Towns should adopt property revaluation with no surprises

With all the political posturing about reducing property taxes, most of us have overlooked another key factor in the tax bills on our homes: the property assessments that are controlled by municipalities.

Recently they have been in the news in East Brunswick and South Brunswick (where ratable properties' assessments were reduced after tax appeals); Plainsboro (where a townshipwide revaluation was necessitated by tax appeals); Cranbury and Helmetta (where revaluations are in progress); New Brunswick, Spotswood and South Amboy (which are launching revaluations); and Monroe (where owners of new houses say they're exorbitantly assessed compared to owners of older homes).

In addition, the county Board of Taxation reports Dunellen, Middlesex, Piscataway, South River and Woodbridge have let property assessments fall below 40 percent of true-market value. The boom in real-estate prices in the past several years is the cause of this disparity in most central New Jersey towns.

When municipal officials prepare annual budgets, the town's total assessed value directly affects the tax rate. More ratables can mean less of a burden on individual homeowners.

The tax assessments on older homes don't change with the times. Just look at the valuation of your home on the property-tax bill sent to you every six months. It's far less than what you could sell your home for today. It's been a decade or more since most towns conducted revaluations of all properties.

When you buy an existing home, the local tax assessor isn't permitted to raise its old assessment on a one-time basis. My Monroe house is assessed for about half of what I could sell it for today. On the other hand, buyers of new homes and corporations that build new facilities have assessments based on current market prices and thus pay proportionately more property taxes.

To equalize the burden among all property owners, a townwide revaluation must be done. With current market values, the total will be higher, and the tax rate will be lower. Still, owners of homes and commercial properties that are at least several years old may have to pay more taxes. That's going to be very unpopular, but it will put more pressure on New Jersey's elected officials to implement a better tax system.

A gentler method to keep municipal valuations up with the times is a townwide adjustment every year. That's what Franklin Township does. The tax assessor has all property-sale prices and calculates the overall change in market values. All assessments are adjusted accordingly.

A Franklin property I bought four years ago has had its valuation changed annually, so that it's 38-percent higher today. I could sell it for about that much more today. The yearly increases have been easier to take than if a revaluation were to raise my property tax 38 percent all at once.

Isn't that a fairer way to handle assessments? No unpleasant surprises. The county should have all towns adopt this method. There would be fewer tax appeals, which cost everybody money and may lead to expensive townwide revaluations anyway.

Rich Wieland

Monroe