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What Services Do You Get For Our Municipal Tax Dollars?

For additional information on Township Services, please visit the West Windsor Township web site at www.WestWindsorNJ.org

How Does West Windsor Township Formulate Its Budget?
The township first calculates the needed revenues required to pay for the above captioned sevices, then determines all of the expected non-tax revenue. Examples of non-tax revenue are user fees, building permit fees, fines state revenue sharing and grants. The remaining funds needed to balance the budget are then raised via your property taxes.

How Is the Township Tax. Rate Determined?
The Township portion of our taxes is the amount that needs to be collected after determining what expenses are not covered by our non-tax revenues. This total amount of revenue is divided by the total "assessed value" of real property within the Township, thereby producing the annual, municipal "tax rate".

How is the School Tax Rate Determined?
Similar to the Township, the West Windsor - Plainsboro Board of Education prepares an annual budget to cover the cost to provide educational services to the overall school district. After subtracting their anticipated non-tax revenues from the budget, the Board of Education will then detern-dne the balance of funds needed to pay for their services. These funds will be raised via property taxes and the overall amount is allocated between West Windsor Township and Plainsboro Township based on their percentage of the aggregate "equalized assessed value" of taxable real property within both municipalities. For the 2002 tax year this computation coupled with the value of its utilities, is as follows:

West Windsor and Plainsboro Township Tax Data:	Total Assessed Values	Equalized Assessed Values	EAV %
TWP: WW
Assessed Value	$2,503,167,300
Utilities	+ $12,881,049
Total Taxable Value	$2,516,048,349
Total Divided by Ratio 0.7399
Is Equalized Assessed Value =		$3,400,524,867	61%
TWP: PB
Assessed Value	$2,056,806,700
Utilities	+ $5,763,694
Total Taxable Value	= $2,062,570,394
Total Divided by Ratio 0.9386
Is Equalized Assessed Value =		$2,197,496,691	39%
	Totals:	$5,598,021,558	100%

In 2002, on the basis of "equalized assessed value" of real property, owners of taxable real property paid school taxes based on the following breakdown:

West Windsor Township:
$1.8645 per $100 of equalized assessed value

Plainsboro Township:
$1.8059 per $100 of equalized assessed value

How is the County Tax Rate Determined?
Similar to the Township and the School District, the County Administration prepares a budget to cover the annual cost to provide various services to the overall county. After subtracting their anticipated non-tax revenues from the budget, the Administration (with the approval of the County Board of Freeholders) will then determine the balance of funds required to be raised via property taxes. The overall amount is allocated between each municipality based on their respective percentage of the aggregate "equalized assessed value" of taxable real property.

The Importance of Non-Residential Development to a Community
The composition of a communities tax base has a significant influence on the property tax that individual homeowners pay. As the percentage of the non-residential sector increases, the tax burden of the individual homeowner declines. Therefore, municipalities strive to attract quality, non-residential uses to their community, while utilizing well designed master plans to preserve and or enhance the resident's "quality of life". The following chart lists the current composition of property taxes for both West Windsor and Plainsboro Township for the 2003 tax year.

* "Residential" includes 1 to 4 family units. Facilities in excess of 4 units are classified as apartments.

Municipal Bond Rating
The debt of municipalities is typically assigned a credit rating by companies such as Moody's Investors Service ("Moody's), which indicates the credit quality of a municipality through the assignment of rating symbols ("Aaa".'Aa" "A" "Baa" $@Ball "B" "Caa" "Ca" "C") and rating modifiers ("1" "2" "3"). The highest possible rating is "Aaa" and the lowest possible rating is "C3". Currently, Moody's has assigned West Windsor a credit rating of "Aa2" and this "strong" credit rating is based on, among other things, "the continued growth in the sizeable, wealthy tax base of West Windsor", "conservative budgeting", and the "continued growth in the tax base has helped to support the town's debt burden".

The continued attraction of businesses to West Windsor, and resulting increase in the tax base, will further support the credit quality of the Township and reduce the tax burden on residents. In addition, the strong credit quality of the Township allows it to finance projects, as well as refinance its debt, at the lowest possible cost.

Your Property Taxes
The property tax is a local tax, which is assessed and collected by municipalities such as West Windsor Township in order to support the operations of municipal and county governments, as well as the local school district. The revenue generated by the property taxation system currently covers approximately 46.8% of last year's annual municipal budget. The remaining funds required to meet our budget is derived from other sources such as state aid, grants, and fees for services.

Property Valuation
The basis for collecting property taxes is the value of your taxable real property. Generally for property such as homes, the value is computed by comparing the recent sales of comparable homes to one another, as well as in the case of newer homes also computing the reproduction cost of the structure combined with its underlying land value. Other types of real property such as offices and retail facilities are valued via a combination of methods including reproduction cost, com' paring sales, andlor if applicable, measuring the economic benefits derived from leasing the property to a tenant. (Note: property such as schools, houses of worship and government facilities are valued but are ,.exempt" from property taxes.)

Property Valuation versus Property Assessment
While the "basis" for determining real property value in the State of New Jersey is 100% of a property's "market value", due to numerous factors including the ever changing real estate market and the significant costs associated with maintaining assessments, over time a municipality's ratio can fall well below 100%. Therefore the State utilizes a process known as "equalization" in order to insure that each property in each taxing district carries its fair, legal share of the taxation burden. Each year the State Division of Taxation in conjunction with the County Board of Taxation and the Assessor's office review all property transactions and after elin-dnating all sales which are considered "non-useable" (e.g. inter- fanifly sales, sales involving bankruptcy, estates, etc.) the State computes each municipality's "common level ratio" or "equalization rate". This ratio/rate is simply the overall average of the total assessed value of each (useable) sale, divided by the overall sale price of each property in the study. For example, if a home was assessed for $200,000 and it sold within the study period for $400,000, its "ratio" would be 50%. The sum total of all "useable sales" studied within the annual survey period produces each municipality's annual common level ratio. The common level ratio (assessed value -, market value) for West Windsor Township for the 2002 tax year was 73.99% and for the 2003 tax year it is 68.80%. The common level ratio for Plainsboro Township for the 2002 tax year was 93.86% and for the 2003 tax year it is 87.13%.

The equalization program is also conducted for two other major purposes: i.e., the equitable distribution of State school aid and for use by the County Board of Taxation in apportionment of the costs of county government and of school districts (such as West Windsor - Plainsboro) covering more than one taxing district. The process is also utilized in determining the fairness of your individual property assessment, noting that after determining the market value of your home, if your annual property assessment is within 15% of the municipal common level, then it is deemed correct. If it lies outside the "15% corridor", it warrants consideration for an adjustment.

For example for the 2003 tax year the Township's common level ratio of assessments to market value is 68.80% and the associated (acceptable) corridor ranges from a lower lin-dt of 58.48% to an upper limit of 79.12%. Therefore if you recently purchased your property for say $400,000 and it was assessed for $250,000, your assessment would be deemed correct since your current assessment to market value ratio is 63%. ($250,000 @ $400,000.) On the other hand if the same property were assessed at $350,000, the ratio of assessed value to market value ($350,000 - $400,000) would lie at 87.50%, which is above the current upper limit. Any property owner that can prove, through the use of their current sale or comparable sales that their property assessment lies above the current upper limit of 79.12%, should consider filing an assessment appeal with the County Board of Taxation prior to April 1, 2003. Appeal forms can be picked up at either the municipal building or at the office of the County Board of Taxation.

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