Its not often that New Jersey residents have an opportunity to see their tax rate go down. On this November’s ballot voters will have an opportunity to vote on a referendum question that would do just that.##M:[more]##
Township Council, in a special meeting on August 24, voted 4-1 to include a special referendum in this year’s general election that would decrease the township’s open space tax from 7 cents per $100 of assessed valuation to 5 cents.
The rub is that aside from the good feeling voters may get from approving a tax rate decrease, the referendum will do very little to decrease the amount of taxes that they pay.
The referendum is actually an attempt by township officials to avoid a significant increase in the amount of open space taxes residents would pay if the open space tax rate remains the same after the new numbers from the current township-wide property valuation hit the books in 2006.
After the referendum the value of most homeowners’ properties will double, while the overall tax rate will decrease. The net effect is that the 7-cent rate will be a higher percentage of the overall tax rate and the revenue generated by the open space tax would almost double.
For example, the owner of a West Windsor home with a current assessed valuation of $200,”000 would pay $140 annually in municipal open space taxes. because that home is expected to double in value after the revaluation, the homeowner would wind up paying $280 for the tax.
“The township does not want taxpayers to end up paying more for the municipal open space program than was originally agreed to in 1998,” explains Mayor Shing-Fu Hsueh.
In 1993 township voters approved a referendum authorizing a municipal open space tax of 1 cent per $100 of assessed valuation and increased the amount to 2 cents in 1995. In a referendum in 1998, voters supported a 5-cent increase to the tax to fund the acquisition and ongoing maintenance of open space.
“The township will do whatever is in our power to control taxes,” says Hsueh. “At the same time we need to continue our open space program which has been so successful in limiting growth. This proposed adjustment allows us to accomplish both goals.”
Voting in favor of the November referendum were Council President Charles Morgan, Kristin Appelget, Linda Geevers, and Heidi Kleinman. Council Vice President Franc Gambatese opposed the measure stating that the rate should be halved to at least 3.5 or 3 cents.
The mayor had originally proposed a reduction to 4 cents, but said he would support the 5 cents adjustment.
The biggest question with the issue revolved around the uncertainty of the situation. Since the revaluation is still underway, township officials are unsure of the exact number required to keep the open space tax revenues equal to the amount originally intended.
“We must act now to reduce the open space tax, but not knowing the results of the revaluation, we don’t know the right rate for a permanent change,” says Morgan. “Thus, I support a two-step process that sets a best-guess rate for 2006 and will set a permanent rate for 2007 going forward.”
The referendum would be for a one-year adjustment to the open space rate, and would give time for the township administration to calculate a rate for 2007 based on actual assessment. Under the measure approved by council, the new rate would need to be approved in another referendum, or the open space tax would revert to 7 cents in 2007.
The township had to hold a special meeting on the issue because the deadline to submit information to the state for a referendum on the November was fast approaching. If the township had approved the referendum after the deadline it would have had to conduct a costly special election.
