The Jersey City Council caucus reviewed an emergency appropriation to cover the $21 million needed for residents who are owed money due to tax appeal judgements and settlements at yesterday’s caucus.
By Daniel Ulloa/Hudson County View
“Can you give us an overview of what’s going on? Ward E Councilman James Solomon asked.
Jersey City Finance Director Carmen Gandulla explained that their liabilities increased.
“We were paying them as we went and they came in. Due to COVID and courts, we got a lot more liabilities related to this so it’s close to $11 million in refunds,” she began.
“This was a recommendation of putting this forward in the event we don’t have overruns. We worked out this financing to cover any shortfalls or gaps.”
Solomon then asked to get a breakdown of every tax appeal that led to this before one of his colleagues chimed in.
“This is a really large number. If we could understand whether it’s commercial or residential,” noted Ward B Councilwoman Mira Prinz-Arey.
“It’s a mix of both,” Gandulla replied and offered to provide a memo the council.
Solomon said that $11 million in potential liabilities from appeals doesn’t explain the other $10 million, therefore he asked if that was to put safeguards in place for other budget shortfalls.
“Legally, we prepared this to cover any general liabilities as well in case something does come. It’s on a rolling basis. We did attempt to collect this info ahead of time. We didn’t get anything. I gotta work with the assessor’s office, I gotta work with the courts to get this information,” Gandulla stated.
“Considering it’s the end of the year I don’t want any surprises or anyone saying we didn’t prepare a plan or present something to you. This would be paid over five years.”
Solomon further questioned that given rising interest rates and other liabilities expected in the next few budget cycles, wouldn’t the city be better off with a smaller appropriation for now.
“I wouldn’t want to go lower. We already know some things didn’t make this meeting. There are other things I can’t predict. This is legally allowing me to authorize … let’s say a back-up plan,” Gandulla said, again pointing to struggles based out of the tax assessor’s office and the municipal courts.
She also mentioned that it took two to three months just to get a handle on what cases are pending and the related costs.
“There’s nothing we can do John?” Council President Joyce Watterman asked Assistant Corporation Counsel John McKinney.
“We get flooded with tax appeals every year, it is really kind of up in the air, there’s nothing much we can do but fight ‘em,” he responded.
“We have to do something. We just can’t keep accepting it. What can we do?” Watterman pressed on.
“They have a right to appeal their taxes in front of the county board. And the county board is relatively friendly to the taxpayer. We are going to have some instances … where the baby’s going to get split and taxes might come down a little bit,” McKinney added.
Watterman asked why it took so long to compile this information.
“There were just simply matters that were still pending. The data just wasn’t there,” McKinney replied.
Solomon responded by indicating such a mindset is unacceptable here.
“Someone … should at least know just what the potential liability is. I have been in pretty constant communication with the BA (Business Administrator) and the law department asking for possible tax appeals on commercial real estate in the future given declines. We haven’t gotten anywhere with those requests,” he asserted.
“We need to know what are liabilities are and be able to plan for them.”
McKinney then stated that further data will be compiled and that they will discuss this matter further in the future.
“It doesn’t help us today. We need to come up with some type of solution. It affects residents,” Watterman said.
“Sometimes the county board rules in favor of the person who filed the appeal. There’s nothing we can really do about that except take it up to state court which we do on a number of them,” McKinney responded.
Watterman further stated that Gandulla presented mostly estimates, as opposed to hard data, which is concerning.
“How big are the discrepancies? From what we project and what they think it should be?” Ward F Councilman Frank “Educational” Gilmore asked.
“We already paid out close to 20 million this year. I don’t think they had someone looking at this from an analytical standpoint versus a rolling standpoint. We’re preparing this finance to cover the gaps. We’re still coming out of the pandemic,” Gandulla said.
McKinney explained that once a case is settled, the tax rates are locked in for a couple years.
