The Edison Township Council reluctantly voted in favor of a resolution approving the return of close to $1.1 million in tax appeals.
“The system has to change,” Councilman Robert Karabinchak said during the Feb. 24 meeting.
Council members discussed the tax appeal resolution at length during the work session meeting two days earlier.
“This tax appeal period really hits home with me,” Karabinchak said. “This is only a small swipe of tax appeals that has happened in the last year, and it continues to happen.”
Residents questioned why most of the tax appeals listed on the resolution were for apartment complexes and multi-housing buildings.
“I’m appalled,” said resident Lois Wolke. “The only people not getting money back are the taxpayers in Edison.”
The resolution returns taxes in the amount of $1,092,512. The apartment complexes listed include Durham Woods Associates, which will receive $211,807 back in tax appeals; Parsonage Hill Village Associates, $72,081; Edison Village Associates, $24,573; Edison Square LP, $116,803; Millbrook Garden Associates, $480,993; and Greenfield Gardens LLC, $117,440.
Karabinchak explained that the tax appeals amount to another 1.5 cents on the tax rate that the taxpayers have to pick up, even if the budget does not indicate that.
“We as taxpayers have to pick up the difference,” he said.
The councilman said there is an increase in tax appeals every time there is a downturn in the economy.
“This will occur every eight to 10 years,” he said.
Karabinchak said residents should understand that the township has lost part of its tax base due to the appeals and the resulting lower assessed values for the apartment complexes and multi-unit housing buildings.
“This is why the tax structure physically went down,” he said. ”So these [complexes and buildings] are at the new assessed value of $26.5 million, and it carries on into the future. [Therefore] the burden falls onto the taxpayers to pick up the difference from this day forward.”
Karabinchak, also noting that there are tax credits that taxpayers will have to pick up, asked the council and administration to draft a letter to Gov. Chris Christie, state senators, assemblymen and county officials asking them for “some type of relief, especially in bad economic times, which is today.”
The councilman said he finds it odd when thinking about how easy it is for the owners of apartment complexes and housing buildings to simply hire an attorney to get a reduction in their taxes.
“Homeowners have to go to the county to prove their case by different means to get a reduction on their house value,” he said. “A commercial building just has to show that their income revenue stream has gone down. That’s it, and in bad economic times that is pretty easy.”
Karabinchak said the council and administration can offer several solutions in their letter. If the state Legislature can lower the structure of a property’s taxes based on income, then the taxes collected should be based on their income as it increases in the future.
“As their income stream increases, so does their tax revenue stream, so the burden stays on them,” he said.
The councilman also suggested that a cap be placed on the deduction of a tax appeal, and a limit be placed on the number of times a company can appeal its taxes.
“Make it only once in 25 years … so that these companies can’t take advantage of the town,” he said. “We literally receive hundreds of tax appeals; some we are losing and some we are winning.”
Councilwoman Melissa Perilstein said she agreed with Karabinchak’s comments.
“This is what is bleeding our township right now. … Out of 10 tax appeals, eight of them are from the same attorney,” she said. “I don’t want to point fingers; it [seems that if] one gets through, then it opens a sudden floodgate. … It has become its own cottage industry of sorts, and I don’t want to disparage the attorney who did these cases, but I just think it is something people should know.”
Perilstein said it is interesting to see the rationale of the commercial property owners. She said they have argued that they don’t have as many needs as a resident, who may use the school system and have more public safety needs, for example.
“What is interesting here is that eight of these 10 tax appeals were apartment complexes,” she said. “I would love to see an adjustment to how appeals are done, because they are definitely feeding into the “already very overstressed” school system.”