Switz v. Kingsley

• Decision Date: 09 May 1961
• Docket Number: No. L--7018--60,L--7018--60
• Citation: 173 A.2d 449,69 N.J.Super. 27
• Parties: Olivia Wrightson SWITZ, Plaintiff, v. William KINGSLEY, Acting Director, etc., et. al., Defendants. P.W.
• Court: New Jersey Superior Court

Page 27

69 N.J.Super. 27

173 A.2d 449

Olivia Wrightson SWITZ, Plaintiff, v. William KINGSLEY, Acting Director, etc., et. al., Defendants.

No. L--7018--60 P.W.

Superior Court of New Jersey

Law Division.

May 9, 1961.

Herbert J. Hannoch, Newark, for plaintiff (Hannoch, Weisman, Myers, Stern & Besser, Newark, attorneys).

Alan B. Handler, Deputy Atty. Gen., for defendants Kingsley and Monmouth County Board of Taxation (David D. Furman, Atty. Gen., attorney).

KNIGHT, J.S.C. (Opinion delivered orally).

This matter is before the court on a motion for summary judgment by the plaintiff and a cross motion for summary judgment by the defendants, Director and the Monmouth County Board of Taxation. The defendants, Township of Middletown and William C. Johnson, filed an answer stipulating that they agree to be bound and controlled by any judgment entered herein.

At the outset the court must determine whether Laws of 1960, Chapter 51, N.J.S.A. 54:4--2.25 et seq., in permitting each County Board of Taxation to establish the percentage of true value which shall be used for assessment purposes contravenes Article 8, sec. 1, par. 1 of the the New Jersey Constitution, which requires that all real property shall be assessed according to the same standard of value. This question has been answered by two recent Supreme Court cases. In Village of Ridgefield Park v. Bergen County Board of Taxation, 31 N.J. 420, 425, 157 A.2d 829, 831 (1960), the court, in discussing the constitutional provision, stated that '(it) does not require that all real property taxed locally or for local use shall be assessed at true value. Rather it requires all such real property to be assessed 'according to the same standard of value,' which may be a percentage of true value.' And in Switz v. Middletown Township, 23 N.J. 580, 593, 130 A.2d 15, 22 (1957), that court stated:

'* * * It is mathematical truth that in this regard there can be no essential difference between true value and a common ratio of true value applicable alike to all in the same class. In either event, the base is true value, and the assessments are in fact made according to the same standard of valure. The question is whether there are variations of ratio making for substantial inequality in the distribution of the burdens of government violative of basic right.'

Thus, Laws of 1960, Chapter 51, does not contravene the Constitution in permitting a standard of value for taxation purposes which is less than true value.

Plaintiff argues that the provisions of the 1960 Tax Act violate the provision of the Constitution which requires that 'property shall be assessed for taxation under general laws and by uniform rules.' New Jersey Constitution, Article VIII, sec. 1, par. 1, since Chapter 51 permits each county to establish a different standard of valuation.

The basis of the constitutional provision is equality of treatment among taxpayers in like circumstances. Switz v. Middletown Township, 23 N.J. 580, 130 A.2d 15 (1957).

In his concurring opinion in Switz, supra, 23 N.J. at p. 609, 130 A.2d at p. 31, Chief Justice Weintraub recognized this fact in stating:

'It seems clear to me that all the taxpayers of a county are entitled to equal treatment with respect to the distribution of the cost of county government.'

Thus the question is whether permitting each county to set its own percentage of true value results in inequality of treatment among taxpayers within the same class. The real property taxes which a given taxpayer must pay are solely for the purpose of financing municipal and county government, as the State receives no revenue through the taxation of real property. Under this system it is clear that a land owner in Monmouth County is not assessed for the cost of government outside of his or her county. The Monmouth County land owner is in a different class from the land owners in other counties. Hence it is readily apparent that as long as all land owners in Monmouth County are treated equally, there is no discrimination. This also answers plaintiff's contention that permitting each county to establish its own percentage discriminates among veterans who are entitled to a $500 exemption from the assessed value of their real property. Since all veterans within a county will be treated equally, there can be no inequality.

Laws of 1960, Chapter 51, does not discriminate among taxpayers similarly situated in respect to the method of assessment of real property and consequently does not violate the constitutional requirement that property be assessed for taxation under general laws and by uniform rules.

