*1 Eor the reasons above, expressed judgment Ap- pellate Division is reversed and the cause is remanded to the Division of Workmen’s for further Compensation pro- ceedings consistent with this opinion.
For reversal and remandment —Chief Justice Weintraub, Justices Jacobs, Pboctor, Hall, Sullivan, Mountain and Judge Coneobd —7.
For affirmance —None. THE MEADOWLANDS REGIONAL REDEVELOPMENT (AND AGENCY, CASES), ET AL. CONSOLIDATED PLAIN TIFFS-APPELLANTS, JERSEY, v. THE STATE OF NEW DEFENDANT-RESPONDENT. IN THE MATTER OF THE APPLICATIONS OF THE MEA AGENCY, AL., DOWLANDS ET REDEVELOPMENT LOUIS MELILLO, JR., AL., MONTENEGRO AND PHILIP ET SECAUCUS, AND TOWN OF ET AL.
Argued February 23, Reargued February 5, 1973— 1972.- May 7, Decided 1973.
Mr. Lewis M. Holland argued cause for appellants Town Secaucus, et al.
Mr. Ralph W. Chandless the cause argued for appellants Township Hackensack, South Louis Philip Montenegro, Melillo and Board of Education of the Township South Chandless, Kramer, Hackensack (Messrs. Weller & at torney's). Porro, Mr. A. Jr. aygued cause for appellants Alfred
the Meadowlands Regional et Development als. Agency, Porro, (Messrs. & Conaghan Murray, attorneys). SMllman,
Mr. Stephen Assistant Attorney General, argued the cause for respondent State of New Jersey M. Joseph (Mr. Jr., Clayton, Deputy General, Attorney on the brief; Mr. *4 Jr., P. George Kugler, Attorney General of New at- Jersey, torney). This appeal involves the Hackensack
Per Curiam. Meadowlands Reclamation and Development Act and ancil- L. lary legislation 1968, c. 404, the constitutionality of which was upheld by the trial in an court opinion reported 112 at N. J. 89 Super. Div. (Chan. 1970). a legisla A. et Act, seq., represents
The N. J. S. 33:17-1 Hack of the reclamation and development tive for the plan a Commission a basis ensack meadowlands on regional State, with inter- a subdivision of constituting political bur benefits tax tax respective of the municipal sharing ancillary The development. dens from resulting planned a pro J. A. :1B-13.1 et establishes seq. N. S. legislation, meadowland of title problems cedure for the resolution the State. properties throughout at Super. N. J. supra,
The court’s opinion, trial background an of the 95-100, procedural contains outline which provisions of the law’s summary ease as well as a of the need he repeated. we find to be not adequate numerous from attacked was legislation Although Act it were: (1) to challenges the basic angles, legal manner pre- in the law not enacted or local was special Act Constitution; pro- Jersey (2) New scribed zoning of the legislative an delegation vided unconstitutional provisions Commission; tax-sharing (3) to the power Commission, to taxing power delegated improperly (a) for the municipalities constituent on the taxes imposed (b) constituent outside regions State or of of the entire benefit real allotment and provided municipalities, mu- other to raised some proceeds tax to in their arbitrary application were nicipalities, (c) municipalities. constituent court trial was to the presented evidence Considerable classification the reasonableness relating well as the district, as a separate meadowlands as Hackensack district. fixed for such boundaries found the opinion
The trial court comprehensive be constitu- law and the legislation Act to he general the contentions lawful, all of rejecting tional and otherwise the appeal certified We raised invalidity plaintiffs. Division. Appellate hearing prior February before this Court was had Argument concern over the expressed the Court 1972. At the argument *5 fairness of the as to constitu- tax-sharing provisions applied ent State was asked to sub- municipalities. Accordingly, the mit available of the figures showing projected operation of such tax-sharing provisions. Following receipt figures and Court conference with counsel their tax- requested sharing experts. At the conference it was indicated that the State seek have might provisions to amended tax-sharing to remedy possible Upon deficiencies therein. notified being amended, the State have these proposed provisions to this Court withheld decision.
Amendments were drafted and into law on signed July 1972, c. All were ex- (L. 103). parties leave given to the amended tax- change supplemental briefs addressed sharing provisions the matter was reargued February 5, 1973. Court, of the Because changed composition were parties afforded the the entire opportunity argue de novo. appeal
We are full with basic agreement findings of the trial conclusions court as to the issues raised and its upholding constitutionality validity of the legis lation. We find necessary discuss specifically only contention that the amended are ar provisions tax-sharing bitrary their to the constituent application municipali ties. recognize appellants We also contend that Act, provisions of the both as enacted tax-sharing originally form, and in their amended work an unconstitutional dele well as unconstitutional al gation taxing power However, lotment of local tax revenues. these is sues were decided the trial court and its conclusions thereon, with which we of these con agree (our acceptanсe a full clusions should not be taken as of the trial adoption with these are issues), court’s opinion dealing equally ap to the amended provisions.1 plicable special whether 1It is also contended that the issue Act original local law is before this Court decision virtue of proceedings Appellate filed in the Division under N. J. S. A. *6 The principle underlying tax-sharing provisions of the Act is that the regional development district under the Master Plan2 -will in tax benefits to result some areas within the district, as well as tax impose burdens or losses on other areas. The provisions, amended, as are intended to have constituent municipalities share in equitably these benefits and burdens.
The mechanism for achieving sharing purpose centers around the “intermunicipal account” which is to required be set on an up annual basis and into which constituent will have an obligation to or a pay right receive payments therefrom based on application of statu- tory formula which converts the tax benefits and tax burdens into dollar into or payments out of the account.
