By VASHTI HARRIS
Staff Writer
SOUTH RIVER – The Middlesex County Board of Taxation has announced its commitment to order South River and Dunellen to conduct revaluations by the end of the year, showing its support of the New Jersey Division of Taxation ruling.
A decision was handed down on Oct. 20 at the Board of Taxation’s monthly meeting regarding the county’s official agreement with the state’s mandate to order revaluations for towns that have not conducted their own in decades. Not undergoing revaluations within a timely manner is deemed an act of noncompliance of state law.
In November of 2015, the Division of Taxation launched an investigation that uncovered multiple municipalities that hadn’t done revaluations in decades. In Middlesex County, the Borough of South River was found to have not had a revaluation in more than 30 years, and was ordered to do a property revaluation by the division on Sept. 14.
John Ficara, acting director of the Division of Taxation, ordered the South River revaluation pursuant to the state Constitution, which requires property taxes to be assessed uniformly statewide. He said the division started its investigation because the Middlesex County Board of Taxation has failed to meet its constitutional obligation to oversee its taxing districts, according a press release from the State of New Jersey Department of the Treasury.
“Middlesex County has the only tax board in the state that has not ordered an involuntary revaluation in more than 20 years. That unfortunate point of fact is notable because in 1975 Middlesex County was at the forefront of defining case law on revaluations,” Ficara said in an official letter to the Middlesex County Board of Taxation.
The case that Ficara is referring to is Middlesex County Board of Taxation v. Borough of Sayreville, which ruled that the Board of Taxation had the right to order municipalities to do complete revaluation of all taxable real property within each municipality, according to an official case document.
A revaluation is a program undertaken by a municipality to appraise all real property within the taxing district according to its full and fair value, according to an official document prepared by the N.J. Department of Treasury.
Full and fair value is the price at which the tax assessor believes a property would sell at “a fair and bonafide sale” by a private contract on Oct. 1 of the pretax year. The sale must be between a willing buyer and a willing seller, according to the document.
A revaluation program seeks to spread the tax burden equitably within a municipality. Real property must be assessed at the same standard of value to ensure that every property owner is paying his or her fair share of the property tax, according to the document.
Inequitable assessments result from the following situations: changes is characteristics in areas or neighborhoods within the municipality and within individual properties; fluctuations in the economy (inflation, recession); changes in style and custom (desirability of architecture, size of house); changes in zoning which can either enhance or adversely effect value; and delays in processing building permits which delay tax assessments on new construction, according to a document from the Treasury.
Now that this revaluation order has officially been issued, South River municipal officials must complete several steps in order to complete the revaluation. Some of those steps include submitting up-to-date tax maps; the municipal tax assessor for each town must, within 30 days from the date of the revaluation order, submit a proposed plan of compliance; the municipal governing body must take all necessary actions to enter into a revaluation contract in accordance with the Local Public Contracts Law; and a revaluation firm shall perform the revaluation on behalf of the municipal tax assessor, according to a statement prepared by the Department of the Treasury.
South River is currently in the process of completing the revaluation, according to Richard Lorentzen, president of the Middlesex County Board of Taxation.
The South River revaluation must be completed by Nov. 1, 2018, according to a statement prepared by the N.J. Department of Treasury.
When asked why he thought a borough like South River waited so long to do an revaluation Lorentzen said, “It’s expensive for a town to do a revaluation.”
South River officials could not be reached by press time.
To learn more about property revaluations, visit www.state.nj.us./treasury/taxation/pdf/lpt/revaluation.pdf.
Contact Vashti Harris at [email protected].