By Nick Norlen, Staff Writer
In the coming year, Princeton homeowners will find out what their houses are really worth — and some residents might be in for a sticker shock.
In the first official step of a property revaluation process ordered for both municipalities by the Mercer County Board of Taxation in 2006, the Princeton Township Committee introduced an ordinance Monday that would initiate a program to have an outside firm assess all residential and commercial properties to bring their values up to date.
Borough Council plans to introduce an identical ordinance at its next meeting, Borough Administrator Bob Bruschi said Tuesday.
According to Neal Snyder, the tax assessor for both the township and borough, revaluations are mandated by the county based on three criteria: the number of years since the last revaluation, the ratio of assessed value to market value, and the coefficient of deviation, which is a figure that shows the spread among property sales — “between the overpriced and the underpriced.”
Princeton’s last revaluation was conducted in 1996. The pending process will be conducted this year to determine values to be used in 2009.
When the revaluation was announced in 2006, the ratio of assessed value to market value was 51.13 percent in the borough and 53.42 percent in the township. Since then, the ratio has fallen to 47.45 percent in the township and 40.30 percent in the borough, according to Mr. Snyder.
”On the average, homes appreciated 60 percent,” he said.
However, the ratio in 1995 was 42.94 percent, which means the municipalities are “almost the same as we were in that last boat before our last revaluation,” Mr. Snyder said. “Everybody is going to go back to 100 percent assessment equals market value.”
Still, for many, that means values will sharply increase.
The average assessment for a home in the borough is currently $347,375 and $424,038 in the township.
But Mr. Snyder projected that those values could rise to figures in the $700,000 to $800,000 range in the township, and in the $800,000 area in the borough.
”If your neighborhood appreciated more than the norm, typically you’ll see the increase in taxes when we do the revaluation,” he said. “And the ones that didn’t appreciate as much will see relief.”
Township Mayor Phyllis Marchand said Thursday that the revaluation will likely be a “a double-edged sword,” for residents.
Typically, a third of the population sees an increase, another third sees a decrease, and a final third stays the same, she said.
Either way, “it’s something that has to be done,” she said. “Really, the bottom line is fairness.”
Though the valuation of commercial properties will factor in to the tax situation, Mr. Snyder said he doesn’t expect the status of the housing market to affect results of the assessments.
”It looks like the sales are fairly flat,” he said, referring to the relative stability of a market where values have likely bottomed out. “Hopefully this is the bottom.”
Stable values — regardless of what the market is like — are important, because “when you do a revaluation, you take a snapshot,” he said. “You look at the sales in the last year or two in that neighborhood. You’re basing assessments on those sales.”
However, he added, “if the market’s declining” — like it was when West Windsor Township was revaluated recently — “you really need to make some adjustments to re-look at a neighborhood the following year.”
As for the actual execution of the revaluation, Mr. Snyder said every single home, commercial and exempt property — such as churches — will be inspected in each municipality, with residents being notified well in advance.
If the firm that is eventually hired is able to conduct all of the assessments this year, the municipalities will likely have a good idea of what the new assessments will be by the October or November, Mr. Snyder said.
And residents “will have an opportunity to discuss it, so it’s not cast in stone,” he said. “This is the first step. It’s an informal review. If they’re not happy, there’s the appeal process (before the county tax board).”
The next step now is to solicit bids for one of only 11 companies approved to conduct revaluation programs in the state, Mr. Snyder said.
Although the ordinance would authorize “a special emergency appropriation” to fund the program, Township Attorney Ed Schmierer said calling it an “emergency” is really a “misnomer.”
”It is just really an expense that comes to a municipality not on a very regular basis,” he said. “But that is what the statute requires that we call it.”
When the cost is determined, the governing bodies can decide among a number of different ways and time periods in which to fund it, according to Township Chief Financial Officer Kathy Monzo.
Township Administrator Jim Pascale said the ordinances will eventually result in a single contract for both towns, which will each contribute to the cost based on the number of properties that are assessed within their borders.
If the ordinances are adopted as planned, bids are expected to open in mid-March, according to officials.
A public hearing on the township ordinance is scheduled for Feb. 25.
Meanwhile, Mayor Marchand said the township might consider holding informational programs to educate residents about the revaluation, as has been done in the past.
”I think an informed public is a better accepting public,” she said.