The brief filed by the General Attorney summarizes of operation the formula as follows: revenues, except required county- “All increases in tax thоse to meet taxes, year ‘adjustment year’ (1970) between base and an attributed municipality in increases true value of the in each within ascertained, gradually increasing the meadowlands district are and a percentage payable by municipality of this revenue is each to the in- termunieipal 1972, 4, 103, account. L. § N. J. S. c. A. 13:17-67.- municipality, eligible, Each where is entitled in- to receive from the termunieipal guarantee payments (§5, 13:17-68), account N. J. S. A. payments (§7, 13:17-70), school service district A. N. J. S. and an apportionment payment (§9, 13:17-72). pay- A. N. J. S. Guarantee municipality’s
ments are made where a meadowland district tax base disagree. Proceedings 1:7—4. We under that statute are limited to an — “upon only procedure making machinery attack laws on the n —(cid:127) upon validity of enactment itself.” Div. and not the constitutional of the law Super. Application McGlynn, (App. In re 58 N. J. 1959). Attorney Appellate Here the General conceded before the special had Division that the Act so that the been not enacted-as a or local law only remaining machinery as issue of enactment (also by appellants) signed by raised was whether the had been law days presentation. Consequently the Governor within 10 considеration of the issue whether the Act is valid after our general legislation is limited to a review of the trial court’s determination thereon. adopted by 2 Afinal Master Plan was the Commission on November 8, 1972. public acquisitions. service School as a result of been contracted has payments educating new meadowland cover the costs of are made to provides apportionment payment pupils. any remaining for the district school intermunicipal account on funds in the distribution the basis municipal acreage district. within the computation provides ‘meadow- A. :17—74 N. S. J. municipality. adjustment payment’ If a mu- to or from each lands nicipality’s payment intermunicipal exceeds the account into the payments is entitled to receive out amount of service total intermunicipal account, special line item the difference is entered paid year municipal budget and is appropriation intermunicipal A. N. J. S. account. installments to the three annual intermunicipal payment 13:17-74(c). account into If the account, payment is shown as the difference than out of the less total municipal budget anticipated’ and is 'miscellaneous revenues equal intermunicipal paid N. J. instаllments. account three adopted accounting procedure 13:17-74(b). for ease A. This S. intermunicipal ad- ‘meadowlands account. The administration *7 justment payment’, figure, with its two should not confused a net be account, components municipal payments and school into the distinct service, guarantee — payments apportionment out of the account.” and in a The amended corrected manifest provisions inequity a “apportionment formula which had used original single the intermunicipal rate” to calculate municipal payments rate, an based on com- account. This rate single average had an ad- bined of all municipalities, budgets constituent amend- with low tax rates. The municipalities verse effect on for a rate” for each ment provides separate “apportionment rate, which effective true tax ex- really is its municipality county expenses. cluding un
The method of rate computing apportionment der the a mu amendment is attacked on the ground that nicipality’s non-district will affect the amount expenses pay able it to fund. is that the intermunicipal suggested It fair only solution a uniform and tax rate for all assessment to the meadowlands participating municipalities, limited district. however, would Commission require concept,
This taxes, an levy to make assessments have direct power and which some rejected, which the Legislature alternative would unconstitutional. have previously argued appellants The amendment also eliminated the municipal county service .payments, but limited amount payable by municipality to oí the calculated in amount so 10% four increasing percentage year to maximum of points of the amount calculated in 1983 and thereafter. This 50%. limitation offsets the elimination of the municipal county service payments each granting municipality exemption of from tax cover the costs of sharing 50% non-school municipal services. Argument is made that limitation on the 50% amount payable aby municipality creates the likelihood of in adequate funds in the intcrmunicipal account awith resultant abatement of school service payments J. A. (N. ;17- S. 73), thereby prejudicing municipalities which incur addi tional school costs aas result district development.
This argument purely speculative at the present time. Moreover, a provision for abatement only of service pay- ments to the event of inadequаte funds the account is not on its face arbitrary, particularly in light of the stated the guarantee payment, the only other kind of payment provided except surplus dis- tribution. for a provision service to a payment municipality for
school district services was retained in recognition fact that residential development for in provided certain of the municipalities under the Master Plan with in- attendant crease school costs, as contrasted with industrial or com- *8 mercial development provided for in other municipalities, would have unequal on local impact budgets.
The amendment also revised the method of computing the guarantee payment to a municipality. The this is to a payment protect municipality loss of tax against ratables in the district. However, it was ascertained that under the original legislation could become municipality entitled guarantee even payment lost no though meadowland from property rolls, its tax but had merely re- valued such ratables. The amendment restricts the guar-
antee to a where situation there has been loss of payment tax ratables the district through public acquisition.
It is that the amended argued tax-sharing provisions are arbitrary рayments because account intermunicipal are unrelated to and not determined out of by expenditures However, the account. these not provisions are designed merely to offset tax burdens from the resulting de regional but also to all velopment, have constituent municipalities share in resultant tax benefits.
This is distribution of accomplished by what remains of benefits, the tax after for whatever tax compensating burdens have been sustained. Use an’ basis to distribute acreage this surplus maintains the con- equitable sharing-of-benefit is not on its cept arbitrary. face The formula’s selection of as the base year of a fixing two-year between the spread year comparison and the adjustment year is also as arbitrary. attacked Spe it is that a cifically, year, base to have a rational urged basis, should reflect the date of the adoption Plan, the Master and that two-year will result in a spread municipality immediate incurring school costs from District development which will not be calculated in school service payments years. two
Selection of the calendar year as the year base has a rational basis. year This was the in which the Commission adopted and into effect interim put on zoning regulations land use throughout District. Since the ad- meadowlands justment payment (which includes the school district ser- vice payment) is to be required certified to each municipality 1st of by February each year, there has to be some financial time lag computation. Use the adjustment year (the same used in year calculating apportionment rate as well as the increase aggregate true value of taxable real has not been District), shown to be arbitrary. tax-sharing provisions amended a mechanism present tax sharing benefits and within burdens the District which its face appears to be rational and fair to constit- *9 uent municipalities. with the formula will un- Experience doubtedly it in better put if, and establish where perspective and how are needed to its changes accomplish In purpose. any event, should constituent demonstrate municipality that the tax-sharing actually as to it work provisions applied an arbitrary result, it will have right judicial secure All relief. we now decide is that the amended provisions have not been shown to be on their face. arbitrary
Some additional In matters brief comment. require N. J. filed Division under proceedings Appellate A. S. 1:7-4 it was cоntended was not legislation by the Governor after signed days within ten presentation Const., I, as N. J. The required by V, Art. par. 14(b). § bill, amended, record was clearly contrary. is to the The 1969 and presented the Governor on January signed him held in three later. The trial court so days pro before it. correct. ceedings clearly Its is finding It is also that the argued of the establishment Sports and excludes from Exposition Complex District in of the tegral part meadowlands thereby impairing basic purpose Act rendering arbitrary classification predicated upon the This original purpose. contention was not raised before the trial court or in the Appellate Division. premise is invalid. The argument’s Sports and Ex established under N. J. A. position Complex S. 5:10-1 et is at with the seq. not odds the Meadowlands Act. Rather is a carefully planned development, fully within the of the Act and in objectives furtherance of the aim of overall reclamation development meadow- lands.
