Changes in property value affect school aid County Tax Equalization and distribution

EQUALIZATION ORIGIN

State aid equalization for the purpose of school is the process of determining the real value of all properties in each of the 566 districts of the State Prosecutor. This figure is determined by an evaluation program for the analysis of sales. The added value of real estate and property values of second-class railway and the estimated value of the assets from the assessment of local affairs, is known as "boundassessment.

The stabilization program was introduced in 1954 when a very extensive program of state aid for education has been approved, with the assignment based on "equalization of assessment, rather than on taxation. Corresponding contributions at a later date as key element of new formulas created by the legislature, from time to time to calculate the distribution of funds for aid to state schools.

The PSA is intended to ensure stabilityof the total market value of a common over time. This is an important goal for the sake of stability, predictability and fairness in municipal finance and the school. It aims to fully reflect changes in market value each year, and then make assessments in all municipalities to a common standard. On the other hand, is not obliged to change, "too" to mean the union of the real value of two years in order to avoid large fluctuations in municipal securities equaled.These two years on average, is used to maintain the stability of municipal finance and education.

The sales program RATIO

The index of sales of the program is based on a comparison of the values for the evaluation of real estate parcels that were sold, and that the acts were recorded, with their market values. It is assumed the valuations of the goods sold must be representative of the practice of assessing the tax district. Thus, if the evaluationproperties sold on average 90 percent of the selling price, it is assumed that all similar properties in the district have been assessed taxes from an average of 90 per cent of their actual value or market value.

Shared responsibility 'TAX

The responsibility of the sales program is based in the Property Management Section of the division of taxation. The methods to collect sales data and analysis have been developed by this article, but the success of the processrequires the cooperation of all the descriptions of each assessor county and local taxes. The results of this section to a table of equal value, is certified by the director of the division of taxation on 1 October each year, the Commissioner of Education to state aid for schools and provided to each board of county taxation purposes of allocating costs of county government and school districts that comprise more than one tax district. Thiscalculate the values of equalization is one of the most important tasks of the division of taxation. The result of the calculation are broad implications for the budgetary situation of the municipalities and school districts in the state, and hence (indirectly) the welfare of all residents of the state.

SAMPLE

The value of each compensation program properties, including that used for state school aid, depends on the extent to which the sampleevaluation reports are representative of all property valuations in the area of taxation. Although it is generally accepted that a large sample size is preferable to a smaller sample, is not necessarily true in all cases. The evidence refers to the randomness of selecting a way of representing all regions of the district attorney and all the features of the property tax roll in the tax district. The implied value of the sample requires the information currently availableno centralized tabulation "sales usable. One way to increase the randomness in the process of estimating market values is to use the sales data for a period exceeding one year. The Stabilization currently in force when the market for estimated values of average current and the previous calculation of stabilization. More specifically, the present system, the average values of two years each, calculated using the value of one yearusable data on sales.

Inflation / deflation

The problems of inflation or deflation ensures the stabilization --- many problems. State Government can not expect to moderate the force of inflation affecting the changes in the selling price of the sale price of properties to determine the ratio of sales evaluation is used in the matching process.

However, underlying the use of evaluation and sales for stabilizationwas a tacit belief that most securities are largely stable from year to year. As evidence, the rule is based on a process of stabilization is based on this assumption. Most of the changes in value for filing must be gradual, rather than large or sudden.
Causes of increase in house prices

Many of the forces of demographic change, significant benefits in the results of the stock market of capital, the desire to live in the municipalities of the bestschool systems, trends in personal preferences for larger homes, an increase in real personal income, and so on, are operating in real estate prices. All these desires of the people increase the demand for housing and jobs and play. And do not make more land on which to meet these needs. Therefore, the increase in demand for space will remain relatively strong influence on land prices. Moreover, the prospect of inflation prompts some investorsseeking protection against inflation for the purchase of the property. Although inflation, while inducing other owners when the sale was the normal action, so hyper-inflated prices for the sale of property. Historically, inflation among many, ownership of land and buildings has preserved the real value of money and other property that may have lost much of its value. Our recent history seems to confirm the departure. Within a specific locationchanges may be substantially different. These specific changes can create significant fluctuations in price people are willing to pay for goods and especially of the territory.

State Government must learn to live somehow, in a process of stabilization, which meets annually at a rate of change of values in the past was rejected because the amounts in question seemed too small to worry about.

Perhaps a way to stabilize the annual SAP would be twice the weight ofthe true value of the previous years, when the "Hyper Land exchange factor is one. A factor of one means the percentage change in estimated value of land throughout the state grew at a growth rate twice the rate of change of 'CPI state in a given year. During the period 1971-1999, a period of 29 years, a factor of one to ten times occurred in New Jersey. I remember that 43% of the index of consumer prices composed of a dwelling. The periodic adjustment of the stabilization process could be usedstabilize the value of all the municipalities in the state in time. This is an important goal for the stability, predictability and fairness in municipal finance and the school. Eliminate the sudden increase in equalization reflects periods of hyperinflation, as reflected in land prices and then bring the values of annual compensation in all municipalities in a stream more stable. Preventing sharp fluctuations in municipal securities tied one yearTherefore, the stability of municipal finance and the school could be preserved. Perhaps many suburban and rural municipalities have a county tax costs are rapidly when sharing double digit increases of the earth. Other towns of dollars could lose state aid because the school property to become rich in no time. Stability has many friends in local public finance.

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