Revaluation Questions Outnumber Answers

Dilshanie Perera

The property tax revaluation in Princeton Borough and Township stands to affect all households, with homes being assessed at new values, which in turn directly impacts the share of the municipal, county, and school tax rate for which each homeowner is responsible.

“Why has the John Witherspoon neighborhood been hit so hard? Why are Princeton University land values lower than expected” wondered Council member Roger Martindell.

At a recent meeting, he and other Borough Council members called for a closer look at the assessment methodology, particularly in light of the recent disclosure by Mercer County that they would be using a formula to adjust Borough and Township property values in order to determine what share of the County tax rate would be apportioned to each municipality.

This news surprised the elected body, given the recent revaluation, which is supposed to show 100 percent of market value (different from market price).

The ratio the County plans to use is at 86 percent for homes in the Borough and 92 percent for homes in the Township, suggesting that the actual market value is the value on the green card mailed to homes divided by 0.86, Borough Council member David Goldfarb noted during the meeting.

“We were forced to do a revaluation because the ratio had fallen below 50 percent, but in the very first year of the revaluation, we’re between 85 and 86 percent. That’s a real concern,” he added.

Mercer County Tax Administrator Martin Guhl explained in an e-mail that in a revaluation year, the County does not use the prior year’s ratio to determine tax rates for each municipality. Instead, they use something called the “Page 8 Formula,” which compares the new ratable total with the prior year’s true value.

During a telephone interview, Mr. Goldfarb said that the methodology “just doesn’t sound right.” In previous years, the ratio was applied uniformly through the entire community, and this year the “‘revaluation process should have resulted in values that were more fair than in the preceding year. Instead, they apply this ratio so there is no change. The net result is that we’re paying significantly more County taxes than we would otherwise.”

Mr. Goldfarb worried that the decision suggested that “those numbers are good enough to allocate the Borough tax, or to allocate the County and school taxes among people living in the Borough, but among municipalities within the County, it’s not.”

Administrator Robert Bruschi reported that the Borough’s Finance Committee will be meeting with Mr. Guhl this Friday to clarify some of these questions. At that time, elected officials will decide whether a public meeting will be scheduled prior to May 14, which is the last day for homeowners to appeal their property tax assessment to the County Board of Taxation.

Both individual and systemic concerns regarding revaluation have spurred questions and frustration among residents.

Many are worried that the revaluation data shows a trend throughout the Borough and Township that shifts the tax burden from higher-priced homes to the lower-priced homes, suggesting an inequitable distribution of the burden or an imprecise artifact within the calculations.

Mr. Goldfarb said that the moment at which homes were assessed, namely, October 1, 2009, could reflect any distortions within the real estate market onto the numbers calculated by Appraisal Systems, the company hired to do the revaluations.

“Their criteria were established consistent with the law,” Mr. Goldfarb added, noting that they “have some good data” and that “they did a reasonable job overall.”

The kind of action the Borough may take given the results of the revaluation is basically “limited to a lawsuit against the entire process,” but there is “little chance that such a suit would prevail,” Mr. Goldfarb said. “In every revaluation there are people who are unhappy. The system is designed to take the political leadership out of it.”

Longtime Birch Avenue resident Leighton Newlin called for greater transparency, and a thorough explanation of the apparent trends of the revaluation. “Part and parcel of the American judicial system is discovery,” he said, adding that “somebody has to adequately explain the methodology.”

Characterizing the shift of the tax burden as one that is proportionally greater on the homes of the Witherspoon-Jackson neighborhood, Mr. Newlin called the move “unprecedented,” and was concerned that families, many of them African American and Latino, would be forced to move out of the area given the escalating costs.

“A community without diversity is a community void of culture,” he cautioned.

The deadline for residents to appeal their tax assessments to the County Board of Taxation is May 14. For more information, visit http://nj.gov/counties/mercer/commissions/tax.

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