It is also contended that the Act for provides zoning areas in the recreational other park, public District but makes no provision compensating purposes, owners thereof. If also invalid. owned privately prop-
This argument zoned for use the Com- publiс in the District erty and the mission, will have to be condemned owners the land *10 avail- The General that compensated. Attorney represents funds, funds, and Acres’ able Federal State Green including will be used to so zoned. property acquire
Our decision that there has not been uncon and stitutional of the delegation legislative zoning power, Commission, exer may lawfully agency, State District, cise control over is not to be taken as zoning of the actual contained in' the approval provisions zoning 11, Plan November by Master the Commission on adopted 1972. Judicial review of the Plan’s details is avail zoning or of arbitrariness be as illegality able should charge serted.
Our finds dissenting tax-sharing the amended colleague to be in their to provisions patently arbitrary application and “unconstitutionally constituent therefore municipalities noted, -As heretofore our conclusion is special” legislation. that the to be rational and fair. We not provisions appear do say that formula present mathematically perfect that other and better not be may adopted alternatives is within the light experience. objective sought and the rea- legislative power provisions question apрear sonably objective. calculated to achieve that
The dissent also finds that the same provisions compel constituent municipalities to raise local taxation real situated therein property moneys for the and’ exclu- direct sive use of other constituent municipalities, to contrary Const., VIII, N. J. Art. I, par. 1(a). This issue was § discussed length by and, trial noted, at court we have we are in with agreement its conclusions that the tax- sharing provisions (the amendment formula changed only details and not the basic a cost concept) imposed of gov- ernment upon the constituent in manner municipalities which is “entirely consistent” with the above mentioned con- stitutional provision.
For the affirm foregoing reasons we judgment trial and court sustain legality the amended tax- sharing provisions. D., P. A. Assigned, J. Temporarily dissenting Conford, convinced, 9, I am Article the so-called “In- part. Hackensack
termunicipal Tax-Sharing” provision Act, Meadowlands Reclamation and as amended Development L. c. of 1947 in two 103, violates the Constitution it is and local respects: (a) special legislation “relating * * *” of mu- taxation the internal affairs “regulating * * IV, VII, Art. contrary par. 9(6) nicipalities § (13) respectively; (b) compels real therein to raise local taxation on situated for the direct and exclusive use of other moneys municipali- ties, VIII, I, Art. I find no con- contrary par. 1(a). § *11 act; in other of and I stitutional infirmity part remainder, 9 would sever Article from the the latter holding valid, I act as viable and entirely functionally as regard Article 9 and believe have without it would been operable 9 to survive without Article Legislature intended necessary. if Article under
I. 9 Specialness of IV, VII, Art. par. 9(6) (IS). § The constitutional provisions read: Legislature pass any private, special “9. The shall not or local laws : (6) Relating exemption taxation to or therefrom. (13) Regulating the internal affairs of formed for government counties, except
local as otherwise this Constitution pro vided.”1
A similar 9 provision to was contained in paragraph 1875 Amendment IV, Constitution of 1844. Art. VII, Sec. 11. It included par. the substance of subparagraph exception subparagraph (13) applicable 1 The is not here as it is petition private, special conceded there was no for a or local law as permitted by IV, VII, par. § Art. 10.
48 but The 1875 (13), not Amend subparagraph (6). n
ment to curb adopted pervasive was practice a whole Legislature previously enacting profusion of acts for or special specific purposes objects or re having localities, lation to individuals or whether particular one more, without to the of such regard appropriateness legis Parsons, Van v. 40 Riper lation for general application. J. L. 1, N. 8-9 Ct. is the (Sup. 1878). Special legislation objects result of classification of the improper legis sense, lation. Such in the constitutional arises impropriety, who, if law bear does not “affect all of group equally in mind the are purposes legislation, ing distinguished characteristics sufficiently important marked make v. Essex Harvey them class themselves.” County Freeholders, Board N. J. In 381, 30 389 (1959). Alfred 40, Vail Mut. Assoc. v. N. J. Bor. New Shrewsbury, the Court held an act clas (1971), fatally whose special sification of found for certain was purposes school-districts had have “no rational to the relationship statute”. where can be even
Legislation unconstitutionally special here, distinguished as municipalities, it affects groups them if its classification from a single municipality, Jersey City v. object. to its relationship has no rational cert. A. Zink, 1945), 448-449 & N. J. L. (E. *12 Ed. 485 493, 90 L. 797, (1946). 66 Ct. den. 326 U. S. S. 9 is not IV, VII, par. violation of Art. The effect of § also of Art. violation consequential that there is merely notice of the in 8, IV, VII, requires public which par. § or local special all private, therefor as to tention to apply any within specific etc. laws coming laws. Special, 9 ab IV, VII, are par. forth in Art. set subparagraphs § IV, VII, 8 is or not Art. void, par. whether solutely § Zink, v. supra. Jersey City with. complied Cf. Alfred Shrewsbury, supra. v. Bor. New Special, Mut. Assoc. Vail subparagraphs the specific within coming laws not etc.
