A bill sponsored by New Jersey Assembly Deputy Majority Leader Reed Gusciora (D-Mercer/Hunterdon) that would prohibit residents from challenging the tax valuations and tax exemptions of properties other than their own cleared a committee this week and will be put before the full assembly for a vote.
If the legislation is passed, citizens in New Jersey would no longer be able to challenge property assessments they think are too low. They would also be unable to challenge the tax-exempt status of properties in court, meaning a lawsuit like the current one in which residents are challenging the tax-exempt status of Princeton University properties could never be filed.
Supporters and opponents of the bill attended the committee hearing on Tuesday at the State House, but most attendees did not speak.
Supporters include the Association of Independent Colleges and Universities in New Jersey, the League of Municipalities, and the New Jersey Business and Industry Association.
The Association of Independent Colleges and Universities in New Jersey represents private colleges and universities in the state, including Princeton University. The New Jersey Business and Industry Association represents more than 20,000 companies in the state, including contractors, manufacturers, retailers and wholesale businesses.
Currently, a taxpayer who questions the assessed valuation or exempt status of another taxpayer’s property can file an appeal with the county board of taxation or file a complaint with the state tax court if the assessed valuation of the property subject to the appeal exceeds $1 million.
Government supporters of the bill argue that the legislation would save towns money by limiting property taxpayers to filing property tax appeals concerning their own property. They say local governments are the best suited to challenge the assessment or exempt status of a property whenever the owner is not involved.
A handful of residents attended the hearing to oppose the legislation, which they say will benefit only the powerful.
Taxpayers would have no remedy against a corrupt or otherwise unethical mayor, council or tax assessor to correct improperly agreed to assessments, opponents of the bill say. Power would be taken away from citizens to challenge local government.
“We need checks and balances and the current provision of the law is an effective and simple one that has stood the test of time,” said Princeton resident Joe Small, a former presiding judge of the Tax Court of New Jersey and former chief counsel of the New Jersey Division of Taxation. “Depriving the taxpayers of this long held right might in fact be unconstitutional.”
Small also said one mechanism for deterring, preventing, or correcting illicitly arrived at assessments would be taken off the books, with no indication that there is another equally effective remedy remaining.
Opponents of the legislation also point out that no study has been done by the New Jersey Legislature that looks at what other states do to protect their taxpayers from local government corruption when it comes to property assessments.