Plaintiff also attacks that part of N.J.S.A. 54:4--1 which provides that 'In the assessment of acreage which is actively devoted to agricultural use, such value shall not be deemed to include prospective value for subdivisions or nonagricultural use,' asserting that such a classification is unconstitutional. Plaintiff argues that the use of the word 'deemed' creates a substantive rule of law creating an invalid classification of real property, while the defendant contends that the word 'deemed' serves to create only a rebuttable presumption that such agricultural lands do not have subdivision or other value. Plaintiff cites State Tax Commission v. Wakefield, 222 Md. 543, 161 A.2d 676, 677 (Md.Ct.App.1960), where the court struck down a provision of the Farm Assessment Act, Code 1957, art. 81, § 19(b) which provided that 'Lands which are actively devoted to farm or agricultural use shall be assessed on the basis of such use, and shall not be assessed as if subdivided or on any other basis'.

The provision was held unconstitutional as providing for land classification in violation of Article XV of the Maryland Declaration of Rights.

There would appear to be little difference between the Maryland statute and that under consideration here. The mere use of the word 'deemed' does not serve to cure an invalid classification. In its normal usage the word 'deemed' means 'adjudged' or 'considered.' If such was the usage intended here, there can be no doubt but that an absolute rule of law has been created. While it has been said that the term 'deemed' when used in a statute may in some instances establish a conclusive presumption, but in others only a rebuttable one, depending on the context of the use, Brimm v. Cache Val. Banking Co., 2 Utah 2d 93, 269 P.2d 859 (Utah Sup.Ct.), in the instant case it would appear that a conclusive presumption was intended. The statute is framed in mandatory terms and is, in effect, a command to the assessor, expressed in the negative, which would connote an absolute rule of law. As such the sentence in N.J.S.A. 54:4--1 which reads, 'In the assessment of acreage which is actively devoted to agricultural use, such value shall not be deemed to include prospective value for subdivisions or nonagricultural use' creates a classification of land contravening the Constitution, and must be stricken.

The removal of this provision does not invalidate the act.

N.J.S.A. 54:4--2.32 provides that if any clause, sentence, paragraph, section or part of the act shall be invalidated the remainder of the act shall be effective. The rule of severability is based upon the intention of the Legislature, the necessary determination being whether the enactment can remain as a comprehensive piece of legislation without the excised portion. If so, severability may be applied. Angermeier v. Sea Girt, 27 N.J. 298, 311, 142 A.2d 624 (1958). Here the removal of the invalid sentence does not create a void, since agricultural property will be covered by the remaining portion of N.J.S.A. 54:4--1.

Plaintiff also contends that the Legislature has no power to delegate the authority to fix ratios for real property assessment to the County Tax Board.

The power to levy a tax resides in the Legislature and may not be delegated to appointed officials, Township of Bernards v. Allen, 61 N.J.L. 228, 238, 39 A. 716 (E. & A. 1897); Van Cleve v. Passaic Valley Sewerage Com'rs, 71 N.J.L. 574, 581, 60 A. 214 (E. & A. 1905), although the Legislature may 'confer upon political divisions powers to legislate and provide revenue for defraying the expenses of the local governments,' Township of Bernards v. Allen, supra, 61 N.J.L. at pp. 237, 238, 39 A. at p. 719. However, while the basic power to levy a tax may not be delegable, certain incidents of that power are. This distinction was made by Justice Garrison in Van Cleve v. Passaic Valley Sewerage Com'rs, supra, 71 N.J.L. at p. 581, 60 A. at p. 217 wherein he stated:

'Every system of taxation consists of two parts--the elements that enter into the imposition of the tax, and the steps taken for its assessment and collection. The former is a legislative function conserved by constitutional prescriptions; the other is mere machinery. The latter may be delegated to other than governmental agencies; not so the former. Matters of computation, appraisement, adjustment, and such like, involving mere certainty of detail, follow the delegable power, in illustration of which the learned justice instanced the taxation of railroads and canals, the equalization of taxes, and the reassessment of benefits for improvements. But no element that enters essentially into the tax itself may be so delegated.'

Under the 1960 Tax Act the County Board of Taxation, an appointed body, is given the authority to 'establish the percentage level of taxable value of real property * * * for the purpose of assessing the taxable values to be used in levying taxes.' Thus the Board is merely empowered to determine the percentage of true value which shall be used for assessments.

The fixing of an assessment ratio is not an exercise of the power to levy taxes as it simply provides a formula to ascertain the tax rate to be applied. The ultimate tax burden is dependent upon the county and municipal budget, which authorizes the amount to be raised by taxation. R.S. 40:2--11, N.J.S.A.

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