49 IV, VII, valid, Art. 9 are notice is par. properly if public § given.2
Thus, 9 in- if, ease, as I conclude Article is stant act is a internal special or local law regulating both, affairs of taxation, or municipalities, relating void absolutely more. without I proceed, to an examination of whether the accordingly, effects of Article with rationally its comport purported purpose. is, As to what there is no purpose dispute. that Everyone involved in the case that the agrees equitable apportionment as between the fourteen municipali ties having territory Meadowlands District of the financial benefits and detriments from the flowing “develop ment of the meadowland a whole”. district as Section (See 59 of the act J. A. 1972, S. (N. as amended L. :17-60) c. 103). More specifically, State describes the benefits and detriments in terms of and this accords “tax-sharing”, — with the title of Article “Intermunicipal Tax-Sharing”. Thus the intent is that municipalities more taxes getting out of the statutory operation of the meadowland district they than would in its absence contribute therefrom to a common fund or “pool”, taxes municipalities losing therefrom be reimbursed out of the pool. I will be from a plain description
As believe of the opera- 9,3 Article tive so-called benefited mu- provisions who, act, under the therefor, are are nicipalities surcharged arbitrarily any without relation in surcharged necessary fact from resulting development to tax benefits the district they 2Provided, however, “mandatory” do not offend the clause at IV, VII, par. requires Legislature § the end of Art. 9 which pass general legislative judgment may laws for all cases which in the provided by general case, supra, laws. See the Vail Alfred 52-53). (53 N. J. at operative provisions hereafter of the 3The discussion 9 is Article entirely upon adopted 103, based the amendments in L. e. which pass on, never had the trial court occasion to and which this Court opinion. analyze majority detail fails to *13 n under who municipalities deprived the act. The so-called without arbitrarily, under act from the do so pool take suffer they supposedly losses any relation in fact to tax majority As the from the of the district. development concern over out, this Court opinion points “expressed act the original fairness of the tax-sharing provisions” 1972. February when had in this case was first argument L. result, aAs those were amended provisions however, c. amendments in me, 103. It is clear have, un net if compounded original effect anything, True, a view of the “unfairness” of legis fairnesses. court’s of un lation will with conclusion necessarily not equate the amended my constitutional But in specialness. judgment merely unfair; are not render the provisions they portion unconstitutional; are in they the act under consideration valid their light face since their arbitrariness is purported provisions patent against either of record common of which the facts or of knowledge court may should take notice. judicial Article may sum-
The tax-sharing provisions marized as follows: an “in annually set up required,to
The Commission is either account”. Constituent termunieipal they moneys account or fund or receive contribute into the both, it, upon application spe from depending All funds in the account are to be cified criteria. statutory retains nothing. the Commission year; out each paid Commission ever contributes to the State nor the Neither A is sub municipality’s payment obligation the fund. due from of all to it payments tracted from sum adjustment “meadowlands payment”. fund to determine its If N. J. A. 13:17—74. what is due to municipality S. it, the paid from excess it exceeds what is due as “miscellaneous into its revenues budget item goes due from a exceeds municipality If what anticipated”. must excess in its it, appropriate due to it budget what is item, local taxation and line raise it pay a special *14 to the account. N. J. A. S. intermunicipal 13:17-74(b) (c). and from a an
Payments to are due in “ad- municipality justment year”, with 1973. commencing Calculations involve between a “base payments comparisons year”, which 1970 and a always year”, which is the second “comparison calendar year preceding adjustment year.
—A Basis into obligation municipality pay fund.
Each ac must into the municipality pay intermunicipal its, count an amount of calculated money by multiplying rate” “apportionment year for the below) comparison (see by amount of dollars which the true by “aggregate value”4 assessments of taxable real in the locally property and in the district in that exceed municipality year the ag value in the base gregate true assessments of that property year, 1970. N. J. A. :17-67 S. 13 to the (subject qualifica tion stated in the next In the first hereof). adjust sentence 1973, ment year, this is set at of the product debit 10% such in each ad multiplication, increasing by ensuing 4% justment year for 10 when it will be that years, 50%, per forever N. J. A. 13 centage thereafter. S. :17-67 continuing (b). rate”,
The “apportionment purposes of the foregoing by is determined the total paragraph, dividing taxes property municipality local, levied the comparison year for school, veteran senior citizen all purposes (essentially county local taxes except purposes) by the aggregate “aggregate provides act that true value” of 4The real estate municipality by ap the district boundaries of within is to be fixed plication “average promulgated assessment ratio” the Di purposes. Taxation for rector of the Division of state school Such however, ratios, municipalities, any seg are fixed for whole not for Tp. Willingboro Burlington Cty. Tax., v. ment thereof. See Bd. consequent (1973). foregoing N. J. 211-212 effect of the tax-sharing provisions consideration on the arbitrariness will be discussed infra. value of all real municipality true as equal ized for school purposes by state Director of the Divi N. J. A. sion of Taxation. S. 13:17-61(g).
