Kilkenny, Labrecque and Leonard. The opinion of the court was delivered by Labrecque, J.A.D.
The Township of Millburn appeals from the affirmance by the Division of Tax Appeals (the Division) of the equalization table adopted by the Essex County Board of Taxation (county board) for the year 1969.
Millburn underwent a revaluation during the year 1968. Its tax list for 1969 reflected the revalued assessments and resulted in an aggregate of assessed real estate which substantially exceeded that for the prior year. The Director of the Division of Taxation had prepared a suggested formula for use by the assessors of revalued districts in arriving at
the ratio of assessments to true value. This formula, which is designed to establish a new ratio of assessments to true value for the year following revaluation through a comparison with the aggregate for the prior year, may be summarized as follows:
The value of the ratables on the Added and Omitted Assessment List and the value of all additional ratables, such as new construction and improvements and property transferred from exempt to taxable, are added to the total of the ratables for the district as shown by Director's table for school aid for the preceding year under N.J.S.A. 54:1-35.1. Then the value of all ratables lost by fire, demolition and transfers from taxable to exempt is deducted. The resulting total, designated as "Net true value at beginning of the new year" is then divided into the aggregate of assessments produced by the revaluation and the resulting figure is the ratio of assessments compared to true value produced by the revaluation. (Emphasis added)
In calculating its ratio under the formula Millburn deducted not only the ratables lost by fire, demolition and transfers from taxable to exempt status, as authorized by the Director, but also the sum of $2,564,100 representing claimed reductions in ratables for the prior year as a result of judgments on contested appeals from assessments. The county board declined to accept Millburn's computation and, applying the Director's formula, fixed its ratio at 104.24%. Had the county board permitted Millburn to deduct the additional sum claimed, its ratio would have been 105.20%. If Millburn's contention had been upheld, its practical effect would have been to bring about a reduction in Millburn's equalized valuations and a consequent decrease in its share of the cost of county government.
The county board's annual preparation of the county equalization table, pursuant to N.J.S.A. 54:3-17, is to be distinguished from the preparation of the Table of Equalized Valuations which the Director of the Division of Taxation is required to promulgate on October 1 of each year for purposes of state school aid, N.J.S.A. 54:1-35.1. The county board's table is for the purpose of apportioning the burden of the cost of county government among the
various taxing districts in the county. Thus, any reduction in the share of one taxing district must be made up by the remaining districts. In the case of the school aid table, however, any reduction or increase in the amount payable to a school district in the form of school aid does not affect the amount payable to other districts. In practice many county boards follow the Director's table as accurately reflecting the equalization ratios for the following year.
The function of the Division of Tax Appeals upon a showing of error by the county board in its preparation of the equalization table is the same as that charged to the county board in the first instance, i.e. , to call a hearing of the taxing districts of the county and promulgate a new table. Passaic v. Passaic County Bd. of Taxation , 18 N.J. 371, 393 (1955); New Brunswick v. Middlesex County Equalization Table , 25 N.J. Misc. 353, 53 A.2d 641 (Div. Tax App. 1947). Millburn contends that the refusal to permit it to deduct the loss in assessments due to reductions granted as a result of tax appeals during 1968 was error which required the county board to promulgate a new table. We are thus confronted with a single question -- whether it was error for the county board to follow the Director's formula.
In addition to Millburn, three other taxing districts had undergone revaluations for 1968 so that, at least, they too, would have been entitled to the benefit of the claim now made by Millburn. They have not appealed.
It is to be noted that the ratio arrived at by the county board is applicable for 1969 only. The formula is used only to fix the ratio for the year following a revaluation. Thereafter, the ratio is arrived at from sales ratio studies made on a continuous basis under ...