PRINCETON: Fair Tax group lining up to file lawsuit

By Victoria Hurley-Schubert, Staff Writer
   The Princeton Fair Tax Revaluation Commission, a group of citizens who are fighting the 2010 revaluation of the Princetons, are preparing to proceed with legal action to challenge what they call unjust assessments.
   The group is alleging the revaluation, conducted by Appraisal Systems Incorporated, was flawed and led to inflated land values and deflated home values. This, in turn, has caused smaller homes on small lots to see large increases in their property taxes — some as much as 60 percent increases — and larger homes to loose value and decrease in taxable value.
   Residents are puzzled over the skyrocketing of land values, which in some cases went up three or four times and how the assessment company came to the amount of the land value.
   ”There is enough evidence of failure on the part of ASI and the assessor and the township committee that they deserve to be brought to a conclusion that overcomes the clearly unfair redistribution of the assessment,” said Dick Reichart, a township resident whose assessment went up. He also found irregularities within his neighbors that ranged from 30 percent to 50 percent tax increases.
   ”I live in an area where some of these big McMansions they are talking about have resulted in very high assessments to the older houses that have not changed since they were built in 1959,” said Steven Frakt, former township deputy mayor. “I understand how a lot of it works, I sat on township committee when the last reval was done and I don’t remember so much concerned being raised. I’m willing to pay my fair share, and let’s find out what that is. If this is the process to make sure it was done properly, that’s fine.”
   At the beginning of the night, Jim Firestone, a founder of fair tax group, had 13 checks from people looking for answers; at the end of the session, 40 people lined up with checks to start a fund to begin the legal process. The group has $4,000 in savings to begin exploring a lawsuit.
   ”That means the money is there and the interest is there,” said Mr. Firestone. The group is still looking at ways to proceed. “If we don’t start the lawsuit, you get your check back,” he said.
   Members of Princeton Fair Tax have been using their own time and money to get as far as they have with the research and information collection, he said.
   A standing-room-only crowd of mostly seniors, gathered at Princeton Township Municipal Building to hear the latest findings from the group.
   ”In these hard economic times, for people’s taxes to go up all at one time is unconscionable and the people that have the money who can pay more, their’s went down,” said Angela Soucy, a township resident whose taxes went up 25 percent. “That’s like paying rent on top of a mortgage.”
   She had four private appraisals since the assessment by Appraisal Systems Incorporated, the company hired by the two municipalities to conduct the revaluation. The private assessments are all lower than the township assessment.
   The group also debuted a new, interactive map on their website, www.princetonfairtaxreval.org, that show how homes changed in value.
   ”People can go around town and take a look and go from place to place and understand your own neighborhood,” said Mr. Firestone.
   Suing a muncipality
   If residents took legal action, they would possibly be suing the municipalities, the county, the state and appraisal company.
   ”Suing the municipality or the county or government is a truly daunting thing to do, but having said that I’ve made a career of it,” said R. William Potter, a partner at Potter and Dickson of Nassau Street, who explained the process to the packed room.
   The main issue residents can fight is a constitutional question of the discriminatory impact of the revaluation. This raises questions of violation of the uniformity clause in the state Constitution that requires uniform and equal treatment of comparables in property tax.
   ”When you have comparable properties that are treated differently, that is a facial violation of the uniformity clause and a possible violation of equal protection.”
   The uniformity clause requires similar properties to be treated in the same way when doing assessments and tax valuations. Equal protection, under the 14th Amendment of the U.S. Constitution, applies because of the dissimilar treatment of similar properties in both municipalities.
   ”It also raises a larger question dealing with the equal protection clause of the United States Constitution,” said Mr. Potter.
   There may also be a challenge based on the Fair Tax group’s work showing systemic errors that have been made called arbitrary and capricious.
   ”This is basically saying that government action which is irrational cannot withstand scrutiny,” he said. “If there is not a sound rational and factual basis to what the municipality is doing, it is deemed voidable. Arbitrary and capricious are terms courts have been using for actions that are not done on a sound basis.”
   Mr. Potter also thinks there might be grounds for Fair Housing Act allegation. “It’s a federal law that says municipal actions can not be such as to drive people out of their homes based upon several categories,” said Mr. Potter.
   Fair Housing Act may apply because the tax increases are driving people out of their homes and causing the neighborhood to be gentrified by driving people out of their homes with unreasonable tax increases.
   ”I’m kind of uncomfortable here, I’m basically saying you ought to sue, and you ought to use our law firm to do it,” said Mr. Potter. “Litigation is costly, it’s incredibly time consuming, it’s very stressful and difficult to do. If you want to do this, you are going to have to work together; you’re going to have to commit yourself to be part of the process and that means also take out your wallets and write some checks.”
   He was unable to give a cost estimate because he has no idea what the other side will do, they could settle at the threat of litigation.
   One major barrier to the lawsuit could be that the suit is untimely and in violation of a 45-day rule, which is a standard rule that states all lawsuits against municipalities have to commenced within 45 days of the act that is being complained about.
   ”There are oodles of exceptions to that rule,” with number one being a constitutionality and public interest challenge, said Mr. Potter.
   Mr. Potter also thinks there also may be Open Public Records Act (OPRA) violations if the municipalities have materials the group has requested and are failing to provide copies of requested material.
   One issue brought by Tony Lunn questioned suing the government, which would use tax dollars to defend itself.
   No suit has been filed yet, “we’re waiting to see if the community wants it,” said Mr. Potter, who lives in the township. He had a significant increase on his property and negotiated a discount with the county tax assessor.
   After legal action, if successful, the municipalities would have to redo the assessment. Redoing the assessment would cost about $750,000 or $50,000 per year, if the assessment is used for 14 years, like the last one, said Mr. Firestone.