Commercial properties that will be new to the expanded Special Improvement District (SID) in 2015 are likely to see what amounts to a nearly 5-percent increase on their property tax bill.
My estimate of 5 percent (4.84 percent to be exact) is based on the fact that city officials anticipate the SID tax rate might be lowered from $0.351 per $100 to $0.30 per $100 of assessed value once it is expanded from about 138 downtown properties to nearly 500 citywide. It’s also compared relative to the overall property tax bill for 2014 for many of the properties.
City Council last month approved expanding the SID beyond the downtown business district, where it was started 20 years ago, to include commercial properties throughout the city. Citizens in attendance were mixed on the measure and those who questioned it were unclear how the funds would be spent or what impact it would have on their properties, which previously were not included.
The SID typically generates about $130,000 annually and the new budget has not yet been determined by the Rahway Arts District, which sets the SID tax rate. The budget is expected to be in the range of $600,000 to $700,000, according to city officials, and will expand current programs, provide services that might go above and beyond the municipal budget, and market the city as a whole. For a look at how the Arts District spent its money in recent years, here are its most recent tax forms, for 2012 and 2011.
Owners of the 138 properties already in the SID likely would see some reduction in their SID tax — large compared to the SID tax (-14.5 percent) but small as compared with overall tax bill (<1 percent), and actual dollars, for many anyway. For example, RSI Bank is one of the largest assessed properties, at almost $2.9 million, and its SID tax bill would drop some $1,500 — from $10,164 to about $8,687. For more modest assessed properties in the current SID, the reduction would be almost 15 percent, ranging from $30 to $300 – again, before taking into account any other tax inreases.
Raffio Giacobbe, who owns several properties in town including one in the existing SID, spoke out against expansion of the SID last month. His property at 75 E. Cherry St. (Cherry Street Mall) had a property tax bill of $36,635 on an assessment of $590,500, as well as a SID tax bill of $2,073. The SID tax on that property would decline to about $300.
However, also among his company’s property holdings is one of the highest assessed properties along the western St. Georges Avenue corridor. The Power & Fitness building at 280 St. Georges Ave. is assessed at $1.175 million, yielding a property tax bill of almost $73,000 but was not in the SID last year. Based on the anticipated tax rate of $0.30, the property would pay $3,527 into the SID that it did not previously.
Chamber of Commerce President Andy Baron suggested to the City Council that the governing body consider creating separate SIDs for different commercial districts, like St. Georges Avenue and Routes 1/9. No word on whether that was ever considered. City Administrator Cherron Rountree said the SID proposal evolved from general discussions about downtown initiatives and moving the city forward but it’s unclear where or when exactly those occurred. A review of minutes from most of the Arts District’s meetings in 2014 (January, March, May, and September) didn’t reveal any discussions about the topic.