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Township of Woodbridge v. Middlesex County Board of Taxation

Decided: July 7, 1967.

TOWNSHIP OF WOODBRIDGE, A MUNICIPAL CORPORATION, PLAINTIFF-APPELLANT,
v.
MIDDLESEX COUNTY BOARD OF TAXATION, ET AL., DEFENDANTS-RESPONDENTS



Lewis, Labrecque and Collester. The opinion of the court was delivered by Labrecque, J.A.D.

Labrecque

The Township of Woodbridge appeals from the affirmance by the Division of Tax Appeals of the table of equalized valuations adopted by the Middlesex County Board of Taxation (County Board) for the year 1966.

In City of Perth Amboy v. Middlesex County Bd. of Taxation, 91 N.J. Super. 305 (App. Div. 1966), certif. denied 48 N.J. 112 (1966), the table of equalized valuations adopted by the Middlesex County Board of Taxation for the year 1965 was affirmed notwithstanding the argument advanced that use by the County Board of the "unweighted" approach, referred to, infra, in determining the average ratio of assessed to true value of real property within the county, was in error. Woodbridge Township, which was a party to that appeal, raises the issue again, based upon new and additional proofs.

The purpose of equalizing valuations within a county is to secure an equitable allocation of the cost of county government on the basis of the true value of the ratables in each municipality therein. Specifically, Woodbridge contends that by reason of the erroneous use of the unweighted approach it has been required to pay $170,522.23 in excess of its proper share.

The county formulates its annual equalization table by use of the ratio of assessments of real property in each municipality to the true values thereof. By application of the ratio found to be applicable to a municipality to the

aggregate assessments returned by its municipal assessor, the County Board determines the aggregate true value of its taxable real property.

Prior to the year 1965 the County Board had used what is commonly known as the weighted, or classified, method in arriving at true value for equalization purposes. This was, and is still, the same method utilized by the Director of the Division of Taxation in his preparation of the table of equalized valuations used in the allocation of State school aid to local school districts. N.J.S.A. 18:10-29.30 et seq. It involved a review of all usable sales of real estate taking place in a municipality during a fixed period and their allocation to one of the following categories: (1) vacant land, (2) residential (four dwelling units or less), (3) farm, and (4) all other (including commercial, industrial, apartments, etc.). The average ratio for each category was then determined by dividing the aggregate of the sales prices of all sales in each category into the aggregate assessments levied upon the properties sold, and then applying the ratio thus found to the aggregate of the assessments levied upon all property in that category. The equalized valuations arrived at as to each of the four categories were then added up and the total found was then divided into the total of assessed valuations of the municipality to produce the final ratio. Manifestly this method emphasizes the amount of money involved in each sales transaction and by its use a large sale at a higher ratio may have an important impact upon a group of small sales at lower ratios.

Since the year 1965 the County Board has utilized what has come to be known as the unweighted method. This also begins with a study of each of the reported sales utilized in the weighted method, but calls for a determination of the ratio of assessment to sales price as to each sale in a given municipality. The individual sales ratios thus arrived at are added up and, then divided by the number of sales, to arrive at an average ratio to be applied to its total ratables. As will be noted, this method gives equal recognition or

weight to each sale regardless of the amount of money involved. The unweighted ratio is used to determine the "common level" in connection with the taxation of tangible personal property used in business. N.J.S.A. 54:4-11.

The equalization process is intended to produce the aggregate assessable real property in each municipality in the county for the purpose of intermunicipal apportionment in the county tax burden for that year. The statute, N.J.S.A. 54:3-17, provides no specific plan or method to be followed by the County Board in the carrying out of this function and any reasonable and efficient method may be adopted. Carteret v. Borough of Division of Tax Appeals, 40 N.J. Super. 439, 446 (App. Div. 1956), certif. denied sub nom. Borough of Sayreville v. Division of Tax Appeals, 22 N.J. 224 (1956). The purpose of the equalization process is to minimize "so far as possible the unfair distribution of the county tax which is one result of varying average assessment ratios" among the municipalities within the county. City of Passaic v. Passaic County Bd. of Taxation, 18 N.J. 371, 381 (1955). Exactitude is not required and a degree of imperfection is tolerated -- principally because individual assessments are not affected by the table. Carteret v. Division of Tax Appeals, supra, 40 N.J. Super., at pp. 446-447.

Upon appeal to the Division of Tax Appeals from a county equalization table the Division is charged with the identical function vested in the County Board in the first instance and where it is made to appear that the County Board was in error it becomes the duty of the Division to correct the error and promulgate a proper table. City of Passaic v. Passaic County Bd. of Taxation, supra, 18 N.J., at p. 393. After its review of the table the action of the Division is presumed to be correct and the courts will not interfere in the absence of an ...


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