Tax appeal refunds continue to take bite out of municipal budgets.

by: Richard De Angelis
1 Jun 2011

The Edison Township Council recently approved settlements in 75 tax appeals for the 2010 tax-year that will result in $6.5 million in refunds. The refunds will be funded through cash disbursements or as a credit on future tax bills. The problem for Edison is that there are more than 100 tax appeals for the 2010 tax-year that are still pending.  To make matters worse, there are several hundred other appeals pending from prior tax-years, some dating as far back as 2007.  So far, the Township has paid out over $4 million for refunds attributed to 2009 appeals. 2011 will not bring any relief to the Township which is facing a record 544 tax appeals this year, nearly double those filed in 2010.  For more on Edison’s tax appeal refund woes, click here.

Edison is not alone.  While municipalities across the State are defending the record number of 2011 tax appeals, they are doing so on the heels of paying out significant refunds on 2010 appeals.  Last year, Monroe Township estimated that it would pay out $5 million in refunds due to 2010 tax appeals. Municipalities are scrambling to figure out how to pay these refunds. While some, like Monroe, are increasing their tax rates, others are borrowing. The Township of Lyndhurst last year issued $3.75 million in municipal bonds to cover the cost of tax appeal refunds.

Of course, while the municipalities are struggling to pay the refunds, the property owners who filed the appeals are benefitting from a reduced tax burden that resulted from a successful tax appeal.