Comptroller: Towns need to do better job of monitoring tax-exempt properties

TRENTON – The state Comptroller’s office has reported that three municipalities have granted tax-exempt status to 11 properties that were not eligible for that designation.

In an audit released Tuesday, the Comptroller found seven properties in Paterson and four in Middletown that were no longer being used for a tax-exempt purpose and have since been returned to the tax rolls as a result of the findings.

Comptroller Matthew Boxer said in a release that the total value of the 11 properties was over $2 million, and they would have been worth more than $50,000 in tax revenue.

On the good-news side, the Comptroller also reviewed the town of Bridgeton and found no problems with tax-exempt properties.

“Every time a municipality exempts a property from taxation, other property owners fill the resulting revenue gap,” Boxer said. “It’s important that local tax officials continually monitor exempt properties to ensure that they still qualify for that status.”

As of January 2011, tax-exempt properties accounted for about 12 percent of all assessed properties in the state, the Comptroller reported.

In the audit, which covered July 1, 2008 through March 21, 2013, the office found weaknesses in the way towns monitor tax-exempt status.

Boxer urged local officials to exercise greater caution before granting such status.

*In Paterson, the state found that among 17 properties under review, several were vacant land, and “others contained idle industrial structures or were being used by other organizations such as the county college.

“Other properties were very small or otherwise difficult to use for development. One property recently had been purchased for future use as a city parking lot.”

*Even obtaining information sometimes was a problem, according to Boxer. The reported noted that the office had to contact a series of Paterson officials just to obtain basic information. As a result, the Comptroller urged Paterson to designate a single location within its government to maintain information on these properties.

*The office urged Bridgeton to consider advertising certain properties for sale more aggressively.

Comptroller: Towns need to do better job of monitoring tax-exempt properties