Board of Taxation mandates revaluation of East Windsor for the 2008 tax year
By: Kerri Williams
The Mercer County Board of Taxation has mandated a revaluation of East Windsor for the 2008 tax year, which will likely cost more than $600,000.
The board did so unanimously at its May 1 meeting, at which time a Hightstown revaluation also was ordered.
Since East Windsor has more properties, with many of them spread out over a larger area, the township can anticipate a much larger price tag than the borough, according to county Tax Administrator Martin Guhl.
Neither Mr. Guhl nor East Windsor officials wanted to speculate on the cost of having a private company conduct the revaluation. But using last year’s average of $77 per taxable entity, supplied by the state Department of Treasury, the process would cost the township $559,100 for its 8,300 properties.
Hightstown officials have estimated a revaluation there could cost as much as $200,000 for its 1,600 properties.
Because the revaluations have been mandated by the county, both municipalities can spread out the cost over a five-year period.
East Windsor was chosen for a revaluation because it hasn’t had one in more than 15 years, Mr. Guhl said. The last revaluation took place in 1989, with a smaller, in-house reassessment in 1991. Currently, assessments are below 50 percent of fair market value when they should be at full value, he said. The assessments also lack uniformity, with some being closer to 25 percent of fair market value and others near 75 percent, he added.
While many property owners get concerned when they hear about revaluation, East Windsor Tax Assessor Rick Kline said, "They shouldn’t worry. The budget doesn’t change."
Because properties will go up in value overall, the tax rate will likely be adjusted downward.
"The biggest misconception is that people think because the assessment goes up, their taxes go up," Mr. Guhl said. "Or they think it’s a ploy by the town to raise money. None of it is the truth."
In fact, the revaluation shifts the tax burden, with some property owners paying more taxes, others less and the remainder paying the same.
A general rule of thumb is that taxes rise for one-third of property owners, go down for another third and stay the same for another third. But the ages of homes are a significant factor.
The first step for East Windsor in complying with the order is to submit a full set of tax maps to the state and have those approved. Mr. Kline said he is not sure how long that process will take. Next, the town will send out bid requests to revaluation companies certified by the state.
In Hightstown, Tax Assessor Ken Pacera has estimated it would take about four or five months to complete inspections, followed by an appeal period. Mr. Guhl said the timeframe should be similar in East Windsor, with more manpower being employed to cover the larger township.
"In the end, it should still be the same," he said.
Mr. Guhl added that the towns might want to consider hiring the same company because it could save some time in learning to assess properties in the area. But he does not think the municipalities would save money by picking the same firm.
"There may be a bit of an advantage, but not financially," he said.
Of the 13 municipalities in Mercer County, nine have either recently completed tax revaluations or have been ordered to conduct them, according to Mr. Guhl. During its May meeting, the county board also mandated revaluations for Princeton Borough and Township, which are required for the 2009 tax year.
Because very few companies are sanctioned by the state to perform revaluations, the cost to towns is getting higher every year, Mr. Guhl said. Since the biggest cost is manpower, the companies consider the size of the town and the distance between properties as well as the mix of residential and commercial properties, he added.
Hightstown may be at a slight advantage because many of its properties are close together, with employees able to walk easily from one to another, Mr. Guhl said. In some areas of East Windsor, assessors would have to drive a distance between properties.
Throughout the process, Mr. Guhl said the county board receives written updates from the municipality and the company hired to conduct the revaluation. The reports verify that the inspections are completed on time and that the payment schedule is appropriate.
Mr. Guhl hopes to avoid the problems that occurred during the most recent round of revaluations this year, when one company was handling the assessments for four Mercer County towns and became "overextended." The new assessments were supposed to be implemented in January but West Windsor was not ready until April, he said.
"We had real problems," he said.