For many years, Plainsboro’s business community footed the bill for more than half the taxes paid in Plainsboro.##M:[more]## Now, with the numbers from the recent property revaluation on the books and tax bills going out, homeowners are learning that it’s their turn to carry the load.
Residents are finding out that the average 100 to 150 percent increase in the value of housing in the township coupled with the downturn in the commercial market is resulting in huge tax increases in their tax bills.
In a letter to Mayor Peter Cantu, also copied to the News (see page 3), Brittany resident Phyllis Spiegel decried the increase. “I am outraged at the tax bill I just received —- up $2,”100 over last year. The taxes on my two bedroom townhome are now over $6,”000… I was under the impression that Plainsboro’s many ratables would keep our tax rate down.”
“When we purchased our home, it cost $223,”000 and property taxes were $5,”000,” says township resident Jim Fraunberger in another letter to the News. “We received our new tax bill and nearly had heart failure. Our home was revalued at $519,”000 and our taxes increased from $7,”013 to $10,”320 — nearly a 50 percent increase.”
“I can understand the need for an annual cost of living increase, but nowhere near 50 percent,” he says. “The tax increase is way out of line and must be overturned.”
Many homeowners throughout the community also report increases of several thousand dollars. Some, such as Fraunberger, mistakenly believe that the increase is a result of out-of-control budgeting by the township.
The actual answer is more complicated. The bottom line is that houses have appreciated in value to such a high level that the ratio between the amount paid by homeowners and the amount paid by commercial ratables has changed dramatically.
According to Township Administrator Robert Sheehan, the commercial sector paid 51 percent of the taxes before the revaluation. Now, commercial ratables only account for 42 percent. That means that the township’s residents have to foot the bill for almost 60 percent of municipal, school, and county taxes.
“Its a very heavy load people are left with,” says Sheehan. “It’s emblematic of a larger problem. We’re a community that manages its finances carefully, has carried out its planning carefully, we have a healthy ratable base, and it still hasn’t protected us.”
Mayor Peter Cantu, who saw a sizable increase himself in taxes, shares residents’ concerns. “The major factor was the revaluation, the results of which are pretty evident. There was a huge shift from commercial to residential, but we have no choice but to fairly value properties.”
The mayor points out that in the past Plainsboro has been extremely aggressive in looking to adjust valuations in the commercial sector as property values there increased. Although the market is now depressed, the township intends to keep a watchful eye on commercial value increases in the future.
In addition to the shift in the ratable ratio, other issues factor into the increase, including fundamental flaws in the way New Jersey’s tax system operates.
“This is a frustrating piece of business,” says Cantu. “As long as we continue to support municipalities and schools on the taxpayers’ backs, taxes are going to continue to increase.”
Although Plainsboro only accounts for about 10 percent of the taxes paid, it acts as the collector for 100 percent of the tax bill, Cantu adds.
Another factor increasing taxes is the system the state uses for dividing the tax burden between Plainsboro and West Windsor in the regional school district. “What’s occurred here over the past two or three years is a shift in burden for school taxes to Plainsboro,” Cantu says.
Overall, Plainsboro has seen a school tax increase of about 50 cents per $100 of assessed valuation over the last three years. Meanwhile, in the same period taxes have only increased by several cents in West Windsor. According to Cantu, with West Windsor conducting a revaluation this year, he expects the burden may shift back “somewhat” to West Windsor in 2006.
Cantu, as the current president of the New Jersey League of Municipalities, has been lobbying to convince state legislators to authorizing a convention for property tax reform. This year the state Assembly approved such a measure, but it was not pursued by the Senate.
During this year’s state budget deliberations in March, Cantu testified before the Senate and Assembly to remind them of the municipalities’ plight.
“Municipal governments cannot continue to depend on property taxes that so burden their taxpayers and it is clear that state support is insufficient and unreliable,” said Cantu in his testimony. “The human impacts are real and increasingly harsh. Senior citizens cannot afford to live in the homes where they raised their families and young couples cannot afford to raise their families in the own hometowns. It is time to fix this broken system.”
“I also met with the governor and expressed our disappointment,” says Cantu. “This is an issue on which I’m very frustrated. We (township officials) have to communicate with our residents and let them know there is a with problem with the process and tell them that if they have concerns, they direct them to the state level.”
