PRINCETON: Borough may look at university tax exemptions

By Victoria Hurley-Schubert, Staff Writer
   Borough officials are considering taking a closer look at tax exemptions claimed by Princeton University because of a lawsuit filed by a group of several citizens.
   (See stories in Tuesday’s issue of The Packet and online at centraljersey.com)
   The discussion was sparked by the formal presentation of the Joint Revaluation Study Commission’s findings to the council. The report states that 40.33 percent of the borough’s assessed value is tax exempt.
   ”A more rigorous examination could be undertaken to evaluate the basis and extent of claims of tax exemption,” said Councilman Roger Martindell, quoting from the report.
   ”The reason I bring that to your attention is there is a group in town suing the university over its claims of tax exemptions,” he added. “We in the borough can wait for these taxpayers to do the job, but we could also take an issue on our own part by collecting the very data that this report suggests we collect.”
   Mr. Martindell said anyone applying for exempt status has to submit paperwork, but the borough does not “make an effort to follow up and challenge that. Maybe some of the activities in those buildings are tax exempt and maybe some aren’t.”
   Non tax-exempt activities might be able to generate revenue for the borough, he said.
   ”Given the numbers involved, it’s worth taking a more rigorous look at the process of claiming tax exempt than we have in the past,” continued Mr. Martindell. “Not that we’ve fallen down on the job in any way, culturally we’ve never really challenged claims of tax exemption … I think its incumbent upon us not letting taxpayers lead the charge and take some effort and be a bit more rigorous ourselves.”
   When Councilwoman Jenny Crumiller reminded him the borough itself is being sued, Mr. Martindell replied, “we’re a placeholder, we have no stake in the outcome.” The suit names the borough as a co-defendant because it is the taxing agency and the tax assessor makes the tax exempt decisions.
   The councilwoman also inquired about the process of “checking up” on tax exemptions.
   Neal Snyder, tax assessor for the borough and the township, said there is paperwork required that includes two years of financial statements, audits, use and other documentation. He then reviews the documents submitted and sends it to a lawyer who reviews it to make sure an exemption would be legitimate. Tax exemptions are reviewed every three years.
   With Princeton University’s paperwork, there are pages of information that are sorely lacking in detail, said Mr. Martindell. Details, such as if faculty are getting grants to cover overhead expenses and professors or staff members receiving income from patents, are not disclosed.
   ”There is no disclosure of income-generating activities in (labs and classrooms),” he said. “Maybe there should be and if there should be it might be taxable. That’s the kind of thing that should be explored.”
   Ms. Crumiller agreed it should be explored.
   This kind of information is what the four taxpayers who are bringing the lawsuit are trying to obtain, said Mr. Martindell.
   The forms themselves are vague and do not have room for elaborate answers, said Mr. Snyder.
   Councilman David Goldfarb said resources will be provided to defend Mr. Snyder and his judgments.