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COPYRIGHT 2003, GET NJ
sketch shows graphically the railroad holdings in Jersey City.
EW of our people understand the handicap upon
the growth of Jersey City
involved in the railroad
situation in our town. No
other city in the world has
the railroad conditions
that prevail in Jersey City.
All of the terminals of the main
trunk line railroads, except the New
York Central, are upon the shore
front of our city. These railroads
occupy one-third of the physical
area of the city, and the land so occupied is the
most valuable land in
the city limits. The
land upon and adjacent
to the waterfront of the
greatest harbor in the
world has a value almost beyond calculation.
The accompanying sketch shows graphically the railroad holdings in Jersey City.
All of this great and
extremely valuable area
of property is entirely
withdrawn from the
control of the city government in the matter
of taxation. Under the
Railroad Law the so-called "main stem" of
each railroad, a strip
one hundred feet in
width, running from
the Hudson River to
the western limits of
the city, is not only assessed by State official, but the entire
taxes levied upon it go into the State
treasury and are expended for State
Under the same law the taxes upon the remainder of the railroad property in actual use for terminal railroad purposes, called "second class railroad property," are paid to the city, but the assessment which determines the amount of the taxes is not made up by the city officials, but is made by a State Tax Board composed of a large majority of members living outside of Jersey City. This board has always under-assessed this extremely valuable property, as is proved from time to time by sales of property to the railroad companies.
A Striking Example.
A recent sale will illustrate this point: The railroad bought a piece of property upon Greene Street, paying therefor at the rate of $175,000 per acre. The State Taxing Board assessed the property thus purchased at only $80,000 per acre.
But this is not all of the story. The terminal property of the railroads, unlike most of the other valuable property in Jersey City, has comparatively little improvements upon it. It consists mainly of yards upon which are comparatively inexpensive railroad tracks with an occasional building of comparatively small size and cost. The improved land of Jersey City usually carries improvements of many times the value of the land. The improvements upon the railroad property do not exceed 15 per cent of the value of land.
This railroad situation, therefore, in effect segregates one-third in area, more than one-third value of the city's property, removes this property from the control of the city authorities, and the taxes actually realized from it are very much less than the proportion of taxes which other municipalities obtain from their most valuable land and improvements.
In view of these facts the achievements of the Finance Department under the late Commissioner Brensinger and his successor, the present Commissioner, James F. Gannon, as elsewhere recounted, are truly remarkable.
From the time of his election the late Commissioner Brensinger immediately commenced a determined fight to increase the assessment of the second class property of the railroads, and this fight has been carried on energetically by his successor, James F. Gannon.
The second class railroad property was assessed when Commission Government was inaugurated in Jersey City at approximately $49,600,000. In 1921 the assessments were $68,600,000, an increase of $19,000,000. The third class railroad property assessment was in 1913, when Commission Government commenced, $12,000,000. Last year the figures for third class property were substantially $49,000,000, an increase of $37,000,000. This year Commissioner Gannon has again raised the assessments' on this property.
The criticism may be offered that there is no certainty that this increase can be maintained. It will certainly be appealed by the railroad company to the State Board. The complete answer to this position is that the success of the city government in securing increases of taxes upon third class railroad property of more than $37,000,000 is the result of several separate cases, each one of which has been taken upon appeal by the railroad companies, the result of which appeal has been in each instance a compromise, the city sustaining the larger part of its assessment in each instance.
It is the conviction of all city officials who have had to do with railroad taxation that the railroad property is grossly undervalued.
The only way to meet this situation is as Commissioner Gannon has done it, by persistent and repeated increases in the assessments and continuous litigation to maintain the same. Each separate fight, although resulting in a compromise, means a very large gain to the city. This is the policy which has been so successfully pursued by the administration during the last eight years, and if the present Commissioners are re-elected will be the policy of the future. If they are defeated the incoming administration will reason with apparent justice that the public do not approve of these attempts to make these corporations pay taxes.
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