For affirmance -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall and Schettino. For reversal -- None.
This matter involves an attack by certain municipalities of Gloucester County upon the tables of equalized real property ratables adopted by the County Tax Board for the years 1963 and 1964. The attack is limited to the portion of the tables relating to the equalized aggregates of the ratables established for the Township of Greenwich. The tables set forth the aggregate real property assessables in each municipality in the county as determined by the board for purposes of inter-municipal apportionment of the county tax burden for those years. The two tables were based upon the equalization table prepared and issued by the Director of the State Division of Taxation containing his determination of the aggregate equalized assessables in each municipality in the State for 1963 and 1964 for use in allocating State aid to local schools.
In promulgating its table for 1963 the County Tax Board used the Director's aggregate assessables for the Township of Greenwich, except for his computation of equalized aggregate assessments for one class of realty in the Township, namely that designated commercial-industrial property. The board rejected his determination of the ratio between actual assessment of property in that category and its true value, because the ratio was arrived at by the use of a single sale of such property in the year in question. On the Township's appeal to the Division of Tax Appeals, the County Board's action was reversed, and it was directed to utilize the excluded sale, as the Director had done. A number of Gloucester County municipalities, appellants herein, joined in an appeal to the Appellate Division from that reversal.
While the appeal was pending the Director promulgated his equalization table for the purpose of determining the allocation of State school aid to municipal schools for 1964. In doing so, he used two sales of property in the commercial-industrial category in the Township of Greenwich, the single 1963 sale, and a second one, which occurred in 1964. Again the computation of aggregate true value ratables of all classes of property in the Township was predicated in part upon these two sales. This time, however, the County Tax Board accepted the Director's figures as the basis for the equalization table which it issued for purposes of allocation of the county tax burden among the municipalities. On appeal therefrom by the same objecting municipalities, the Division of Tax Appeals affirmed the board's decision, and a second appeal was taken to the Appellate Division.
During the pendency of those appeals the Appellate Division granted the appealing municipalities' request for a remand to the Division of Tax Appeals to permit introduction of additional evidence, bearing on the values of industrial properties in Greenwich Township. Admissibility of the proposed evidence, however, was to remain subject to review.
On return of the augmented record to the Appellate Division, the additional evidence was rejected as incompetent, and the judgments of the Division of Tax Appeals were affirmed. Thereafter, we granted the objecting municipalities' petitions for certification, and requested the Attorney General to participate in the appeal with respect to the policy of the Director in using single sales of property in fashioning his equalization table for school aid distribution purposes. 46 N.J. 55 (1965).
In preparing his table the State Director follows a convenient and uncomplicated system. All sales of real estate in each municipality of the county during the year being studied are reported to him. The sale price as indicated by the revenue stamps on the deed is treated as representing true value. The ratio of assessment to true value is then determined by comparison between the sale price and the assessed value. The
process is further refined by classifying the sales into four categories: (1) vacant land; (2) residential; (3) farm; (4) "other" (which includes commercial, industrial, apartments, etc.), and the ratio of assessment to true value is determined for each class. Moreover, statistical reliability is sought by a further screening of all sales. On the basis of experience and study the Director has established 27 categories of non-usable sales. If a sale falls into one of these categories is will not be utilized in the equalization process because it falls short in some respect of meeting the true value test, i.e. a sale between a buyer willing but not obliged to buy, and a seller willing but not obliged to sell. An over-all average ratio of all classes of property is calculated, which by application to the total assessed value of real property as reported by the local assessor, produces the aggregate equalized (hypothetically, the true) value of all the property in the particular municipality. This "true" value is then utilized by the Director in apportioning the State financial school aid for each municipality. See, Town of Kearny v. Division of Tax Appeals, 35 N.J. 299, 303 (1961); In re Appeals of Kents 2124 Atlantic Ave., Inc., 34 N.J. 21, 26-27 (1961); City of Bayonne v. Division of Tax Appeals, 49 N.J. Super. 230 (App. Div. 1958).
The Director does not promulgate his equalization table to control distribution of the county tax burden. The obligation to equalize assessments to that end rests on the County Tax Board. N.J.S.A. 54:3-17, 18. However, since the County Board follows the same general method in determining average municipal ratios, as a matter of practice the Director's table is accepted ordinarily as prima facie correct, and therefore, usable by the Board in fulfilling its statutory obligation. But the Director's table is not binding and the board is not only free but is obliged to make its own independent determination in the face of evidence indicating error in the State table.
As we have said, the appealing municipalities allege it was error to use the single 1963 ...