It is thus that constituent apрarent municipality each own each year; will have rate struck apportionment its that the of the annual theory surcharge further true value assessed realty of whose municipality equalized year in the District over of the base has bene- increases fited from Meadowland District assumed being accretion in which would its favor of that number of dollars *15 it taxes prop- be realized the rate at which by multiplying in- the stated erty for local (except county) purposes District. in the realty crease in assessed value of equalized mu- a Therefore, goes, against the assumption charge so will reach (which a “benefit” for of that nicipality portion related to the pur- in ten is years) rationally thereof 50% 9. of Article pose payments
B—Bases credits for from fund in municipality. of favor for The act three or credits provides types payments of the fund. out municipalities formula “Guarantee as to this (1) Payment”. is but in that if the provides (by essence complex equalized — Director’s supra) ratios see application aggregate of a in realty true values of assessed municipality Dis a below year goes trict in such assessed comparison equalized 1970, if that values for decrease is attributable real in the from intervening exemption property District reason by any of its acquisition governmental taxation for then such any public purpose, body municipality qualifies out in for a or credit the amount payment fund pro in such decrease assessed true by multiplying duced equalized rate” municipality’s “apportionment values by (see J. A. 13 :17-68. N. S. supra). is payment” “guarantee will noted this
It be at once of or condemnations activated by acquisitions Com- Meadowlands or not the agency (whether public related whether or not for mission) any public purpose development. meadowland It “Service (2) Payment” purposes. school district of enrolled provided is that for in the number any increase a munici resident within the pupils District boundaries num over the pality'' September comparison year ber on to receive September is municipality from the fund or credit to the payment product equal of resident the increase in the number multiplication of cost of in the pupils by comparison education per-pupil N. J. A. S. 13:17—70. year. fund,
If payments exhaust the balance guarantee school service are abated. payments If there
(3) “Apportionment Payment”. surplus all any adjustmеnt after due year guarantee fund service been payments made, ap school have surplus all the constituent portioned among ratio as the number of land within the District same acres of acres in municipality of each bears to the total number of N. J. A. entire District. S. 13:17-72(a). Article 9 is best appraised The fact case specialness *16 City Jersey on the point, in of decision the the light leading — Zink, com N. J. L. a case 437) strikingly v. supra (133 Zink constitu involved the to before us here. that parable of 34 of the Laws 4, 5, and tionality of chapters internal affairs the as special legislation regulating attacked of such legis the prohibition of in violation municipalities of of the Consti in 1875 amendment lation contained the was activated The constitutional issue tution cited above. on moneys that accrued interest after the court first held for the years II railroad taxes Class delinquent the to taxpayers had been 1932-1940, paid by which interest himby pending held being the was Comptroller State which the taxes thereof to the to municipalities distribution statute, due such belonged municipalities were as matter of law. The 1945 under attack in statutes the case to redistribute the millions of dollars tax-in- purported of in moneys substantially terest the manner. following involved The amounts due were re- municipalities retroactively from duced railroad tax statutory interest rate 13% of $4,000,000 remainder 3J4%; money ap- was of for distribution to all the of propriated municipalities as a State tax-saving proportion measure on basis schools; of resident such pupils municipalities of the public certain after other minor the remainder of the dispositions money was to be retained provided State. in Zink complaining municipalities5 contended in effect the 1945 laws of munici had created two classes —(cid:127) palities those wherein II Class railroad delinquent located, properties were which were surrender required — revenues under the and all statutes municipalities whole, State as a which were made the beneficiaries of the redistribution of $4,000,000 money, purportedly for tax relief It purposes. was that there was no contended rational basis to assess the II Class tax-recipient municipali ties on the fortuitous basis the amount of tax in railroad then terest due them aas means of defraying the cost of plan to afford tax all legislative general relief to the munici palities the State. The Court of Errors and Appeals that the agreed was legislation impermissibly arbitrary, special, therefore in its classification the municipalities, held that the legislation did concern the regulation of the internal affairs of within the municipalities, absolute prohibition special legislation under Art. category IV, VII, par. 11 the then Constitution. 133 N. J. L. at § 448-449. spell 5The briefs of the file in Zink out the con pointedly tention stated in the text much more its than reflection opinion Appeals. Court of Errors and *17 Zink continu- not challenged General has Attorney that under the 1947 Constitution requiring
ing authority of impos- for purposes legislation classifying municipalities tax-related) tax, or them financial ing upon (particularly irrationality burdens and be free from arbitrariness or benefits of legisla- in of of the effects such terms the relationship of Zink The import its or purposes objects. tion to purported in view the 1947 Constitution is even more under emphatic of abso- the categories of the addition that document to forth in the as set lutely prohibited special legislation there- amendment, exemption to taxation or “relating YII, IY, from”. Art par. 9(6). § Zink of principles
In the of the constitutional light I to a consideration above, other return authorities cited scheme of arbitrariness of question tax-shаring is prac- 9 of The proposition Article Meadowlands Act. self-demonstrative.6 tically with con- surcharging first
Dealing provision the basis of increase any stituent on 1970, value ratables in the District since true equalized at 9 does not require once to be noted that Article the Com- causally activity to bn any increase related indulged presumption, mission. The Legislature apparently in defending General Attorney provision, as does the in any realty in value increase true equalized fact that 1970 would be imputable District after a matter is, act, exclusively District under the zoning is the most trans- Commission.7 That presumption for the Real northeastern illusion conceivable. parent plaintiffs speeialness de all make all assertions 6Not substantially However, veloped all have here. these observations been plaintiffs, espoused form or more either brief some one argument. oral Zoning Regulations did 7The not even District the Commission operative regulations until become November 1972. Sub-division promulgated were November 1969. *18 56
New (indeed, in the as a of almost Jersey whole) State kind has every been in a trend of value for sharp upward past the as generation and, bid fair to continue on that path for the The hindsight indefinite future. 1973 confirms the said 1970 all are for indications prospect, the continued the upward realty valuation for foresee- spiral able future. There every is reason assume that increases in the true in generally realty value district the meadow- attributable, land 1970 after will at least in measure, substantial the inflationary trend adverted to. This is so it is notwithstanding readily conceivable that con- zoning might structive in some of the District changes parts play part in or rises in value in accelerating creating some locations.
It rational plain thus that there is no basis whatever for the statutory that in assumption increases true equalized value of district after 1970 in realty any particular munici- will pality per be attributable se to the fact Com- that the mission has exercised under act the the zoning powers vested in previously the In municipalities themselves. first all place not the zoning regulations by the adopted Com- mission have changes land-use permitted under effected But even as preexisting zoning. to areas where land-use have regulations been Commission, altered Article no requires showing any causal correlation between any zoning regulation any increases in values equalized which are mаde the for a basis surcharge against municipality. is automatic. A surcharge restrictive can zoning change well as as depress increase the true value of affected property it. One cannot of course assume that all zoning changes effected have increased will Commission increase rather than decrease value of realty affected thereby.
