Merck tax appeal adds $66 to municipal tax bill

A tax appeal settlement with the city’s largest taxpayer, Merck & Co., will cost the average taxpayer another $66 this year, on top of what was expected to be a $146 municipal tax hike for the average Rahway home. The City Council approved the settlement by a 6-0-1 vote during its meeting last week.

In a Feb. 16 letter posted on the city website, Mayor Rick Proctor explained how to read your property tax bill and the reasons behind the municipal tax increase, including a loss of $850,000 in state aid that contributed to $75 of the $212 increase. Since the city operates on a fiscal year, the third and fourth quarter tax bills sent last August were an estimate and represented 43 percent of the total amount due for the year, he said, while the first and second quarter bills received this month represent the remaining 57 percent.

The average assessed home in Rahway ($133,000) paid $2,507 in municipal taxes in 2010, and is expected to pay $2,612 (+$105) in 2011 and $2,648 (+$36) in 2012, according to the mayor’s letter. Additional clarification on Merck’s overall tax assessment is forthcoming and will be included in a follow-up post.

During last week’s meeting, First Ward Councilman Robert Rachlin said the settlement was not something the governing body was “doing lightly.” The city “got us the best deal possible,” he said and suggested moving forward expeditiously.
Fifth Ward Councilwoman Jennifer Wenson-Maier asked whether a special meeting held later in the week could be held to approve the settlement, or whether a delay would cause issues. Tax Assessor Richard Kulman said a delay could be a major problem because they’re also dealing with the Tax Court and they may not be able to meet that deadline. Further approval is needed from the county Board of Taxation, he added.
City Attorney Louis Rainone said the settlement discussions began in November and the city was presented a “window of opportunity” that could save having to refund taxes later in the year. “We’re able to keep the amount of out-of-pocket dollars for the city down,” he said. The council in January awarded a $35,000 contract to Coyle, Lynch & Company in Sharon Hill, Pa., to re-evaluate the facility owned by Merck & Co. at 126 E. Lincoln Ave.
After the resolution to approve the settlement was approved, Wenson-Maier said she abstained because the council only just receive the information that evening, and said it was “short notice to vote on a millions of dollars.”

3 thoughts on “Merck tax appeal adds $66 to municipal tax bill”

  1. Spending another 35K? We elimated the Tax assessor position and privatized it last year.Now they are spending more money to do this same work?A company in the private sector would be bankrupt if they operated the way they run this city.Merck is always an issue in Rahway over the years and either somebody missed this coming, or didn't plan at all for the fall out.They didn't know about this til Nov?Well they should have if the pay attention to what is going on in the plant. Why aren't city officials meeting with Merck once a month?They better get their act together fast, Carriage House Foreclosure, Debt piling up, now this.

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