City Property Values Down a Quarter-Billion Dollars in One Year. Tony Mack: Hooray!!

What? What’s this about a Quarter-Billion Dollar loss in property values? And, you say Tony Mack thinks it’s great? WTF?

That’s right, even though not in so many words did he say that. But yesterday, in a made-up photo opportunity and desperate cry for attention called a “Biennial Review Press Conference,” Trenton Mayor Tony F. Mack cited several statistics of the city’s economic performance that he said proved the City was “heading in the right direction” under his leadership, a phrase he’s been using since his State of the  City address in March. I think they show a City in freefall, and financial catastrophe for anyone living and working in Trenton.

You mentioned a Quarter Billion Dollars!

I’ll get to that. I have to explain a few things first. I wasn’t at the Mayor’s Press Conference, but the City uploaded to its website the Power Point presentation Mr. Mack used to make the case that he and his colleagues have been doing a heckuva job since July 2010. You can read over the whole thing, if you like. It’s full of lies, half-truths and exaggerations intended to make you believe that the last two years turned out very different than the months you actually experienced.

I will just focus on one slide, on Page 8 of the presentation, labeled “Finance Department” explaining his accomplishments in the City’s Finances.

I don’t see a Quarter Billion Dollars!

Patience, for a short while, please. Each of these bullet points are problematic and represent no positive accomplishment for this Mayor. The first couple can be discussed briefly.

The famous “inherited $55 Million deficit” that was dumped by Mean Old Doug Palmer into Mack’s lap? Once again, let’s review: about $41 Million of that was caused by Governor Chris Christie when he canceled the Capital City Aid program that had supported Trenton’s budget; it was later replaced – at a far lower level – by Transitional Aid. The other $14 Million was the result of the defeat of Mayor Palmer’s effort to sell the suburban assets of Trenton Water Works. Palmer plugged $14 Million of proceeds from that sale into the 2010/2011 budget, which disappeared. If Mack “inherited” a budget deficit, he should blame Chris Christie and you and me.

Submitted a balanced budget for the current fiscal year? Yes, but all municipal budgets must be balanced at year-end. They always have been.

The reduction of the City’s workforce by 276 employees? Sadly, yes. Nearly half of that reduction came from the police force. We are seeing the results of those layoffs every day. I wouldn’t exactly laud that as an accomplishment. But it is funny that for all the layoffs we’ve seen – and many more that may come – there’s always room to hire friends, relatives, “special friends” of relatives and other hangers-on to fill jobs that seem never to go to anyone on the city’s employee recall list! I wonder why that is.

Hey, back on track! The Quarter-Billion??

Sorry, I digress. The next three bullet points are the meat of the Mayor’s Financial Argument. First, “The City’s ratable tax base increased from $1,980,295,615 in 2011 to $1,984,535,097 in 2012, an increase of over $4,000,000.”

This is laughable. An increase of $4,000,000 represents a percentage increase from year-to-year of only 2/10ths of one percent. That’s a rounding error. That’s flat. That’s treading water, and just treading water when you are a drowning man doesn’t do you any good. Touting a $4,000,000 increase is a joke.

But wait, This was supposed to be a “Biennial” review. Why just look at the one-year increase from 2011 to 2012? What’s the two-year performance?

Oh, I got your mind off the Quarter-Billion for a second! Good. This is important stuff! The ratables tax base is probably the single most important statistic about a city’s health. It determines, in New Jersey, how much of a town’s government can be supported by its tax base. In Trenton’s case, that’s long been a pathetic number, and has only declined over the last several decades.  Anyway, in 2010, the city’s ratables tax base in 2010 was $1,983,835,190.

That means that the “Biennial” change in the city’s tax base under Mayor Mack has been only net $700,000, a measly 3/100ths of one percent. That is worse than treading water; that is drowning! In the first year of the Mack Administration, ratables actually DECLINED by over $3.5 Million. Some performance.

The Mayor’s next “accomplishment” listed is the decline in the assessed value of Non-Taxable property over over $18 Million from 2011 to 2012. I don’t know why that’s supposed to be a good thing. I guess the mayor and his colleagues think that more taxable ratables are good and non-taxables bad. Only in a certain sense, though! You want to have more taxables than non. obviously, to have a healthy economy. But non-taxables generally mean institutions and organizations that provide positive services to the community: government, yes; but schools, museums, hospitals, and churches, too.

