On appeal from the Division of Tax Appeals, Department of the Treasury.
For reversal and remandment -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Weintraub, C.J. Jacobs, J. votes to reverse and remand but does not join in the Court's opinion.
The owners of three parcels of improved realty in Atlantic City appealed from tax assessments made for the years 1956 and 1957. Appellants charged that although the assessments were at less than full true value, nonetheless they exceeded the "common level" of assessments in the taxing districts and demanded reductions to that level. The State Division of Tax Appeals held the required showing for relief had not been made. We certified the ensuing appeals on our motion before the Appellate Division of the Superior Court considered them. After oral argument, we remanded the matters for testimony to shed light upon the assessors' practices. The State Division of Tax Appeals held further hearings and pursuant to our mandate returned the supplemental record with its findings. The Division's ultimate conclusions remained the same. The cause was reargued on the basis of the augmented proofs.
The pivotal question is, what suffices to establish a basis for relief in a case such as the one before us?
We need not retell the story of unequal assessments of property for local taxation. See Switz v. Middletown Twp.,
23 N.J. 580 (1957); Village of Ridgefield Park v. Bergen County Board of Taxation, 31 N.J. 420 (1960). The present case is another episode in the quest of the taxpayer for treatment commensurate with that given his fellow taxpayers within the municipality. The cases just cited hold a taxpayer may sue to compel future compliance by the local assessor with the statutory mandate for assessment at full true value. That remedy, however, does not repair a past injury. To the latter end, taxpayers have sought reductions to the percentage of true value at which other property in the taxing district was assessed.
The development of an effective individual remedy for unequal assessment was delayed by Royal Mfg. Co. v. Board of Equalization of Taxes, 76 N.J.L. 402 (Sup. Ct. 1908), affirmed 78 N.J.L. 337 (E. & A. 1909), which held that a taxpayer so aggrieved could not have his assessment reduced below the statutory standard of full true value but rather could obtain relief only by appeals designed to bring all other assessments up to that standard. Quite obviously that remedy was illusory. It was so held in Hillsborough Township, Somerset County, N.J. v. Cromwell, 326 U.S. 620, 66 S. Ct. 445, 90 L. Ed. 358 (1946), which reiterated the principle that a state must reduce an assessment to end a discrimination violative of the equal protection clause of the Fourteenth Amendment even though the result is assessment below the standard fixed by statute.
After Hillsborough, the issue reached this court in Baldwin Construction Co. v. Essex County Board of Taxation, 16 N.J. 329 (1954). There the County Board had directed an increase in the assessments of selected portions of ratables in certain municipalities. The court found that "all lands throughout the affected municipalities were assessed by the local assessors according to a common ratio of value, making for equality and uniformity within the taxing district" (at p. 338). Since the increases ordered
by the County Board resulted in assessments above the "common ratio" in "discriminatory taxation violative of constitutional principle" (at p. 338), the increases were struck.
In Baldwin the court dealt with the issue on the premise that there was in fact a "common level," that is, a ratio to or percentage of full true value at which property generally was assessed in the municipality. Where in fact that is so, it is a simple matter to eliminate a disparity by reduction to that level. But experience indicates that except where a municipality has made a complete revaluation, parcel by parcel, and has implemented that work-product, a common level, in the sense of a single ratio to true value at which the great bulk of the ratables is assessed, cannot readily be shown if indeed one exists. Hence efforts have been made to prove a "common level" by relying upon the average ratio determined by the State Director of Taxation pursuant to N.J.S.A. 54:1-35.1 or the general ratio found by the county board of taxation pursuant to R.S. 54:3-17. See Delaware, Lackawanna and Western R.R. Co. v. Neeld, 23 N.J. 561; City of Hoboken v. Jarka Corp., 26 N.J. 336 (1958); Union City in Hudson County v. Ormond Tool & Mfg. Co., 26 N.J. 494 (1958); North Bergen Twp. v. Venino, 45 N.J. Super. 143 (App. Div. 1957); Jat Co. v. Division of Tax Appeals, 47 N.J. Super. 571 (App. Div. 1957), certification denied 27 N.J. 278 (1958).
The State Director's average ratio and the general ratio of the county board are primarily intended to meet the problem of intermunicipal inequality. They are designed to establish the total true value of the aggregates of real property within each municipality, in the one case for the purpose of fixing a basis for the distribution to municipalities of State aid for education, and in the other to fix the basis for the allocation among municipalities of the burden of taxation for the support of county ...