The arbitrary nature of the is further surcharge accen- tuated by circumstance increases in assessed value can realty result from of vacant land improvement as well from appreciation land, of parcels improved or unimproved. shows, The record for example, portions the northwestern of the District have some segment further time been industrialized and that industrial heavily of land area a fair for the improvement prospect if, case, future. Tiras even as in such a District zoning does area not alter as to prior zoning particular way, resulting owners improve value of the basis appreciation part assessed becomes municipality, operates as Article surcharging value of *19 the basis of mere rise in true ratables aggregate can so surcharge se. How the of a pеr portion generated ac- Meadowland Commission remotely related to thought kind, or any of otherwise? tivity zoning in Finally, respect of increases in measuring equalized value of ratables, assessed we 9 noted above that Article assumes that the Taxation Division Director’s for ratios of equalization aggregate municipality-wide realty valuations are automatically usable selected arbitrarily for segment — here municipality the meadowland district por tion of the This is an municipality. utterly unwarranted factual assumption, see v. Tp. Willingboro Burlington of Tax., Cty. Bd. supra, passim, it further the compounds of arbitrariness the surcharge provisions of Article 9 the in other herein. respects discussed even all
Passing the one foregoing, confronts the irra- tionally of the Article 9 a assumption that municipality District having realty ratables true increasing aggregate value over that of 1970 is necessarily enriched thereby to extent of the dollars produced by of its effec- multiplication tive local-purpose tax rate (“apportionment rate”) by amount of such ratable increase. It in- elementary that creased ratables do not of themselves increase the pecuniary yield of taxation. Thеy merely broaden the base for deter- mination of the rate at which the tax municipality will for its budget requirements, which are not a of function base, its ratable or Moreover, vice versa. as is commonly known, increased are ratables not necessarily beneficial to either a pecuniarily municipality or realty its preexisting 58 new re- whether ratables That
taxpayers. depends more the tax services than the share of quire municipal levy they absorb. But Article willy-nilly surcharges an automatic basis. for all ratable increases on municipality Before this it needs to be noted subject passing validity has any not at time been on behalf argued activity to any Article has relation surcharge power. of Meadowland other its zoning Commission than need ratables, example, increase in tax surcharged from not, act, any physical under be shown to result or other of the Commission. activity development rationality now to a issue consideration
Turning or out payments of Article for credits provisions find Eund continues to in favor of one municipalities, a picture of rife illusoriness. a credit
First, above, as indicated gets municipality ag which its from fund for intermunicipal every year than are less ratables in the gregate equalized District any governmental 1970 if attributable acquisitions nature, or whether body agency public or purposes ex For activity. not related to Meadowland Commission purchased if the federal condemned ample, government *20 a post or plant District of land for an atomic plot energy caused tax the exemption office and the of resulting in District a of valuations the reduction assessed aggregate would municipality 1970 area a those of that of town below out compensated have in thereafter to every year forever of the multiplica of fund in a to the equal product the sum the by apportionment tion reduction ratables of the said rate of the What municipality. relationship municipality’s in the Meadowland District bears to the being legislative annual subsidy it such an the purpose giving (at expense of all the in municipalities District) any other defies least none to the has been afforded point At response. basis for benefits-eredits out Attorney General. This fund in favor of under Article municipalities to patently arbitrary rationally any purported unrelated have been different Article 9. It might possibly if land only were for compensation granted acquisitiоns for meadowland development purposes. Commission of a
The in favor statutory second for credits basis service pay- the Eund is the school municipality against ment which operates automatically give municipality to in which annual dollar for each District subsidy year resident exceeds municipality school enrollment of a sum represented by enrollment as of and in thereof such cost education increase multiplying per-pupil in The year. theoretical municipality comparison any foT is that increase of school justification this subsidy children in resident meadowland areas is presumptively at- tributable to residential zoning by the Commission.
factual falsity of premise is obvious. areas of Many meadowland zoned residential by the Commission were zoned or, residential event, previously, any were sites of residential property as such after the continuing jurisdic- tion the Commission Eesidential in such began. growth areas after 1970 totally of Commission independent zoning may thus well produce increased numbers of District school children in particular municipalities to the same extent as though the Meadowlands had Act never been passed; yet under Article such increases automatically redound finan- cially to the annual benefit of the municipality question at the expense all other District via, the independently arbitrary formula surcharge examined above. There is no basis in reason favor recipient mu- nieipalitv any purported purpose in this manner in terms of of Article 9.
The third basis for benefits from the fund under Article 9 is probably the arbitrary most of any of the formulae of article either surcharges benefits to mu- upon nicipalities. This is the so-called “apportionment payment” which, proviso terms, reduce it simple provides that if there is left fund in anything adjustment year *21 after payments “guarantee” out “school service” constituent all the among is
claims the balance distributable acreage on basis of the proportionate municipalities In municipality. in the particular meadowland located total 5 times as much words, if Town A has contributed even other year, in given account Town B the intermunicipal to meadowland district B much Town has five times as but fund balance any B from A, Town will take as Town acreage A. as Town money much year 5 times as at the end of justification rational pretence There not been even has of relation to con- any in terms provision for this advanсed stand, 9.8 things of Article As ceivable legislative and that for surcharging effect of this provision combined rat- whose assessed municipalities that all the constituent is what- (for in value after land increase ables District annually Fund which money ever into reason) pay all the municipalities in disbursed whole or part then basis of the proportion they in) or not pay (whether municipality. District acreage I submit that conclusively considerations foregoing establish the arbitrariness all the tax-sharing provisions and therefore their in contravention of con- specialness, cited Even if provisions stitutional above. one or more only of them e. arbitra^, g., were that surcharge provision, alone would taint and necessarily stamp operation aas whole as invalid. I arbitrary and dis- plan respectfully sent from the observation the majority opinion, which does any detail, not examine the it is tax-sharing plan “on its face” “rational and fair to constituent municipali- I believe the detailed analysis ties”. demonstrates foregoing It just it to seems me the statute sub- opposite. the 14 constituent of mutual jects species under cloak of the euphemism tax-diversion tax-sharing. why provided any simply 8 One driven to wonder not was unеxpendable year given balance in fund end of at the should contributing municipalities proportions be refunded to the in the same as their contributions.
