Tax assessor addresses revaluation controversy

Neal A. Snyder, Tax Assessor, Princeton
    I am the tax assessor for both Princeton Township and Princeton Borough. A revaluation has been implemented for tax year 2010 for both municipalities. The revaluation was performed by Appraisal Systems Inc. (ASI).
   The revaluation was ordered by the Mercer County Board of Taxation and approved by the director of the Division of Taxation for implementation for the 2010 tax year. The County Tax Board issued the revaluation order because the assessment pattern in the Princetons reflected disparate and stale assessments.
   ASI performed the revaluation in accordance with valuation standards and practices approved by the director of taxation and the County Tax Board. ASI has performed many revaluations over the past 30 years. It is a company that has been approved to conduct revaluations by the director of taxation in this state.
   The last revaluation performed for the Princetons was implemented for tax year 1996. The real estate market has experienced significant changes since 1996. There have been periods of significant appreciation of market values and, more recently, some contraction in market values due to the recession. Residential areas within the Princetons have been subjected to a variety of valuation trends.
   The goal of a revaluation is to establish equitable property values for tax assessment purposes that are reflective of current market values. Revaluations often result in a shift of the tax burden among residential neighborhoods and between residential and commercial properties particularly when the last revaluation was performed more than 14 years ago.
   During the winter and early spring of 2009/2010, ASI submitted notices to each taxpayer advising said party of the preliminary assessment of his/her property and inviting said taxpayer to a meeting to discuss the assessment. This informal review process allowed ASI and me an opportunity to further review and adjust the assessments where necessary. Following such further review, the revalued assessment list was submitted to the Mercer County Tax Board in late March 2010. The County Tax Board, pursuant to its statutory duty, further reviewed the list and certified the revalued tax list. Following such certification, further informal reviews took place with taxpayers that so requested. This procedure allowed for a further opportunity for me, with the assistance of ASI, to revise the assessments where appropriate.
   The end result for Princeton Township’s 4,902 residential assessments: 21 showed a decrease of over 30 percent; 821 showed a decrease between 10 percent to 30 percent; 1,047 showed a decrease between 1 percent to 10 percent; 127 showed "0" increase/decrease; 1,112 showed an increase of 1 percent to 10 percent; 1,275 showed an increase between 10 percent to 30 percent and 518 showed an increase over 30 percent.
   Once the tax list was certified by the Mercer County Board of Taxation, the only remedy for seeking a further change in the assessments was by means of a tax appeal filed with the Tax Board or Tax Court. The changes made by me following the certification of the tax list were implemented by tax appeals filed by the municipalities with the Mercer Tax Board. Tax appeals were also filed by taxpayers challenging their individual property assessments. Approximately 5 percent of the properties in the Princetons are the subject of tax appeals. Based on my experience and that of ASI, that percentage of tax appeals is normal for a revaluation.
   The best means of gauging the fairness of a revaluation is by comparing the new assessments to recent market sales. Such a market analysis has been prepared by my office based on recent sales data. Such data has not been fully analyzed to determine if all of the sales in the study involved "usable" sales. There may be sales that, for various reasons, such as foreclosures, estate sales, short sales and the like, should not be incorporated in a usable sales study. Notwithstanding said fact, a sales study has been prepared reflecting the following results:
   For Princeton Borough, 48 residential sales transactions that occurred between Oct. 1, 2009, and Aug. 2, 2010, were compared to the revalued assessments for the properties subject to the sales. This analysis resulted in an average ratio of 94.75 percent of assessments to (market) sales comparison. This sales data also reflected a coefficient of deviation of 7.31 percent. The coefficient of deviation measures the average deviation of each sale used in the study to the average ratio. A coefficient of deviation below 10 percent is deemed reflective of a positive level of uniformity. The coefficient of deviation for the Princetons prior to the revaluation was approximately 15 percent. The ratio for Princeton Borough for 2009 was 39.53 percent.
   For Princeton Township, 102 residential sales transactions that occurred between Oct. 1, 2009, and Aug. 2, 2010, were compared to the revalued assessments for the affected properties. This analysis resulted in an average ratio of 96.91 percent of assessments to sales (market) comparison. The sales data also reflected a coefficient of deviation of 6.55 percent. The ratio for Princeton Township for 2009 was 47.63 percent.
   This statistical study compiled from recent sales information reflects the best means of testing the validity of the revaluation in terms of proximity of assessments to the market and overall uniformity of such assessments. The ratio and coefficient identified herein present a positive and equitable revaluation program.
   As the assessor, I will be reviewing the assessments for both Princetons on an annual basis in order to determine appropriate adjustments from year to year if and when needed. The Legislature, with monitoring by the director of taxation and the County Tax Board, has provided me with the proper tools to make annual adjustments in order to maintain a fair and equitable assessment pattern for these municipalities.
Neal A. Snyder
Princeton
EDITOR’S NOTE: The sales data referred to by Mr. Snyder can be accessed online through the link "Appraisal Systems Revaluation Information" at www.princetontwp.org.