The Mayor is applauding that the assessed value of those services declined in one year by $18 Million in one year. My guess – strictly a guess – is that such a big swing from year to year must be at least partly caused by a change in the assessed value of Capital Health’s Mercer Campus in the West Ward, after its closure. Yes, that property didn’t generate property taxes. But there was significant economic activity at that site. Employees paid, patients served, and convenient health care available to thousands of neighbors in the area. That’s gone now.

The loss of something like Capital Health is something for the Mayor to take credit for? That’s exactly what he did yesterday. Mind boggling.

HEY! YOU’VE BEEN TALKING ABOUT A QUARTER BILLION DOLLARS HERE! NOT 18 MILLION. PUT UP OR SHUT UP, ALREADY!

Of course, you’ve been patient. Now we come to the last bullet point. Follow closely.

“The ratio to true value increased from 65.70% in 2011 to 72.20% in 2012, which means properties are being assessed closer to 100% true market value.”

There! It’s in that seemingly innocuous sentence. Here’s how.

The “ratio” being discussed is the ratio of Assessed Property Value to Actual Market Value. Is it good to be closer to 100%? The quick answer is “Sometimes,” but that’s not important today. Let’s look at that swing from 2011 to 2012.

Mathwise, the “ratio” is calculated by dividing Assessed value to Actual Value. For 2011, the calculation would look like this:

$1,980,295,695/Actual Market Value = .6570

And for 2012, the calculation would be

$1,984,535,097/Actual Market Value = .7220

Don’t see it yet? Look at the assessed Value numbers. They are almost identical, only 2/10ths of one percent apart, as described above. Yet the ratio swings by a very significant amount. Going from 65.7% to 72.2% in one year is huge.

OK, if Assessed Value remained flat, what caused the big swing in that ratio?

That, my friend, is the Quarter Billion Dollar Question! The answer is: Actual Market Value declined. In a big way. It tanked. From 2011 to 2012 the Actual Market Value of all commercial and private residential property declined by nearly 10 percent, or One Quarter of A Billion Dollars.

Mayor Mack used that fact, and those figures to calculate his “ratio.” He conveniently buried the lede by neglecting to state that assessed valuations are converging with Market Values because Market Values are going into the toilet.

Yikes! That’s quite a claim! Prove it!

OK. Here is where the State of New Jersey has provided Property Tax information for every municipality in the State, from 1998 to 2011, in the form of Excel Spreadsheets. These sheets include information for what is labeled “Calendar Year Equalized Value,” the closest one can get to an estimate of Actual Market Value without actually slapping price tags on every property in town. These documents, or something very like them, had to have been used by the Mayor and his colleagues to prepare their argument.

What do these documents show? In the spreadsheet for 2010, cell AF296, the Equalized Value for all taxable property in Trenton is listed at

$3,019,536,058

For 2011, that figure, cell AI296, dropped to

$2,742,791,711

The year-on-year decline is

$276,744,347

Wow. That’s OVER a Quarter Billion Dollars!

Yes, yes it is.

This single figure has a greater impact on every other fact of life in the City of Trenton, for every single one of its people, than any other statistic. This one-year 9% plummet in property values won’t surprise anyone who sees the forest of “For Sale” signs in this town; anyone who can’t sell their house; anyone under water on a mortgage; anyone falling behind on those under water mortgages.

This figure simply aggregates and totals all of the misery and pain being felt right now by Trentonians.

Mayor Mack and his colleagues must know the scale of the economic wreckage endured by the City during their term. They had to use these numbers in order to calculate their ratio, and then they patted themselves on the back as if it was a good thing!

Tony Mack got up before an audience yesterday and put all these facts out as major accomplishments, and proof that he is taking this city in “the right direction.”  That pisses me off.

I know Tony Mack isn’t single-handedly responsible for a Quarter-Billion Dollars in Property Values going off to Money Heaven. But he is looking at all the same financial numbers as I have, and he sees Good News!!

I cannot comprehend that. Through his presentation yesterday he has demonstrated one more time that he is either clueless as to the implications of the scale and speed of this decline and ineptly staggering around from self-congratulatory photo op to photo op; or he is acutely aware of the true state of things and trying to gloss over the problems or continue to blame them on naysayers and his predecessors. Either way, he is hopelessly way over his head in a time of financial crisis the likes of which we have not seen in our lifetimes.

Every day he leads us further into the abyss with a smile and wave. God Help Us.