61 The State contributes to the nothing in com- municipalities pensation their purported disadvantages, although project as whole is hailed as one to the redounding benefit of the State at are large, they made go to through essentially random of process oil each feeding other’s reve- nues to no purpose realistically any related to discernible of object the statute.
I conceive no useful to be by served sugges- of tion that “should majority constituent municipality demonstrate that as tax-sharing provisions actually ap- to it work an plied arbitrary result, will have the to right secure judicial relief”. It inevitable invitation that will result in a plethora such litigation as grounds those described which can above relief judicial only warrant invalid, if the Court not'merely finds the unfair. provisions policy Sound calls for the determination of in- making validity now, as warranted amply from the face Article that may so such be averted at outset and litigation be it to Legislature freeing advised accordingly, adopt desire, valid such if substitutionary provisions may any. as it II. Provisiоns Invalidity Tax-Sharing under the Tax Clause Constitution. 1917 I contends, Town of Appellant agree, Secaucus VIII, I, prohibits Art. Constitution par. 1(a) § — e., i. forces particular what Article of this statute does money taxation local real prop- to raise municipalities and for the exclusive use other payment over to erty described 9 does this the manner municipalities. Article later has year above when any municipality which valuations of District ratables assessed aggregate equalized is compelled those of 1970 to raise exceeding general annual of its sum part budgeted appropriation taxation rate”, and such times the “apportionment to excess equal tanto to or to paid pro sum is then out such required satisfy credit of other constituent as described above. their credits statutory literally practice seems clear me this It cited provision the constitutional intentionally proscribed above, reads: which *23 by general “Property under and for taxation laws shall be assessed locally by property and the All real assessed taxed or uniform rules. taxing payment assessed and to districts shall be for allotment State per value, [except according of as otherwisе same standard the general property herein,] at and such real shall taxed the mitted property situated, taxing the district in which
tax rate 9 added) taxing (Emphasis district.” use such the of Constitution, 1844 tax clause of the amended The 12, IV, VII, Art. read: 1875, par. § by general laws, "Property under and be assessed taxes shall according rules, true value.” uniform to its 1947 demon- A of 1875 tax clauses comparison the and latter; first, elimination strates two major changes of a standard constitutionally of value” as requisite “true of second, treatment assessment, specific valuation for is to effect The second mandate real taxation. property either for the direct chooses Legislature provide if of for its assessment property local assessment real all districts, payment taxing the State for allotment accord- manner shall be assessed assessed either such realty value, of and at the local general to the same ing standard such real taxa- rate, property tax of proceeds where the taxing for the use district tion shall be is situate. property — 1947 tax clause had specific historical genesis which been adverted to recently one has Court. See by this portion foregoing 9The brackеted was added 1963 concerning lands; assessment of farm amendment the remainder of adopted section is as in 1947. Cahill, v. 62 N. Robinson J. 473 at 504-05 (1973). Briefly, Driscoll, Governor who the movement spearheaded for re Constitution, vision wanted the elimination trae value from tax Constitutional clause. V Convention Proceedings, 771-72. The Hudson pp. County municipali ties, wherein bulk valuable II Class railroad property situated, was the nullification of Tax the Railroad wanted Law of 1941 c. which (L. 291) for the taxa provided tion State such for local use property municipal at rate of 3%, the fixed whereas such previously had been taxed at general tax rate of the municipality situate; where which, rates as of 1941, 5%, over averaged and higher by 1947. See argument at the propounded Convention behalf of the municipalities counsel through for the State League V Municipalities, Constitu tional Convention cit. Proceedings, op. supra at 566 et seq. The 1941 law been had sustained as constitutional in Jersey City v. Board State Tax N. Appeals, 133 J. L. 202 (Sup. Ct. 1945), modified sub nom. v. Jersey City Kelly, 134 *24 N. J. L. 239 &(E. A. 1946).
The Hudson County municipalities were to take willing their chances that no later legislature would change existing allocation of II Class railroad taxes from their traditional disposition for the use of the municipalities wherein but situate felt the they need of constitutional assur that, ance even if allocated, the so taxes would not re aby duced legislative variation in either the standard of valuation or tax rate applicable thereto as contrasted with tax of treatment real property generally. Accepting these demands as the of price elimination of the true value language from tax clause and insuring success the constitutional as a proposals whole at the forthcoming referendum, representatives of Governor Driscoll met pri at vately the home of the president of the Convention with members of the taxation and finance committee of the con vention and delegates representing interests of the Hud August 25, on the County evening
son See agreed upon. tax was finally adopted language when the Connors, Jer Constitutional Revision New The Process of State League, (National Municipal 1940-1947 sey: (1970) ;10 1947 Studies, 4), No. I p. Convention Constitutional cit. op. at 773. Proceedings, supra Convention Constitutional was formally approved draft thus negotiated The language day, the next August convention open by delegates Proceedings, Convention Constitutiоnal 26, 1947. I 1947 cit. 785. supra at op. on the language centers dispute crux of the instant
The real taxation of “such clause, for the calling at the end * * * district". Appel- of such taxing for the use property of” etc.) the use (“for clause that this argues lant Secaucus with dealt real categories both of applies e., and such as locally taxed i. as is such in the paragraph, taxing allotment payment taxed the State for is brief of II railroad property).11 Class (e.g., districts on that in apparent agreement General Attorney That tribunal was not. court but the trial issue limited only language appertained of” the “for the use thought taxed the State for local of property the designation and not to payment designation prop- allotment N. 89, 119, J. locally”. Super. and taxed erty “assessed with 8. with the trial court Secaucus. agree n. I disagree structure and the sense underlying the syntactical Both for local to the intent that the direction provision point locally both to assessed proceeds applicable use of the tax suggested language been draft is said to have final 10The espoused *25 Municipalities, League which had counsel for the State County municipalities. Ibid. of the Hudson the cause realty Legislature such cannot divert 11The contention is the taxing proceeds for of different districts. tax the benefit covered the tax para- and state assessed otherwise realty as a whole.12 graph cannot be
