A citizen group has filed a lawsuit challenging the 2010 Princeton property revaluation, arguing that the revaluation was not properly carried out and that it discriminated against lower income, minority and elderly residents.
The lawsuit, filed in Mercer County Superior Court today, names as defendants the borough, township, local tax assessor, county board of taxation, and the appraisal company that conducted the revaluation.
Plaintiffs in the suit include more than a dozen township and borough residents, the estate of a borough activist, and the citizen organization Princeton Fair Tax Revaluation Group, which is led by borough resident Jim Firestone and township residents Dale Meade and Jim Floyd.
“When we looked at what happened in the revaluation, we went in with an open mind, but it then became clear that the revaluation was systematically flawed,” Firestone said. “A lot of people got hurt and can’t pay their taxes. At first it appeared to be the Witherspoon Jackson neighborhood, but then we saw there were problems all over town with smaller, older homes.
“Flaws kept showing up, and individual appeals are not enough to address a flawed system,” Firestone said. “It’s like a building with a foundation that is structurally flawed. You can’t just fix it by building on top of it.”
Lawyers for the borough and township have not had a chance to review the suit and Harry Haushalter, the tax lawyer for Princeton, could not be reached for comment today.
But Maeve Cannon, the lawyer for the borough, said she is reviewing the court filing and the borough will prevail. “I’m confident that the revaluation will withstand scrutiny,” she said.
The 30-page complaint, filed for the citizen group by Princeton lawyers Bruce Afran and William Potter, challenges the revaluation methodology and process and says the revaluation was arbitrary, capricious and discriminatory. It also argues the public should have been involved in various steps of the revaluation process but was not.
“The overall pattern of the revaluation reveals a stark shift of property assessments and taxation burdens away form larger, more expensive and newer homes, and shifts burden to smaller older less expensive homes,” reads the lawsuit.
Many residents of more expensive homes saw their taxes decrease as a result of the revaluation, while owners of more modest homes, on average, saw their taxes go up, sometimes double or more what they had been paying.
The suit raises questions about how the revaluation firm Appraisal Systems was hired, how a revaluation advisory committee was selected that helped decide what constituted “neighborhoods” for property valuation purposes, and how site values were set for neighborhoods. The group argues the revaluation advisory committee was unduly stacked with wealthy property owners, including the biggest landowner in town, Princeton University.
In the lawsuit, the group contends that older homes in more densely populated neighborhoods like the Witherspoon Jackson neighborhood were hit hardest by the revaluation, but that their values were determined based on the sales of newly built homes that are not similar.
The group argues that there was a preferential bias in favor of wealthy property owners that resulted in a higher tax on less wealthy property owners, and that the revaluation favored the developers of so-called McMansions, whose properties were treated as vacant lots even where houses were fully constructed on them.
The system, the group argues, caused more valuable properties in borough and township to be given unreasonably low values in comparison with their true market value, artificially reducing the assessed value of more valuable properties, and thus reducing the taxes on such properties.
“Even owners whose assessments are correct are paying more than their proper share of taxes because the more valuable properties are assessed at artificially low, synthetically reduced tax rates,” the suit reads.
Representatives from the fair tax group claim they tried to get detailed information and working papers on the revaluation methodology through the Open Public Records Act, but that the information was never released. They also question whether the appraisal company met its contractual obligations, including the deadline to complete the revaluation.
The suit argues that the revaluation violated the Federal Fair Housing Act because it allegedly discriminated against elderly and minority taxpayers who own more modest homes. It calls for the revaluation to be declared void, for pre-2010 property values to be reinstated, and for the revaluation to be redone by another company. The residents also want the appraisal company to refund its fees and wants attorney fees for the lawsuit.
“We tried to raise issues at public forums about how the revaluation was conducted, but there was no follow up by government officials,” Floyd said.
The borough and township governing bodies, in response to the residents, created a revaluation study commission that looked at how the revaluation was conducted and determined the revaluation was not systematically flawed. The commission argued, as did the tax assessor, that recent sales proved the revaluation was conducted properly. The fair tax group disputed the commission’s findings.