On appeals from judgments of the Supreme Court, whose opinion is reported in 125 N.J.L. 219.
For the appellants, Edward P. Stout.
For the respondent cities of Elizabeth, New Brunswick, Trenton, Hackensack, Burlington, the towns of Montclair, Morristown and Westfield, the Borough of Somerville and other municipalities, Herbert J. Hannoch.
For the respondent City of Paterson, John F. Evans.
For the respondent City of Plainfield, William Newcorn.
For the respondent Borough of Sayreville, Joseph T. Karcher.
Of counsel for the foregoing respondents, Herbert J. Hannoch and Morris Weinstein.
The opinion of the court was delivered by
HEHER, J. The insistence is that chapters 4 and 5 of the laws of 1940 (Pamph. L., pp. 21, 33), contravene article IV, section VII, placitum 12, of the state constitution, directing that "Property shall be assessed for taxes under general laws, and by uniform rules, according to its true value," and also section I of the fourteenth amendment of the Federal Constitution, for "lack of uniformity and equality" in (a) the "scheduled property;" (b) the "unit values;" (c) the "classification of the taxpayers;" and (d) the "rates."
It is said that the cited provision of the State Constitution "goes hand in hand with the federal constitutional guarantee of equal protection of the laws," and that "the cardinal rule of uniformity in taxation under both state and federal constitutions is that the burden of taxation must be borne equally by all in a single class." The language of this state constitutional precept is found to be "broad" and "general," and not "limited to an assessment for the levy of taxes." The argument is made that "the valuation of property for taxing purposes includes the valuation of property for the apportionment of the taxes just as much as the valuation of property for the levy of taxes;" that "the words 'for taxes' include all branches of taxation -- the levy of the tax, the collection of the tax, and the distribution of the tax;" that "the constitutional requirement of uniformity is destroyed by any departure from the general requirement in any phase of taxation;" and that "there must be uniformity in the initial valuation of the property, in the rate to be applied, in the collection of the taxes, and in the distribution of the taxes." And it is maintained that it is implicit in this particular constitutional
mandate, construed according to "its spirit and intent," that the municipalities shall "receive a just and fair equivalent under a substituted tax for that which they would receive under the direct taxation of the property."
The "crux" of appellants' "attack on the statutes * * *, both under the state and federal constitutions," is stated to be "the inequality between the exemption and the apportionment provisions," in that the "property which is exempted is not included in the schedule of property to be valued," and "only a part of the property exempted is included," and "the part that is included is valued not as property is generally valued, but by applying fixed unit values, regardless of kind, character, condition, location, or true value." By way of elaboration, it is said that "validity can only attach to taxation systems which, notwithstanding the exemption provisions, insure equality in the burden by either providing a fair equivalent for the tax revenue to the municipalities which are deprived of their normal tax revenues, or by making the tax of statewide benefit to all;" and that the "tax revenue secured" by the statutes in question "is not for a statewide, general purpose, but is wholly for the municipalities' local purposes," and, such being the case, "unless a fair equivalent of tax revenue is insured to the municipalities which are deprived of their normal tax revenue by the exemption provisions of the statutes, then the constitutional requirement of uniformity and equality is not met, and the statutes should be condemned." Again, it is urged that, "if the result of the statute in question is a destruction of uniformity in taxation, the statute should be invalidated exactly as it would be if it provided for the assessment of the property in question in the first instance by a theoretical or arbitrary method instead of according to true value;" that "there can be no ...