For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None.
This case involves the validity of Chapter 141 of the Laws of 1964 (herein Chapter 141). The subject is ad valorem taxation of property. In 1960 the Legislature enacted Chapter 51 of that year (herein Chapter 51), but later postponed the effective date of the tax reforms it would accomplish. That act is now to go into operation in January 1965. Chapter 141 modifies Chapter 51 for 1965 and 1966, and it is this modification which plaintiffs assail. The trial court upheld Chapter 141 (85 N.J. Super. 357) and we granted plaintiffs' petition for certification. R.R. 1:10-3.
A brief summary of the background will suffice. For more than a hundred years our statutes provided for the taxation of both real and personal property at true value. The statutory mandate was widely ignored, with resulting gross inequities as among the taxpayers of a given municipality and as well among the municipalities with respect to the costs of regional government and the allocation of certain State aid, which costs and aid were allocable to the municipalities on the basis of their aggregates of taxable ratables. With respect
to intermunicipal inequities, a statutory process of equalization of the aggregates of ratables provided an antidote to overcome the failure of the local assessors to comply with the tax laws. The more difficult problem was the unequal enforcement of the tax laws as among the individual taxpayers as to which nothing short of municipality-wide revaluation and faithful adherence to the standard of value as to all categories of taxable property would suffice.
By reason of the age and depth of the problem, no one knew what would be the impact upon municipalities and their taxpayers if compliance with the basic tax laws were achieved. The sundry facets were discussed in the several opinions filed in Switz v. Middletown Township, 23 N.J. 580 (1957).
Chapter 51 was enacted to deal with the problem. It differentiated among real property and classes of personal property, to the end that the burden of government would fall upon each category to the degree the Legislature thought proper. Chapter 51 withstood various constitutional challenges, except in minor respects not here pertinent. Switz v. Kingsley, 37 N.J. 566 (1962).
As noted above, the effective date of Chapter 51 (except as to one section not here significant) was postponed. The reason was a sharp controversy as to the impact Chapter 51 would have upon the owners of different classes of property. No one knowing how much personal property would be taxed under Chapter 51, there was concern that Chapter 51 would lead to substantial shifts in tax burden to homes or to other real property or to personal property, any of which movements, if severe, could conceivably raise havoc with the local economy.
To get facts, the Legislature adopted Chapter 9 of the Laws of 1963 which required that confidential information returns be filed by owners of tangible personalty used in business. The Acting Director of the Division of Taxation analyzed 174,164 such returns. Of these, 132,326 were deemed usable for immediate purposes, and on the basis of them the Acting Director reported that Chapter 51 would lead to increases
in personal property assessments in 377 municipalities totaling $556,300,000 and to decreases in 190 municipalities totaling $422,716,000. Kingsley, Report on Business Personal Property Information Returns Filed under Chapter 9, Laws of 1963 (Feb. 1, 1964), p. 25.
Against this backdrop, Chapter 141 was enacted. The statement annexed to the bill reads:
"Chapter 51 of the laws of 1960, as presently written, could severely shift the local tax burden to homeowners in some taxing districts and to businesses in others. It is desirable that the imposition of uniform standards of ...