Fifty years ago, this fall, I was ten years old selling pumpkins in front of my father’s farmhouse, on route 130, in South Brunswick Township, in Middlesex County New Jersey. It was 1956 and the corn had not yet been cut. My father was a state trooper that received two weeks of vacation each year. One week of vacation in the spring he took off to plant the corn and then he would take one other week off in the fall to harvest it.
Those 30 acres of corn helped to pay the property taxes on the farm. Farm taxes had increased substantially because of a very large new housing development built on the western side of town called Kendall Park. Kendall Park was called the plywood jungle because the homes were all made of plywood. Was I ever shocked to discover that my first house in Whiting New Jersey in 1976 had only plywood corners. Back to the farm, the corn crop just about paid the property tax bill. The price for most farm commodities, including corn, has not increased much since that time.
RATABLE GROWTH AND TAX PRESSURE
Now, that new development called Kendall Park was really starting to put a big strain on the local school system and a new high school was going to have to be built. The town’s mayor and council realized the town had not been revalued in many years and called for a revaluation of all property in town. Well the son of the owner of the revaluation company, who was running his first revaluation job for his father’s revaluation company, made a mistake and valued my father’s total 50 acre farm at its full housing developmental value. This value was based on other road front lots that had been sold off by local farmers. Even though my father’s farm had minimal road frontage for a 50 acre farm he was assessed as if all 50 acres fronted on route 130. No downward adjustment had been made for the infrastructure costs associated with developing the property for a housing development tract.
After speaking with the local tax assessor that valuation mistake was corrected for my father and other farmers in the area. Between the soaring school taxes to build the new high school and a higher post revaluation assessment our farm’s taxes skyrocketed upward. My father and his farmer friends were not happy with the resulting high annual property tax burdens they were facing. The annual corn crop would no longer pay the high annual property tax on our 50 acre farm. Now when the new high school opened its doors in 1961 many new teachers had to be hired and again the property tax bill on the farm increased substantially.
TRENTON RESPONDS TO FARMER’S TAX PROBLEM
About this time the local farmer’s grange started to invite their local assemblymen and state senator from middlesex county to the local grange hall to have discussions about this property tax problem the farmers were having. Many of the farmers attending these grange meetings were gentle giants, they had meat claws for hands from years of hard farm labor, had skin like leather from years working under the hot sun, and were as strong as an ox. When a local legislator was buttonholed (they actually did stick their index finger in the button hole of their legislator’s jacket) they stayed buttonholed. When the local legislators returned to Trenton they reported the anger over the property tax that they encountered there in South Brunswick Township at the local farmer’s grange to their legislative leadership.
I suspect that this scene of legislators speaking with unhappy farmers was repeated many times throughout the state … at many different venues. The reason farm property was given lower differential property taxation treatment quickly under the “Farmland Assessment Act of 1964,” without the benefit of a constitutional amendment to satisfy the uniform valuation standard in the state’s constitution, may have had something to do with the heat that local legislators were feeling from their farm constituents
NEW JERSEY’S UNIFORMITY STANDARD
The New Jersey Constitution states “Property shall be assessed for taxation under general laws and by uniform rules. All real property assessed . . . shall be assessed according to the same standard of value, except as otherwise permitted herein . . ..”
The phrase otherwise permitted herein now refers to two other constitutional provisions. One, authorizing: an agricultural or horticultural use value standard for qualified farms (adopted in 1966 as a constitutional amendment in New Jersey by the voters). And, a second one, a cost value standard used when abatement from taxation on buildings and structures is granted, in areas declared in need of rehabilitation, in accordance with statutory criteria
BACK ON THE FARM.
By 1966 my father had taken his state pension and was living on one half pay. The taxes on the farmhouse and the modest taxes under the farmland assessment act were now an even bigger burden on him. By 1973 my father could no longer afford the property taxes on the farm and he sold the farm to a large corporation. As was common in farmland sales contracts of the day “any and all rollback taxes owed on the farm” were paid by the buyer. Generally, the buyer paid less for a farm because three years of rollback taxes had to be paid. But I believe in the case of my father’s farm sale that was three times the going price for comparable farmland that the buyer ate the rollback tax completely.
In 1966 the statewide total property tax rate after adjusting it to a market value tax rate was about $3.00. Therefore the average buyer who paid three years of rollback taxes paid about 9% of the purchase price of the farmland sales price to the municipality wherein the farmland was located. In 2006, 40 years latter, the statewide market value tax rate is about $1.75. Therefore today, the buyer pays about 5.25% of the purchase price of the farmland sales price. That amounts to only 58.3% of the rollback tax that was paid 40 years ago in 1966. Could the lack of legislative interest in adjusting this rollback tax on home developers to the original year of the program have anything to do with the fact that one of the largest political contributors to both political parties in Trenton are the home developers?
Recently, Governor Corzine said that property tax reform had to go forward notwithstanding the 600 pound gorilla special interests in Trenton. Well, easy for him to say with his personal wealth, he does not have to go to the home developers for political contributions to get re-elected. To adjust the rollback tax program to the standard used 40 years ago would entail changing it from a three year roll back period to a five year rollback period. Fat chance that will happen to help the muncipalities pay for the extra planning and zoning board work the new housing developments cost .. not to mention the new service demands they create leading to higher property tax costs.
THE REST OF THE STORY
On with the farm had to be sold story. The corporation that bought the farm, and a few other corporations who owned it afterwards, paid local farmers to continue to farm the property to keep it under the farmland assessment act. So, after my father’s farm was sold in 1973, the land was banked by different corporations as an investment and latter sold to a housing developer. That housing developer started to break ground for his housing development in 2003 … 30 years after the farm was sold by my father.
Many people traveling down route 130 over the years enjoyed the visual open space scene of the farm being farmed, sometimes hunters were permitted to hunt on it, over those thirty years no school children had to be educated who resided on that property, it required little if anything in the way of municipal or county services … it was a cheap ratable for the local government as far as service demands were concerned. It was also a cheap taxpayer … under the farmland assessment program the owners of the farm paid only
about 10% of what other non farmland qualified farm property paid in property taxes in the early years and maybe as little as 1% in the latter years. Yes, some owners of vacant land did not sign up for the farmland assessment program because they could not meet its requirements or did not want to be subject to its three year rollback tax provision.
That is the story of one farm that had to be sold because of property taxes. The price received per acre for that 50 acre farm in 1973 is about the same price as a single home buyer now pays for a single home located on that farm.