By Nokware Knight
For the second year in a row, Lawrence Township has been the site of significant budget and tax changes, most recently with the proposal of a 5-cent municipal tax increase and the start of a township revaluation.
According to state polls, New Jersey’s efforts to curb growth in local property taxes was favored by the state’s residents at large, but has had mixed ramifications. In Lawrence Township, property taxes, which are calculated as a percentage of the appraised values of properties, account for more than half of all tax revenue used to fund day-to-day public services.
But, since 2007, local residents have made a sustained effort to reduce appraised values of their taxable properties. The township’s total tax base has steadily declined as a result, while the costs of running the township have not. Both residents and the municipality overseeing the township at large have worked hard, with and against each other, to prevent from being squeezed any closer towards insolvency.
The municipal tax rate grew no more than 1 cent per year, from 50 cents per $100 of appraised property value in 1999, to 52 cents in 2003. By 2007, the municipal tax rate had reached 67 cents.
Every year since 2007, residents have filed tax appeals to challenge the appraised values of their homes downward. And every year since then, they succeeded, reducing the total taxes they would pay individually, along with the township’s total tax base and revenues. By fiscal year 2012, the township estimated that it would need to raise the municipal tax rate by 5 cents and use 97 percent of its existing surplus to balance the budget for 2012, leaving next to no financial cushion for the township to fall back on.
To address pending losses, town officials and residents shared proposals, held meetings, and voted. Proposals for fee-based trash collection, a 9-cent municipal tax increase on top of another pending 5-cent raise, and a 3-cent increase in school taxes were rejected. Instead, 13 government employees were laid off, the school board’s budget was cut by $500,000, and municipal tax was raised by 5 cents instead of 14.
In fiscal year 2013, more appeals were filed, the tax base fell by $27.1 million, and potential tax revenues fell by $254,952.87. The town also owed residents $970,000 in refunds for tax appeals from 2012. But, since 79 cents of every property tax dollar collected automatically went to the public school system and Mercer County, only 21 cents per dollar collected remained, a total of $262,500, to pay the refund. The township made $1 million in cash reserves available to pay for the refunds.
The township exhausted most of its cost cutting options in 2012. And so, changes listed in the proposed budget for fiscal year 2013 have mainly considered tax revenue, a commitment to outsourcing the operations of the town dispatch center to a private contractor, and using existing surplus funds to fill any leftover gaps. Potential trash collection fees were reintroduced and the municipal tax rate will likely be raised another 5 cents, to $0.94 per $100 of assessed property value. Township officials expect to spend $3,195,000, or 76 percent, of its $4,189,579 surplus balance to accommodate fiscal shortcomings for the year.
Additionally, officials have hired The Professional Property Appraisers of Delran to revalue all property to reflect current market rates, the value that taxable property is supposed to be appraised at by law, according township Tax Assessor Geoffery Acolia. Acolia says that the average Lawrence Township property is currently valued at $160,262, only half the market rate, a number that should double after the reassessment. The municipal tax rate, he says, will drop by about half, since the New Jersey’s 2 percent tax levy cap limits how much taxes, in aggregate, can be raised during any given year.
Initially, the total amount of taxes collected will not double as a result. Instead, the township aims to reduce the difference in appraised property values between those who have successfully filed tax appeals and those who have not, so that two residents in similar homes pay similar tax rates. As of 2012, the average Lawrence Township resident paid $1,432 in municipal property taxes, ranking it 12th out of the 13 municipalities in Mercer County. Mercer County municipality residents paid an average of $2,155.73 cents in municipal property taxes in 2012. The figure does not consider other taxes and associated costs, such as those for public schooling, municipal employees, and miscellaneous services.
