2007—the year the current assessments were set—was $38,000.
Then the housing bubble popped, the recession hit, and now more and more people are realizing their homes aren't worth what they thought they were—at least in terms of the market. DeKlerk said property values on average are down at least 20 percent from 2008.
The problem, he said, is the township doesn't have the ability to defend existing assessments because it doesn't have "solid market values."
"We're trying to defend 2007 values in a 2011 market," he said, "which is not working."
DeKlerk has recommended the township carry out a reassessment to resolve the disparity and stem the appeals.
Council members are open to the idea, Mayor John Button said, but will take more time to investigate the merits of a revaluation before taking any action.
"I'm just starting to get my head around it now. Certainly, from my perspective, we have a problem," he said. "Anything that potentially has a financial impact, we have to understand how that works."
DeKlerk expects as many, if not more, appeals this year. If the township decides to undertake a reassessment in 2012—the entire process usually takes about a year—those values would take effect in 2013.
He estimated the cost of a reassessment at anywhere between $190,000-250,000, but said the township could spread its payments over a five-year period.
By comparison, Button put the price of the last reassessment at more than $500,000.
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