Locals react to state's data on property-tax ranking

BY JANE MEGGITT
Staff Writer

Community representatives from municipalities in the Examiner's coverage area reacted to the state's recently released 2000-05 property-tax data this week.

The state Department of Community Affairs (DCA) released property-tax data that revealed Roosevelt ranked No. 1 in Monmouth County for the lowest percentage change in its tax levy between 2000 and 2005. The data shows Upper Freehold at the other end of the spectrum with the highest percentage change in its tax levy in the county.

Roosevelt's tax levy decreased by 3.9 percent between 2000 and 2005, which made it the fourth lowest percentage change in the state, whereas Upper Freehold had an almost 118 percent increase in its tax levy, ranking it the third highest percentage change in the state.

Roosevelt Councilman Michael Hamilton said, "Good planning has a lot to do with being able to keep taxes down."

The borough was the only town in the 53 municipalities surveyed in the county that actually had a decrease in its percentage change in the tax levy between 2000 and 2005, according to the DCA.

Unless a town has excess infrastructure to piggyback onto, Hamilton said, empty seats in its schools and extra municipal service capacity, residential development usually is a net tax liability.

"Realizing that early on, we chose not to court developers, but rather to preserve farmland and open space," he said of Roosevelt.

The amount of farmland in the borough's tax base increased by .2 percent in 2005. The borough's residential development also increased slightly by .6 percent, according to the information provided by the state.

Hamilton said that Roosevelt has not sought to expand through residential development. He said people often forget that farmers pay taxes and require far less in municipal services than homeowners would.

Hamilton noted that education is by far the most expensive service. In many towns, he said, school taxes account for more than three-quarters of a homeowner's property-tax bill.

"The towns that sought residential development are discovering that residential development almost always costs more than it yields in tax revenue," he said.

Hamilton said that because Roosevelt is very small, its citizens and government officials know that each dollar matters.

"In Roosevelt, even the phone bills are reviewed line by line to look for savings," Hamilton said. "One thing that I feel is unique about our volunteers on the school board and the council is that we have many creative thinkers who often look for alternative ways to keep costs down."

Hamilton said Roosevelt is a good example of how small towns can be effective and efficient, often more so than much larger towns.

Between 2000 and 2005, Upper Freehold's total tax levy increased by $9.9 million. During that time frame, its tax rate increased by 60 cents per $100 of assessed value to $3.07, according to the DCA.

In 2000, 21.8 percent of the Upper Freehold's tax base was considered farm property. That number decreased to 14 percent by 2005. The residential tax base of the township rose 10.3 percent from 2000 to 77.7 percent in 2005. The commercial tax base of the township decreased .3 percent from 2000 to 2.9 percent in 2005, according to the DCA.

Upper Freehold Mayor Stephen Fleischacker said he recognizes that any indication of a significant increase in property taxes over any given period is a concern.

"We at the local level," Fleischacker said, "must make sure that any future request for increased municipal spending is well substantiated and absolutely necessary for the health, safety and well-being of our community."

Fleischacker said the township's government cannot rely on the line "we are a growing town" as a sufficient and appropriate justification for increased spending.

"In the absence of real property-tax reform," he said, "local governing bodies must be more vigilant than ever to minimize the spending of taxpayers' money."

Fleischacker considered public reactions to the property-tax study and said he could see people saying, "Stop growth in our township" and "Increase the ratable base to decrease reliance on homeowner property taxes." Considering these reactions, Fleischacker offered his own.

"I ask our residents to inquire, 'Does our municipal government have the authority to stop growth?' " he said. "If not, to what practical extent does our governing body have the authority to limit growth?"

Fleischacker alleged that the courts could easily overrule local decision making about stopping township growth.

"[This] would not only fail to accomplish the goal of slowing growth and taxes," he alleged, "but [also] add to the municipality's operating budget for mounting unnecessary legal defenses."

Fleischacker said that the best practical approach to successfully managing growth is to provide economic incentives for landowners to preserve their property and to pursue density transfer options.

