Newark's Painful Challenge: Property Taxes Out of Kilter
Newark, NJ, officials find themselves in bind over efforts to restore fairness to property tax system, which had last full revaluation in 1961 and is so rife with inequity that almost every owner in city is either paying too much or too little; say any change will mean staggering tax increases in city's most stable neighborhoods even as downtown business district is showing its first signs of recovery; Mayor Sharpe James warns reassessment would have devastating effect on residential property owners and severely hinder current economic recovery; state is asking courts to force compliance with law that property taxes be based on 100 percent of property's true value; says Newark's assessments, on average, reflect only 16.38 percent of true value; city officials ask dismissal of case; cite reports by real estate experts that re-evaluation would shift 25 percent of tax burden from commercial to residential owners and, in worst cases, cause tax bills to double or triple for many middle-class homeowners that city so desperatly needs to keep; map; photos (M)