Vol. LXV, No. 14
Wednesday, April 6, 2011
The Joint Revaluation Study Commission recently published its findings in a report that called the 2010 revaluation in Princeton not without flaws, but conceded that it would be difficult to challenge as improper in its methods or unreasonable in its results.
The document suggests that the revaluation results should stand, but offers up modes of mitigating their impact on taxpayers who would otherwise be forced to leave their homes.
The commission is comprised of Borough and Township residents and liaisons from both governing bodies who were tasked with determining all avenues of property tax relief for those suffering from an increased tax burden, reviewing the New Jersey state laws for recommendations as to revisions, aggregating data and opinions from residents regarding the revaluations, and reporting back to Council and Committee.
In their findings, the commission notes that appraisals are not a science, and goes on to say that mass assessments are still more problematic in that they necessarily substitute statistical sampling techniques for the more labor intensive examinations conducted by most appraisers.
Due to the inherent subjectivity of the appraisal process, the limitations of the mass assessment process, and the constraints imposed by New Jersey law, the report concludes that the revaluation would not be easy to contest.
The necessary implication of that, on the whole was that the revaluation was done reasonably accurately and on the whole found that the properties were assessed at fair market value, Borough Council commission liaison Roger Martindell said in a telephone interview.
Beyond individual owners facing inflated property tax rates or discrepancies within and between neighborhoods, one concern stemming from the revaluation was the fact that the lower-priced homes generally saw their tax rates increase, whereas the higher-priced homes in Princeton saw a decrease. This trend suggested an overall shift in the property tax burden toward the less expensive homes in town.
Last year, residents questioned the shift, pointing out neighborhood studies in public meetings, and challenging overall methodology. As a result of the challenges, the joint commission was created to further investigate revaluation concerns.
Simultaneously, an autonomous citizens organization called Princeton Fair Tax-Revaluation Group was also doing studies within local neighborhoods and analyzing data (see Jim Firestones letter in this weeks Mailbox). They are considering a lawsuit to address the revaluation process and results.
Regarding the shift in the tax burden, Mr. Martindell said that the commission didnt address the reason why and was not charged with doing so. He suggested that the market and economic climate at the time of the assessment led to the distribution shown in the revaluation.
The commission met with the municipal tax assessor Neal Snyder, the County Tax Administrator Marty Guhl, the municipal bond council, the affordable housing council, municipal attorneys, and members of the public, according to Mr. Martindell.
After a comprehensive review of the situation, it found a number of things that could be improved, and a number of anomalies that do exist, but as a whole came to the conclusion that the revaluation was not done inappropriately or on the whole inaccurately, Mr. Martindell said.
Recommendations in the report include actions that homeowners and local officials can take to clarify the assessment process and make the appeals process less intimidating.
Mr. Martindell called attention to a few procedures that could mitigate the revaluation effects on the property owners who were hardest hit. They include issuing bonds to low and moderate income persons, so they may voluntarily defer their tax obligations at a modest cost that would not hurt the municipalities or other taxpayers, but would enable qualified volunteers to decide to stay in town. The elderly or those on a fixed income could draw down on the equity if they chose.
Acknowledging that these are all tinkerings at the edges of our real estate tax problems, Mr. Martindell suggested that the skyrocketing property tax rate was a statewide problem that Princeton cant fix by itself and is something in need of a major overhaul.
Reviewing tax-exempt organizations properties to determine the nature of their exemptions was another possibility raised by Mr. Martindell, along with the idea that Princeton University and other tax-exempt organizations should contribute more money to the local municipalities via their payment in lieu of taxes (PILOT) contribution.
The reduction of interest rates on delinquent property taxes was suggested in the report, as was a phasing-in of tax increases. The document noted that more frequent valuations would likely lessen the pronounced changes in tax burdens experienced by many residents in the way of the recent revaluation.
The Affordable Housing Trust Fund and deed-restricting properties is another strategy by which to maintain tax rates.
While Mr. Martindell urged addressing the issue at the state level, the report noted that the commission discussed potential amendments to existing legislation as a means of shielding taxpayers from the escalating assessments and property taxes, or, alternatively, making the appeals process less hostile and intimidating.
Findings will be discussed before both Borough Council and Township Committee in upcoming open public meetings. Check the municipal websites for agendas and dates.
For the full text of the Revaluation Report, visit cfatprinceton.com/reval/report.html and for the latest news concerning the Princeton Fair Tax-Revaluation Group, visit princetonfairtaxreval.org.
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