Public Hearing as State Intensifies Probe into South River's Property Taxes

South River, NJ - The New Jersey Dept. of Treasury will hold a public hearing in South River later this month as part of the state's mandate to force certain New Jersey towns to do a property tax reval — something the borough of South River has not done in 30 years.

"The Division of Taxation is taking this action because of repeated failures by the Middlesex County Board of Taxation to provide proper oversight," said a spokesman for the state Treasury Department, Joe Perone. "Members of the Middlesex Board have demonstrated an astonishing lack of competence by ignoring their constitutional obligation."

The hearing in South River will be at 6 p.m. on Tuesday, July 26 at the South River VFW. Any South River property owner or resident is invited to attend and encouraged to testify.

The 2015 market value of property in South River exceeds the assessed value by $925.8 million, the state says. Similar public hearings were held in Dunellen, Jersey City and Elizabeth, and the state then ordered those three towns to undergo a mandatory tax revaluation. The towns resisted, but eventually complied.

By law, the state Treasury Dept. is required to hold public hearings and receive comments from the citizens of South River as part of its investigation to determine whether a revaluation should be ordered for the municipality, Perone said.

"Senior Division personnel will conduct the meeting and will listen to what residents have to say about their experience in paying property taxes in the Borough," he said. The state will not likely make any sort of presentation at the July 26 hearing.

Starting in November of 2015, the state launched investigations into several municipalities that state officials say have been delinquent in doing property revaluations, which are required by law. The Treasury Dept. started with Dunellen, Jersey City and Elizabeth. In April, the Division concluded its investigations and ordered all three to conduct revaluations.

Then, this spring, the state announced it was expanding its probe to include 5 more towns: South River, Harrison, East Newark, Westfield and Winfield. Subsequently, the Union County Board of Taxation ordered Westfield and Winfield to conduct revaluations, and the Hudson County Board of Taxation did the same with Harrison and East Newark.

But the Middlesex County Board of Taxation took no action, Perone said.

"So, the Division is moving ahead with its investigation of South River," he said. "The purpose of a revaluation is to distribute the property tax burden equitably among all property owners within a municipality according to the true value of their property. Middlesex is the only county in the state that has not ordered an involuntary revaluation in two decades. Members of the Middlesex County Board have a fiduciary responsibility to recommend revaluations, where warranted. Instead, they ignored the mandates of the State Constitution and shirked their responsibilities."

All five towns — South River, Harrison, East Newark, Westfield and Winfield — have a Director’s Ratio that is among the lowest in New Jersey, he said. That ratio represents the relationship between the assessed value and the true value of all property. A ratio that is lower than 85% is considered not in compliance with the State Constitution, which requires uniform taxation. South River's Director’s Ratio is 30.82%.

The mayor of South River, John Krenzel, told NJ.com he will be at the July 26 public hearing, and that he reached out to the state to meet privately but has not heard back.

"What I would say to them privately I will say to them publicly," he said. "This is not the right time to do it."

He said South River is still feeling the effects of Hurricane Sandy, as nearly 60 homes have already been razed and the borough may lose another 60 under the state's Blue Acres buyout program, according to NJ.com.

New Jersey State House/Wikimedia Commons