Township calls process for apportioning property taxes for regional school district ‘arbitrary, capricious, unreasonable and unjustified.’
By: Jill Matthews
PLAINSBORO After seeing a substantial tax increase for the past two years because of what it calls an "arbitrary, capricious, unreasonable and unjustified" process for apportioning school taxes for a regional school district, the township announced Wednesday it has filed a legal complaint against the state challenging that process.
"The inequitable method the state uses to determine how schools are funded in a regionalized district has become a tremendous burden on our taxpayers," said Mayor Peter Cantu in a statement. "It’s time for a serious examination of this process and to find ways to make it fair and equitable."
The complaint alleges that the funding method used is unconstitutional special legislation affecting municipalities, violates the provision requiring all property to be assessed according to the same standard of value and violates the constitutional provision requiring a "thorough and efficient system of free public schools."
Mayor Cantu said in an interview that the township, after conducting research before deciding to file the case, believes it has a strong case.
The complex formula used by the state for regionalized school funding apportionment is based on real estate assessments and tax ratios. When the township first joined with West Windsor to create the regional school district years ago, the two townships decided to use a method based on a per-pupil cost, said Mr. Cantu. Sometime later, the state required the more complex method of funding, he said.
Each year, the values of all properties in every municipality are adjusted to current market value. Because Plainsboro had no commercial property sales, Mayor Cantu said, the market value of commercial sales were assessed based on increased residential property sales.
Since 51 percent of Plainsboro is commercial property and only 49 percent is residential, and because commercial property values have not increased like residential properties have, township residents have been given an unfair burden of the school taxes, Mr. Cantu said.
While the reliance on commercial and residential properties in the township is about equal, that is not so in West Windsor, where approximately 70 percent of properties are residential compared to 30 percent commercial, the Plainsboro mayor noted.
The township also points out that exceptions allowed by the state in determining usable sales obstruct the goal of accurately determining fair-market value.
Cited as an example is the fact that West Windsor omitted two large property sales that would have significantly changed its tax ratio. Princeton MarketFair was assessed at $25.9 million but sold for $67.8 million, and WW Commons, LLC was assessed at $32.2 million but sold for $75.2 million. Both sold for about two and a half times their assessed value.
Mr. Cantu was quick to note that Plainsboro was challenging the state, not West Windsor. But he also said the township has had difficulty persuading West Windsor to conduct a revaluation and that Plainsboro also believes that its neighbor has been undervaluing some of its properties, like the Princeton MarketFair.
West Windsor Mayor Shing-Fu Hsueh said he had not seen the documents filed by Plainsboro, but that he would be happy to support making improvements to the current system. But because he never got into the details of how the state came up with the current system, he could not say if he thought there was a better way of determining the apportionment of funds.
The state Department of Treasury could not be reached Thursday because state offices were closed for Veterans Day.