Taxes & Assessments
We all know that taxes are one of the two sure things in life. But did you know that your local taxes are based on two key elements - your home's assessed value, and your tax rate? Your total tax bill is calculated by dividing your home’s assessed value by 100, and then multiplying it by the tax rate. Both factors can contribute to an increase (or decrease) in your local real estate taxes.
Let’s first look at assessed value. Our local tax assessor, under New Jersey Public Law 2013 CH.15, is required to conduct an annual reassessment to appraise all real property within the taxing district according to its full and fair value. The purpose of the reassessment is to fairly distribute the tax burden among all property owners within the township. Generally speaking, a change in a home’s assessed value is calculated based on comparable sales and local market trends, as well as home inspections that are conducted once every five years.
The property tax rate is based on the fiscal needs of the municipality, the school and the county, as well as funds allocated for the library and open space. Last year, Bedminster’s tax rate was 1.373 per $100 of assessed value, of which 20% was driven by municipal needs. The remainder was driven by the school (52%), the county (25%), the library (2%) and open space (1%).
The Township Committee's approach to creating the annual municipal budget is simple - taxes are your money, and not ours to waste! That means eliminating unnecessary expenditures, identifying efficiencies, realizing costs savings opportunities through shared service arrangements, and prioritizing capital investments that provide residents the biggest bang for the buck. It's never easy and necessitates some tough choices, but in the end, we live by the credo that low taxes are Job #1 in Bedminster.
The Mayor and the Township Committee are keenly aware of the burden any tax increase places on our residents. Individuals living on fixed incomes, as well as those who may have suffered a job or business loss resulting from the pandemic or changes in the labor market, are acutely impacted. In addition, real wage growth has not kept pace with inflation (up 9.1% annually in June of 2022), resulting in less buying power for the average working family.
Under a change in state law in 2010, municipalities can raise property taxes by no more than 2% per year. As your Township Committee, we treat that 2% cap as a boundary we should rarely approach and consciously try to avoid. In 2023, the tax levy to support the municipal budget will increase by only 1.59%; that same number was 0.64% in 2020, 0.02% in 2021 and 0.87% in 2022.
While we work very hard at keeping well under the 2% cap, forces outside our control make it increasingly difficult. While the Governor may tout “no new taxes” in his latest budget, what he fails to account for are the large number of unfunded mandates routinely passed down to each of the 564 municipalities in NJ. This year alone, we will need to absorb significant expenses in order to comply with the new stormwater management regulations imposed by the state. This comes on top of other recent mandates requiring us to self-fund changes in policing, records management and data retention.
This year, the average assessed value of a home in Bedminster is approximately $492K, meaning property values increased by over $16K versus 2022. The 2023 municipal tax rate is 26.6 cents per $100, a 1.97% decrease in comparison to the prior year. In addition, your local taxes include allocations for the library (3.4 cents per $100) and the municipal open space fund (1.5 cents per $100). Adding the three together, the combined municipal/library/open space tax is 31.5 cents per $100, or $315 per $100,000 of assessed value. As a result, the average local property tax1 bill in 2023 will be $1,550, up about $33 versus 2022.
1Local taxes are comprised of municipal taxes, local open space tax and library tax, but do not include county, county open space or school taxes.