TRENTON – Both the Senate and Assembly approved legislation today sponsored by Senate Shirley K. Turner that would require all historic sites granted property tax exemptions after 1999, including Princeton’s Cottage Club, to follow current requirements in order to keep that exemption.
“Every time the State grants a property tax exemption, it places a further burden on the other property owners in that town,” said Senator Turner, D-Mercer. “The privilege of being exempt from a community’s financial obligations must be balanced with increased participation in the community’s cultural and educational well-being. To do anything less is abusing the system.”
The bill follows a 2004 law sponsored by Senator Turner that requires new historic sites seeking property tax exemptions to be open to the public for at least 96 days each year. The previous requirement was that the site be open 12 days each year.
A recent decision by the New Jersey Supreme Court allowed the Cottage Club, a private club at Princeton University, to qualify for an exemption under the old requirements because their application was pending at the time the law went into effect.
“The State Supreme Court read the law differently than we had intended and found that the Cottage Club could sneak in under the old standard. In effect the Supreme Court has allowed the club to shirk its responsibility to Princeton Borough and severely hampered the town’s ability to provide services to all of its residents,” explained Senator Turner.
Senator Turner noted that the 2004 law grandfathered in existing historic sites because they were no longer part of the local tax base and municipalities were used to not having them pay property taxes.
“Our goal in 2004 was to prevent those groups looking to game the system from receiving a free pass. There are many excellent organizations in New Jersey who use these exemptions to preserve historic treasures for present and future generations to enjoy and we wanted to make sure they could still operate,” said Senator Turner.
The Senator’s bill, S-2808, would clarify the intention of the original bill from 2004 and make sure that unless the site had received their exemption before 1999, they must comply with the 2004 standards. The change applies to applications that were pending or denied and on appeal because those properties were not already relying on the tax exemption.
Senator Turner noted that Princeton Borough now looks to lose $60,000 a year because of the Cottage Club exemption, on top of $320,000 they would be required to refund the club on taxes paid over the last few years.
The bill passed the Senate by a vote of 32-5 and the Assembly by a vote of 59-18-3 and now goes to the Governor’s desk for his signature.