"In this way, we can reduce long-term infrastructure and municipal service costs through strategic, long-term planning," he said.

When asked to comment on why neighboring Millstone's rise in the property-tax levy over the past five years was 51 percent lower than Upper Freehold's, Upper Freehold Deputy Mayor William Miscoski - who is serving his fourth term on the governing body - said, "Liars figure and figures lie." He declined to comment any further on the matter.

According to the Department of Community Affairs, Millstone Township had a 17-cent decrease in its tax rate from 2000 to $2.31 per $100 of assessed value in 2005. However, the total tax levy increased by $12.3 million from 2000 to about $30.6 million in 2005.

Millstone Committeeman Elias Abilheira said the data "clearly shows that residential development raises taxes." He added that rising school taxes go hand in hand with residential development.

Abilheira said that his town made major financial reform and zoning changes in 2004 and 2005, correcting and refining changes to its master plan. He said these changes, such as downzoning to 6-acre and 10-acre lots for development, were likely an important element in Millstone having a much lower tax increase than neighboring towns that experienced similar growth.

"These reforms were crucial in allowing Millstone to avoid the larger increases faced by other towns with similar growth spikes," Abilheira said, "and our plan to secure intelligent ratables on our highway corridors will further aid in providing a soft landing.

"Without these vital changes in the last two years," he continued, "Millstone's tax increase would have been far greater and exceeded that of Upper Freehold."

Abilheira said the reason for the tax adjustment in 2004 and 2005 was that prior committees were borrowing millions of dollars each year to conceal the true tax rate.

"They were hiding the real cost of government by making interest-only payments on the debt they were accumulating," Abilheira said. "Two years ago, we decided to reverse this financial mess and pay down debt.

"This year alone," he added, "we will pay off more debt than prior committees paid off in any five- to 10-year period."

Abilheira said the township plans to bring in new ratables to its highway corridors, which would help stabilize school taxes and not increase burdens on township schools, according to Abilheira.

"We are also working with the schools to find more ways to enter shared services agreements to increase savings for the taxpayers," he said.

Upper Freehold resident Cy Thannikary is the chairman of Citizens for Property Tax Reform, a statewide, independent citizen group concerned with the ever-increasing property taxes in New Jersey and its crippling effects on millions of homeowners in the state. When asked about the percentage of the tax levy increase in Upper Freehold, Thannikary responded, "It is unfortunate that the older residents in our town who paid their dues [and] served this community through their churches, synagogues, temples, schools and other community initiatives had to face such an enormous increase, especially at the twilight of their lives."

He quoted former Gov. James McGreevey's statement that "New Jersey's property tax is a tax without a conscience."

Thannikary said he believes the blame really rests with the unfair and regressive property-tax system, as New Jersey's property tax has no relationship to an individual's ability to pay. He said that makes it harder for the poor and for those on fixed incomes.

"That is the reason why we, Citizens for Property Tax Reform, advocate for a fundamental change in New Jersey's property-tax system," he said. "We believe New Jersey's property tax must be based on one's ability to pay and not ... on where one lives."

Thannikary said the question is who should bring about such a change. He said it is the responsibility of state legislators to address the property-tax issue and to make the system fair for all citizens regardless of where people live. He noted that those elected have failed to address this issue for more than 30 years.

"The career politicians in Trenton who hold two and sometimes three taxpayer-supported jobs - 42 of our 120 legislators hold more than one government job, while 32 states in the Union prohibit such practices, including Indiana where one will go jail [for holding more than one government job] - do not want to kill this golden goose," he said. "And we elect them over and over without making them accountable for their action - [or] in this case, inaction."

Thannikary said he supports a "citizens' convention" on property-tax reform.

"What our residents could do is organize themselves, raise their voices and demand property-tax reform now from the governor and our state legislators," he said. "If they don't [make a change], vote them out in November 2007.

"Democracy's defining feature is the freedom to hire or fire your government," Thannikary added. "Isn't it time we vote these career politicians out of office?"