By Samantha Marcus | NJ Advance Media for NJ.com

TRENTON - Three New Jersey municipalities in Union, Hudson and Middlesex counties are under investigation by the state for stalling property reassessments for decades and could be forced to conduct revaluations.

The investigation of Jersey City, Elizabeth and Dunellen is a shot across the bow to municipalities in the three counties the state says have neglected their legal duty to ensure fair property assessments, key in determining the real estate taxes home and business owners owe.  Tax boards in these three counties have "consistently failed to require towns to uniformly and fairly assess properties," Treasury Department officials said Wednesday.

Over time, properties' assessed values grow increasingly out of line with their market values, and some owners wind up paying too much, while others pay too little. Jersey City hasn't reassessed in 27 years, Elizabeth in 39 years and Dunellen in 33 years, according to the state.  "The Division of Taxation is reluctantly taking this action because the Hudson, Middlesex and Union county tax boards have failed to do what they are supposed to do," Treasury spokesman Joe Perone said. "The state has been more than patient in trying to convince the county tax boards to meet obligations, but they have been lax in enforcement because revaluations are unpopular."

In a news release, the state also calls out Westfield, South River, East Newark, Harrison, Roselle and Winfield. They are among 32 municipalities that have not reassessed in at least 25 years, Perone said.  This would be the first time in four decades that the division is invoking its authority to force a municipality to reassess its property "because it's clear that the county tax boards and the three municipalities have no interest in complying with the law," he said.

Property revaluations can be costly and unpopular, and some owners can wind up with higher tax bills based on their new valuation.

Jersey City Mayor Steve Fulop in 2013 cancelled a citywide property revaluation, saying he feared a citywide crash in property values. A downtown property owner could see his taxes increase $12,000 despite a big drop in property value, he warned at the time.  State Sen. Mike Doherty (R-Warren), who has criticized Jersey City for evading revaluation despite increased prosperity since its last reassessment, praised the administration's announcement and potential enforcement.  "Over the nearly three decades since Jersey City's last revaluation in 1988, the New Jersey Gold Coast city has seen a substantial redevelopment and increased demand," he said in a statement. "Despite a booming real estate market that has enriched homeowners, many Jersey City residents continue to pay taxes as if they couldn't give their homes away. Even worse, the rest of New Jersey has been forced to pick up the tab while city officials have resisted efforts to be held accountable for their own spending."

In nearby Weekawken, also Hudson County, four residents recently won a suit to force the township to conduct a revaluation after arguing the township's failure to update assessments on older properties while assessing new ones at market value created unduly burdened them. It hasn't reassessed in 23 years.

According to the state Department of Treasury, the true value of Jersey City properties is $15.6 billion higher than its assessed value. In Dunellen, the market value of property exceeds the assessed value by a factor of four.

Dennis Shilling, acting director of the Division of Taxation, said a "director's ratio" - the ratio of assessed value to market value - lower than 85 percent suggests a municipality is out of compliance with a law that requires properties to be assessed uniformly statewide.

Jersey City's ratio is 27.63 percent and Dunellen's 24.51 percent. At 13.4 percent, Elizabeth's ratio is among the lowest in the state, meaning a home in Elizabeth is assessed at just 13 percent of its market value, according to the Treasury Department.  Elizabeth spokeswoman Kelly Vance, the Dunellen Mayor Robert Seader and an aide for Fulop did not immediately respond to requests for comment.  "Based on this and other available data, the division will conduct an investigate and convene public hearings for taxpayers so it can determine whether to order the three municipalities to conduct a revaluation," Shilling said.  State Sen. Raymond Lesniak (D-Union), an Elizabeth resident, said it's important for every property to be assessed fairly.

"The state has that authority, and if they determine that a revaluation is necessary, they'll exercise that authority," he said.