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Communities recovering from Sandy find tax hike fears unfounded

Visitors relaxed at Point Pleasant Beach, N.J., which was hit by Sandy last fall. Big tax hikes did not occur as some feared.

Wayne Parry/Associated Press

Visitors relaxed at Point Pleasant Beach, N.J., which was hit by Sandy last fall. Big tax hikes did not occur as some feared.

MANTOLOKING, N.J. — With all the fears that Hurricane Sandy created, here’s one that never materialized: huge tax increases to make up for property destroyed along the coastlines of New Jersey, New York, and Connecticut.

Waves of federal aid, some strategic borrowing, lowered property values, and surplus accounts helped many shore communities avoid having to raise taxes drastically to compensate for lost tax revenue.

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There had been concerns about what could happen next year, when the tide of emergency storm aid will have receded and full rebuilding will still elude some neighborhoods.

The thinking was that because shore towns had lost so much taxable property in the Oct. 29 storm, governments would have no choice but raising taxes on surviving structures to make up the difference. But that was before Congress approved $60 billion in Sandy relief, most of it for New Jersey and New York.

‘‘We were all concerned there would be a big tax increase,’’ said Ray Ryan, a resident of Mantoloking, a Jersey Shore town where virtually every one of its 521 homes was destroyed or damaged. ‘‘But we are delighted it didn’t. It makes absolutely wonderful sense when you consider the storm aid that was available.’’

The affluent borough adopted a 14.6 percent increase in the municipal tax rate. But because the storm lowered property values and because of an influx of storm recovery aid and borrowing, most municipal tax bills will actually be lower this year.

The budget calls for $5.6 million in spending, up from just over $4 million last year. But the average tax bill will actually be 23 percent less than last year because storm damage caused property values to plunge by about a third.

For example, the owner of a house previously assessed at $1 million and now worth $670,000 because of storm damage will pay $1,398 in municipal taxes, down from $1,817 a year ago.

The figures do not include school or county taxes and are the only ones over which municipalities have direct control. Homeowners in many towns may still see an overall increase in taxes because of school spending or other causes, but the doomsday scenario many municipal officials had feared is not happening.

In community after community, municipal taxes are either staying the same this year or going up only very slightly. Many towns had to front out-of-pocket in the fall and winter for cleanup will eventually be paid back by the US government by as much as 90 percent.

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