Certainly regarded the “for the nse lahguage of” It seems obvious that at least any surplusage. sense was to from the standpoint in- whereby they might lock the door device against cam- be of the fruit of their constitutional directly deprived a later tax realty pro- diversion paign legislative burden of taxa- ceeds after had they compel labored on real to be locally property tion situated equal. is not to that the tax clause foregoing say proscribes made avail local real taxation proceeds being estate having scope beyond par
able for programs purposes so as the has long taxing municipality ticular municipality or pur beneficial interest such program substantial for for school county regional Taxation pose. government or former affords stock Another state examples. purposes on statewide for locally support tax levied school So, too, support as to local taxatiоn of education. fund which and firemen’s policemen pension
state-maintained benefit of local pensions policemen redounds to the Police, Fund Passaic v. Consolidated etc. Pension firemen. Cf. Commission, N. J. 137 Innumerable similar (1955). of valid local taxation for purposes could be cited examples local needs the localities share strictly provided transcending benefit of the expenditure. of” the “for the use Art. undoubtedly provision But if, be offended VIII, I, example, par. 1(a) would § ' accepted supported by meaning clause in the text 12The Delegate explanatory floor of the convention of Charles remarks on the pre Barton, conferees mentioned above who K. who was one of the finally adopted (Connors, liminarily language came accord “* * * 181) op. supra : cit. at there must a standard value kept uniformly kept uniformly a standard of rate in the assess moneys estate, and, then, ment and collection of taxes on real hy municipality in which real are to he returned or collected this * * I Proceed is located Constitutional Convention estate ings, op. supra (emphasis added). cit. at 777 *26 66 more, a law without for
Legislature calling, were to enact Newark to raise loсal taxation and to over to Jer by pay a sey sum to latter’s annual for City equal requirements street from incidence violation maintenance of (apart of thereby special also of the constitutional prohibition local 1947 only Constitution was legislation). adopted Zink, two v. years Jersey City after the decision in supra. out, As Secaucus that case rested appellant correctly points not on the of the classifica only rationale of the specialness of tions benefited and burdened by concern, statutes there of fundamental prin but also of ciple that “where there a “representative government” or essential element delegation taxing power, thereof, district, to a local the tax thereunder taxing raised can be sole only by used purpose [italics court] such enabling powers districts exercise government conferred on them within the territorial limits of the dis trict.” 133 N. J. L. at 445-446. This philosophy is thoroughly with consonant product the 1947 constitution-makers discussion, the area under and there is nothing about the 1947 adoption tax clause to indicate any intent for a from what departure the Court of Errors and Appeals fundamental law in organic 1945. deemed The surchargеs by levied Article of the instant act on the mu constituent will therefore nicipalities survive the mandate of VIII, Art. I, if the par. 1(a) only contributing municipalities can § be regarded having substantial beneficial interest for which purposes the surcharged funds are to be expended. Review of the analysis the operation of Article 9 as set in Part I of out this can opinion yield only negative answer to the criterion posed. all Passing considerations therein discussed toas the arbitrariness of the basis for the itself, surcharge certainly the governmental or needs pur- of Secaucus or North poses not, would Bergen for example, served the federal acquisition government land for office atomic post energy plant Moonachie or Rutherford. Yet Article would in effect Secaucus require and North to raise taxation on local Bergen real estate moneys to be over or paid credited Moonachie or Ruther- ford to assuage its loss of District ratables because of that kind of noted, As acquisition. already this applies acquisition by any public agency any public no *27 matter, how irrelevant to the operations of the Meadowland Commission. The same inter-municipal subsidizatiоn occurs if Moonachie’s or Rutherford’s resident school population within the meadowland district increases over what it was in Further, 1970. above, as noted as to part what Secaucus or North are Bergen for, surcharged possible is probable, 9, under Article that such will moneys be dis- tributed, without any rhyme reason, or to Moonachie and Rutherford all the other constituent municipalities on of their basis respective proportions meadowland acreage. fine,
In 9 Article each of compels munici- constituent palities to raise local taxation for money purposes uses which afford them no whatever, benefit and it therefore violates the tax plainly clause of the Constitution.
Ill I have, to face 9 finally, whether, if Article question void, the whole Meadowlands Act fall. a must Such result a would be most unfortunate one if and should be avoided reasonably possible. The Meadowlands Act culmina- is the tion of over generation study and to- planning looking ward the in comprehensive the broad development public interest of a whole area in the heart geographical which lain metropolitan region has heretofore fallow. largely that, I must Concededly, respect the declaration legislative of Artice 9 a “vital tax-sharing provisions are component for any comprehensive plan development * * meadowland N. A. district J. S. 13:17-60(a). On hand, the other the act contains standard severability clause, 85, N. J. A. 13 which S. also entitled con- :17—
68 task is to determine whether weight. judicial structional The whole act fall would have intended the Legislature invalid. I were have if it knew the “tax-sharing” provisions in the difficulty negative question. no concluding exclusively operative of the act lies benefit public planning physical provisions developmentoof mechanisms for The statutory meadowland area a whole. tax-sharing nowise dependent upon are in purposes those an iota of That scheme can be excised without scheme. N. J. act. See Chapt. upon operative plan effect Planners, 48 J. 581, N. N. Am. I. P. v. J. Bd. State of Prof. cert. 389 U. dismissed and den. S. 593-594 (1967), appeal There would 19 L. Ed. 2d 70, (1967). 88 S. Ct. later providing by supple- difficulty Legislature little objective manner for desirable ment in constitutional ag., legislative appropriation Article inhering (e. agencies). from acquisitions public losses resulting tax Article is void but that the re- I thus conclude that *28 and valid. mainder of the is severable act and Judge Justice join in this partly Mountain Lewis dissenting opinion.'
For Justice Justices Jac- Weinteaub, affirmance —Chief and Judge Sullivan —4. Hall, obs Dissenting part Judges Mountain, Con- —Justice and Lewis — 3. eoed