On appeal from the Tax Court of New Jersey, Docket No. 20479-2010, whose opinion is reported at 26 N.J. Tax 1 (Tax 2011) and Docket No. 1746-2011, whose opinion is reported at 26 N.J. Tax 129 (Tax 2011).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne, Reisner and Hayden.
In these tax appeals, which we have consolidated for purposes of this opinion, plaintiff, the Township of Jefferson (Township), challenges the Table of Equalized Valuations promulgated by defendant, the Director, Division of Taxation, for the year 2010 (the Director's Equalization Table), to be used by the Commissioner of Education for the apportionment of school aid. The Township also challenges the Morris County Board of Taxation's 2011 County Equalization Table (the County Equalization Table), which is used in apportioning county government costs. In promulgating its County Equalization Table, Morris County adopted the Director's Equalization Table. For that reason, the Township's arguments apply equally to both documents.
The Township's challenges to the Equalization Tables were rejected by Tax Court Judge Bianco in published opinions. Twp. of Jefferson v. Dir. Div. of Taxation, 26 N.J. Tax 1 (Tax 2011) (Jefferson I) (considering the Director's Equalization Table) and Twp. of Jefferson v. Morris Cnty. Bd. of Taxation, 26 N.J. Tax 129 (Tax 2011) (Jefferson II) (considering the County's Equalization Table). The Township makes the same arguments on appeal.
As Judge Bianco observed in the first of his opinions:
Justice Brennan observed that some form of "equalization . . . has been a feature of our tax laws . . . [since] June 10, 1799." City of Passaic [v. Passaic Cnty. Bd. of Taxation], 18 N.J. [371,] 382 [(1955)] (citations omitted). "Equalization is the process of insuring that each property in every taxing district carries its fair, legal share of the burden of taxation." Division of Taxation, Department of the Treasury, State of New Jersey, Handbook for New Jersey Assessors, X-1 (1989). Our Supreme Court has held that: [t]he need for an equalization table and for a determination of the ratio of assessment to true value for school aid and county tax distribution stems from the failure of local assessors to assess property in their municipalities at true value or at a uniform percentage thereof uniformly applied by all municipalities. [Town of Kearny v. Division of Tax Appeals, 35 N.J. 299, 303 (1961).] [Jefferson I, supra, 26 N.J. Tax at 10.]
N.J.S.A. 54:1-35.1 requires that, "[o]n or before October 1 in each year the Director of the Division of Taxation . . . shall promulgate a table of equalized valuations to be used in the calculation and apportionment of distributions pursuant to the State School Aid Act of 1954." The equalization method used by the Director in determining the distribution of school aid and adopted by Morris County to ensure the equal, proportionate sharing of the county tax burden has been described by Judge Crabtree in his opinion in Bloomfield Township v. Essex County Tax Administrator, 12 N.J. Tax 543 (Tax 1992) as follows:
Using sales recorded in the 12 months ended June 30 of the computation year, a ratio is separately calculated for each of the four property classes: vacant land (class 1), one-to-four family residences (class 2), class 3a (farmland regular) and all others (commercial, industrial, multi-family apartments) (class 4). This ratio (a class ratio) is weighted, i.e., it is determined by adding all the assessments of the properties sold in the class, adding all the sale prices in the class, and dividing the former by the latter.
The next step is to determine the aggregate (or equalized) true value of the properties in each class. This is accomplished by dividing the aggregate assessments in each class by the class ratio. The aggregate true values of all classes are then summed and divided into the aggregate assessments of all classes of properties to produce the weighted, classified ratio for the computation year. Then that ratio is applied to the aggregate assessments to produce the aggregate or equalized true value for the computation year.
Finally, the equalized true value for the computation year is averaged with the prior year's true value (adjusted for added and omitted assessments), calculated in the same fashion. The aggregate assessments for the computation year are then divided by such average true value ...