ROXBURY, NJ – Consolidating Mount Arlington and Roxbury would result in almost $12 million per year in cost savings and cut about $1,000 per year from the tax bill of the average Roxbury property owner, according to a panel that’s been studying the matter for about four years.
Nevertheless, the idea is close to being scuttled because – due to an obscure part of state law - it would yield no tax savings for Mount Arlington property owners, said Roxbury and Mount Arlington Consolidation Study Commission Chairman Craig Heard.
The state’s municipal consolidation law requires that Mount Arlington’s tax rate be “equalized” with Roxbury’s during a consolidation by using a county equalization ratio, Heard said. While Roxbury recently finished a tax revaluation, Mount Arlington hasn’t done so in about a decade; if the towns are consolidated, all taxpayers would pay the same “consolidated” rate of 2.652 per $100 of valuation (for school and municipal taxes), he explained.
“Under the statute, in consolidations you are required to have an equalization,” Heard said. “Mount Arlington’s tax base is much lower than Roxbury’s. It’s going to have to be equalized with Roxbury … The bottom line is Mount Arlington doesn’t achieve a savings once you apply equalization.”
Millions in Cost Cuts but No Tax Break?
Heard said he received this information late Thursday and finds it hard to swallow, given the total projected cost savings of consolidation over the first 11 years: Around $100 million dollars.
“We got this new model yesterday from an independent accounting firm,” he said. “It says that, once you apply equalization, Mount Arlington doesn’t save. So, we have to look at what other alternatives there are to consolidation.”
One such alternative would be to focus only on consolidating the municipalities’ schools. Mount Arlington already sends students to Roxbury High School.
Heard said this idea, which would include selling under-utilized school buildings, would save nearly $5 million per year, according to the commission’s analysis. “In Roxbury, school enrollment is down by 700 to 800 kids over the last eight years,” he said. “So, there are a lot of vacancies; a lot of schools not at or near capacity.”
Time's Running Out
The commission will decide July 24 how to proceed. It must act by August if it plans to have a public question about municipal consolidation included on the Nov. 5 election ballots.
Heard said he’s been on the phone with officials in Trenton, hoping there could be a way around the equalization snafu.
“The most disappointing thing we saw is that if we’d be saving about $100 million over 11 years … and the only town that would benefit is Roxbury, then there’s something wrong with the statute,” he said. “You are penalizing the small town that comes into the bigger town.”
Gina Genovese, founder and director of pro-consolidation group Courage to Connect NJ, said the organization has long known the equalization element of the consolidation law was troublesome.
She said former Gov. Chris Christie blocked a proposed law that would have dealt with the matter. The bill set forth “a process for the efficient and economical equalization of the assessment on the properties of the new municipality for the apportionment of taxes.”
Part of the proposed law gave the state Division of Taxation director authority to “waive any law, rule, or regulation concerning the assessment of property that may not have anticipated a phase-in or consolidation of services if a waiver is found reasonable to further the process of consolidation.”
The independent firm hired by the commission, Laracy Associates, found that the average Mount Arlington property owner would save about $1,200 per year (15 percent), if the consolidation took place without the tax rate equalization imposed, and Roxbury would receive about $1,000 (9.9 percent).
These amounts are based upon Mount Arlington average property value of $290,900 and Roxbury of $343,247 per household. As an example, a property tax bill of $15,000 would receive a $1,500 tax reduction in Roxbury; in Mount Arlington, using the same $15,000 property tax bill, there would be a $2,250 tax reduction.
Heard said he, as chairman, is still looking for an equitable resolution working with the state Department of Community Affairs (DCA), which is involved in the municipal consolidation process