Anne Waldron Neumann of Princeton
Princeton University Vice President Robert Durkee wrote recently “that Borough taxpayers benefit financially from the University’s presence,” and that “This finding is consistent with the fact” that “Princeton Borough taxpayers pay the lowest tax rate of any community in Mercer County.”
Does “lowest tax rate” mean less in total property taxes?According to “New Jersey by the Numbers,” the Star-Ledger’s online database, if you’re an average Borough resident, your house is assessed at $682,554 (2006 figures); your household income is $185,299; and your property tax is 6.82 percent of that income, or $12,636.
This $12,636 average means that Princeton Borough is in the 98th percentile of all New Jersey communities for property tax paid per homeowner. That is, homeowners in only 2 New Jersey towns out of 100 pay higher taxes than we do. This tax burden weighs especially heavily, of course, on Princetonians with household incomes under $185,299.
Why are borough property taxes so high? Here’s one reason. Princeton University, a nonprofit, isn’t taxed on its educational property. But more than 70 percent of the university is in the borough, and the university owns about a third of the borough, including substantial commercial property. Nevertheless, the university pays only 9.5 percent of the Borough’s property-tax receipts (4.9 percent in Princeton Township). If Princeton University paid the equivalent of tax on all its Princeton holdings — about $30 million more annually — borough taxes would drop 24 percent and township taxes, 15 percent.
Though the university isn’t legally obligated to pay the borough more than it does, university spokespersons have suggested that the university would volunteer more in lieu of taxes if only the borough spent more wisely. Yet “New Jersey by the Numbers” ranks the borough in New Jersey’s 51st percentile in per capita cost of municipal government. That is, we’re average: out of 100 New Jersey communities, 50 spend less per capita than the borough does, and 49 spend more. How can the borough jump from 51st percentile in per capita cost of municipal government to 98th percentile in cost of municipal government per homeowner?
Why are our taxes so high?
Here’s another reason. Our population is 13,590, of whom 41 percent are between the ages of 18 and 24, largely university students. Meanwhile, borough homeowners number only 2,041. This ratio of residents to homeowners is far higher than in most New Jersey communities. It means that municipal costs burden borough homeowners far more than average.
From 51st percentile to 98th: should the university help reduce that discrepancy?
”The university’s investment policy is to support [its] charitable purposes,” wrote university President Shirley Tilghman: “scholarship, teaching, research, and service to others.” If the university isn’t legally obligated to pay the borough more, might service to others imply some other obligation?
Residents can discuss these questions at a presentation hosted by Princetonians for Fairer Taxes, Sunday, April 26, 4-6:00 pm, at the Suzanne Patterson Center, One Monument Place. There’s an online petition at:
www.petitiononline.com/PCDO2008/petition.html
Anne Waldron Neumann
Princeton

