PLUMSTED — The first steps toward a reassessment of all properties in Plumsted were approved at the Feb. 1 Township Committee meeting, setting in motion a plan that was initially discussed in December.

With the number of property tax appeals increasing annually due to the continuing struggles in the real estate market, the proposed reassessment of all properties in Plumsted is expected to lower the number of appeals in the coming years, according to municipal officials.

A township-wide reassessment will place the current market value on each property. The assessed value of a property multiplied by the tax rate set by various taxing entities (municipality, school district, county) determines how much property tax the owner pays.

If the assessed value of a property falls out of line with current market rates, the property owner can appeal his property’s assessed value and if successful, can see his property tax bill decrease.

However, if the municipality or other taxing entity has to continue collecting the same total amount in taxes, one person’s successful appeal means all other property owners must pay more to make up the difference.

Municipalities may be responsible for paying back property owners who have paid too much in taxes, and that expense can take a bite out of a municipality’s budget.

“We had about 200 [property owners] who appealed their taxes [last year],” Mayor David Leutwyler said. “When we do the reassessment, it will bring everybody to a level playing field.”

Plumsted wound up owing property owners about $300,000 for successful tax appeals and had to bond for a significant portion of that amount. The township ultimately has to pay back the bonds.

With the recent approval of the resolution by the committee, the township tax assessor will begin the process that will eventually lead to the reassessment. Leutwyler said a consultant may need to be hired to assist local officials with the reassessment.

Ultimately, he said, assessing all properties at the current market level means that fewer resources will be spent in the appeals process.

“Instead of going through 200 tax appeals every year, we’ll do this reassessment to bring things back in line,” Leutwyler said, adding that the reassessment should be completed by the end of 2012, with any resulting changes to be seen on a property owner’s 2013 tax bill.

In other committee news, a resolution calling on the New Jersey Board of Public Utilities to reject a rate increase proposed by the New JerseyAmerican Water Co. was passed, giving support to a sentiment expressed by a number of municipalities.

The issue, according to the resolution, stems from a recent $95.5 million rate increase proposed by the utility. The amount requested would represent an approximately 20 percent hike.

“Down at the county, they looked at [the increase] and felt that maybe it’s not needed — maybe not as high as it is — so we wanted to show our support,” Leutwyler said. “We just wanted to go on record in saying the rate increase really isn’t necessary.”

The resolution notes that the utility has already benefited from a compounded 51 percent rate increase since 2004.

According to officials, the New Jersey American Water Co. serves about 400 customers in Plumsted, mostly in the downtown New Egypt section.