West Windsor is trying to determine if its businesses are paying their fair share in taxes.
By: Gwen Runkle
WEST WINDSOR After introducing a municipal budget with an 18.5-percent hike in property taxes this week, township officials are scrambling to find ways to cut, scrimp and save.
But while a study by neighboring Plainsboro Township indicated that such a large increase in property taxes may be due, in part, to the township’s commercial properties being underassessed, officials are not ready to jump to any conclusions.
"I don’t think anything we do should be a knee-jerk reaction to a memo from another municipality," said Township Councilwoman Kristin Appelget. "But we are studying the situation and it is something we need to get done by the end of the year before we go into the next budget cycle."
Council President Alison Miller agreed.
"We shouldn’t push through a reassessment, since it could not affect the tax rate this year," she said. "But a change in assessments could help boost the surplus next year and affect the tax rate next year as well."
According to Plainsboro’s study, which was completed in December 2000 and conducted by the assessment firm of Bulchalski, Reynolds and Brodowski of Freehold, West Windsor is missing out on considerable tax revenues because its office, retail and hotel properties "appear to be significantly underassessed."
Office assessments appeared to be $40 per square foot lower than area market value, retail properties 44 to 60 percent lower than the market value and hotel properties at least 40 percent below market value, according to the study.
And if commercial properties are significantly undervalued, that means the township gets less money from commercial ratables, adding to the load residential taxpayers have to carry, the study concluded.
Through her own research, Councilwoman Jackie Alberts said she, too, has found "discrepancies" between property assessments and market values.
"I have not seen a consistent pattern on our commercial ratables," she said.
"We definitely need to look into the matter."
Currently, the township’s tax assessor is working with Mayor Shing-Fu Hsueh’s eight-member Property Tax Task Force to look at commercial assessments in conjunction with a review of the overall property tax system to determine what can be done at a municipal, county or state level.
The group had its first meeting May 16.
"We can’t just say we’ll go ahead and reassess tomorrow," Mayor Hsueh said. "But we have taken some initiative. This is not going to happen overnight."
Ms. Appelget also cautioned that reassessing property does not yield "pure savings."
"It can cost quite a lot, tens of thousands of dollars, to reassess," she said. "But if, in the long run, it is deemed to be appropriate, then it needs to be done."
Township Administrator Barbara Evans has attributed the need for the large tax-rate increase to a lack of revenue to offset an increase in fixed costs.
Fixed costs such as insurance and utilities are up about $860,000 in total while revenues have significantly decreased, she said.
Because of poor economic conditions and falling interest rates, the township has $824,000 less in surplus than it did last year, she said.
In addition, revenue from the imposition of court costs and fines is down $165,000, grants received are down $117,000 and there were no bidders for the sale of a liquor license that was expected to bring in $565,000, she said.
On Monday, the Township Council introduced a $25.3 million municipal budget for 2002.
It represents a 3.5-percent increase over last year’s $24.4 million budget and calls for a tax rate of 47.4 cents per $100 of assessed property value a 7.4-cent increase, or 18.5 percent, over the current rate of 40 cents per $100 of assessed value.
At the introduced rate, the owner of a home assessed at the township average of $250,000 would pay $1,185 in municipal taxes $185 more than last year.
A public hearing on the budget is set for June 17.