EDISON — Tax appeals essentially will never end, Business Administrator Maureen Ruane said as she explained why the Township Council had to consider 11 tax appeals.
“I want to be clear, all we have done is rather than borrowing money for tax appeals, we are paying them cash,” Ruane said. “[Township Tax Assessor] Joann [Jimenez] has a very good handle on [the appeals], but prices fluctuate, things sell. We will have tax appeals every year. … We have about $2 million in the budget and we are handling [the appeals] without borrowing and that is the best we can actually hope for right now.”
Council members approved 11 tax appeal settlements through resolutions at a meeting on May 23. Some of the appeals date from six years ago.
“This has been an ongoing process,” Jimenez said. “These 11 appeals are actually addressing over 30, close to 40, appeals that are presently at the tax court level stemming all the way back from 2012.”
The tax appeal settlements included nine commercial properties and two residential properties.
The largest tax appeal settlement on the agenda was filed by Plainfield Country Club, which is located at 1541 Woodland Ave., with a tax appeal settlement of $51,560 in 2018, $153,690 in 2017 and $101,130 in 2016. Jimenez said the appeal stems from 2012.
“We were able to come to an agreement with the least amount of exposure to the township,” she said.
Jimenez said the appeal with Edison Sai LLC, 21 Cortland St., addresses two years, $39,408 in 2014 and $38,208 in 2013.
“There was change of ownership and as a result, there was a change in income and the changes that were provided by that point forward justify the values we presently have,” she said.
Orange and Orange LLC is an office building off Pierson Avenue near the Board of Education building, Jimenez said. The tax appeal settlement is $26,880 for 2018, $26,880 for 2017 and $10,522 for 2016.
“[The building] was underutilized at the time” Orange and Orange purchased the property in 2014,” she said.
Jimenez said the building is renovated and running in a more efficient manner.
“Although not fully tenanted, it is owner-occupied,” she said.
The tax appeal settlement for Rose Hotels Ltd., 1967 Oak Tree Road, is $9,801 for 2017.
The tax appeal settlement for Archland Properties I LLC, 1511 Route 1, is $9,408 for 2017 and $9,223 for 2016.
The tax appeal settlement for 30 Parkway Place LLC, 30 Parkway Place, is $16,160 in 2018, $16,160 in 2017, $15,859 in 2016 and $15,252 in 2015.
The tax appeal settlement for 400 Raritan Center Investors, by Federal Business Centers Inc., is $196,317 in 2018 and $89,639 in 2017.
The tax appeal settlement for 300 Columbus Circle Investors, by Federal Business Centers Inc., is $138,695 for 2018 and $120,158 for 2017.
Tax appeal refunds
Councilman Alvaro Gomez said that in the past, the township refunded a huge amount of tax appeal settlements.
“We not only collect a portion [of taxes], there are portions collected by other entities,” he said. “We have to pay [the taxes] back on their behalf with exception of the county [which reimburses the township].”
Gomez said since 2012, the township had to refund approximately $22 million, the portion for which the Edison School District Board of Education is responsible.
“That is the struggle we are dealing with, but the [interest] rate is now lower and the amount is affordable for us being able to pay it,” he said. “In the past, we couldn’t and we had to borrow.”
Ruane said this year, the tax refund for the Board of Education portion is $22,592.
Tax appeal filings
Jimenez said property owners have the right to file a tax appeal every year.
“We are trying to address those that are stagnant for a long time,” she said. “Plainfield Country Club was one of the ones that has been active since 2012, so that is one of the priorities the department is taking and is trying to make sure those appeals that have not been addressed come to the forefront, so this way exposure does not continue to grow for the township.”
Jimenez said the department is in the midst of an analysis of how many tax appeals need to be addressed.
“As of right now, there are 382 outstanding appeals at tax court level,” she said.
Jimenez said there has been a decrease in the number, about 40 percent, of tax appeal filings in comparison from 2017 to 2018.
“[The tax appeals] filed at the tax court level are substantially higher in value [more than $1 million] or they are further continued from a county tax appeal,” she said. “Usually, [these tax appeals] take more time, usually they are commercial or industrial. The process to come up with valuation is different than a residential [property].”
The tax appeals are 10 to 15 percent residential, with the rest being commercial (and) industrial, Jimenez said.
“A ballpark estimate of tax appeals that still need to be in the forefront as far back as 2012 is a little over $3 million, but again this is just estimated, not an actual number yet,” she said.
Gomez said in comparison, municipal officials used to talk about $20 million in tax appeal settlements.
“We reduced the number of tax appeals we are seeing and not only that, we have taken a systematic, diligent approach that has alleviated a lot of these ongoing issues,” he said.
Councilman Robert Diehl said tax appeals is a budget line item that never seems to end.
“Hearing these numbers on the amount left is disconcerting,” he said. “I find tax appeals to be one-sided. Property prices and housing prices rise and fall. What happens when they rise? Do we get the money back when your $200,000 home becomes a $400,000 home or a $1 million business becomes a $10 million business?”
Jimenez said that, unfortunately, Edison has not had a revaluation of properties since the late 1980s.
“We are a little restricted on the methods we can use to address those issues,” she said. “But the department has undertaken counterclaim filings for [tax appeal filings] we feel are not justified.”
Jimenez said this year, Edison has filed 13 counterclaim appeals against commercial and industrial businesses in the municipality.
Contact Kathy Chang at [email protected].