| Author | Message | ||
     Allan J Rosen Citizen Username: Allanrosen Post Number: 4 Registered: 4-2003 |
I will make myself available for any such meeting when it is called. The trouble with the Beifus property has been the delay in getting a proposed developer's agreement in whatever form. Prescreening without trustee input can also be a problem, and it is difficult to give input without knowing the specifics that the developer wants to propose. It bothers me also to have discussions of Pilots before there has even been a request for one. We have been told by legal counsel that with long-term Pilots (30 years) the value of the project is NOT included for purposes of calculating school or county taxes (which is why they are financially advantageous to the municipality residents). There are of course other considerations. I hope everything takes place sooner rather than later. | ||
| doublea Citizen Username: Doublea Post Number: 180 Registered: 3-2003 |
Allan Rosen: I fear that my response is going to generate a whole new set of comments back and forth. However, it is precisely this mind-set that has given rise to all the discussion that has taken place regarding Pilots. Yes, the value of the Pilot property is not included for purposes of calculating school or county taxes. But just because this is correct does not mean it is good for the taxpayers of South Orange. If you do a pilotvs. non-pilot comparison, it might turn out that the South Orange taxpayers are financially better off if the property is not piloted and included in the tax base. This is because, depending upon the actual numbers, the additional value added by the pilot property is more than offset by the school and county taxes picked up by the property. It has to do with the ratio of South Orange property before and after the addition of the subject property and the ratio of the value of the subject property to the total value of South Orange property. This is what the people who have been posting on this subject want to look at. To summarize, you just can't say that because the value of the property is not included for school or county purposes, S.O. taxpayers are better off financially. We are not comparing piloting a property vs. not having anything at all. One of our concerns was that even if the property were going to be developed, the trustees are working on the assumption it is still advantageous to pilot it. This is not necessarily correct. It all depends upon the numbers. | ||
| doublea Citizen Username: Doublea Post Number: 181 Registered: 3-2003 |
Allan Rosen: With regard to the timing of the Beifus agreement, I think once the first draft is given to the South Orange representatives for review , there is no need to rush it on our end just for sake of rushing it.I'm not talking about a long delay, but another month or so if that's what's needed to allow input. Beifus allowed his property to sit looking like it did for 6-7 years. I don't think this showed any consideration or respect for the town or people of South Orange. As you pointed out, he has had many months to get a developer's agreement to South Orange. I would hope the agreement gets the time it deserves to be reviewed so that the best interests of South Orange are served. Thank you. | ||
| snshirsch Citizen Username: Snshirsch Post Number: 53 Registered: 1-2003 |
I am looking forward to the discussion to be held regarding the PILOTs, where hopefully it can be put into a better light. I am also interested in looking at the other side of this equation. What is happening to the funds that SO is receiving from the existing Gaslight Commons PILOT and any future proposed PILOTed properties? What is the Village doing to reduce expenses and are the PILOT funds going to new expenses, or to cover the existing expenses without raising our taxes more. It would seem that we can't keep offering PILOTs in order to keep paying the same and increasing expenses of the Village. That's kind of like borrowing from Peter to pay Paul, no? | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 189 Registered: 3-2003 |
Hirsch asks questions I've wondered about too. | ||
| mrosner Citizen Username: Mrosner Post Number: 440 Registered: 4-2002 |
SNShirsch: Any revenue received from a taxpayer whether from a PILOT or an individual is treated the same. The village reviews all expenses every year during the budget process. There is also a citizens budget advisory committee (CBAC) that reviews the budget and makes suggestions. Anyone who wants to join that committee can email myself or John Gross and request to be on it. The village has only given one PILOT and as a result we are getting over $500,000 in revenue vs. the $80,000 we were getting or the approx. $250,000 we would have received so I don't really understand the statement about how we can't "keep offering PILOT's in order to keep paying the same and increasing expenses of the village." How is that like borrowing from Peter to pay Paul? It is more like we increased revenues to help stabalize the municipal tax rate. The school budget did not change and the county budget did not change because of Gaslight Commons so there was no increase in anyone's taxes because of the PILOT but it helped prevent a larger increase in the municipal tax rate. New expenses? Again, you will have to be more specific because I am not sure what new expense you are asking about. | ||
| doublea Citizen Username: Doublea Post Number: 183 Registered: 3-2003 |
Mark: You were on vacation at the time and may not have had a chance to read all the posts that took place during that time (I can't blame you if you didn't, there were a lot of them). However, if you're going to use the comparison of S.O. being better off since it is getting $500,000 instead of $250,000, I suggest you look at my calculations in my May 21, 2003 3:18p.m. post which show, using the numbers you have just used,that the other taxpayers of South Orange are hurt by the amount of $702,000 because the Gaslight Commons was piloted. Using your numbers, the taxpayers of S.O. would have been better off had the project not been piloted and included in the base for school and county taxes. If you have not looked at my calculations, I urge you to do so so that you understand that it is not an absolute that a pilot is always good for the other taxpayers of S.O. just because it is not included in the base for school tax purposes. I would also urge Trustees Joyce and Rosen to look at the example I am referring to so that you may better understand the methodology. | ||
| mrosner Citizen Username: Mrosner Post Number: 441 Registered: 4-2002 |
doublea: You are right about me not seeing your calculations, but they don't even sound close so I will have to check them out. However, the point I made was that the village is better off with $500,000 instead of whatever we were getting from Brunner. Clearly we get much more revenue and that development would not be there if not for the PILOT. That was the main reason for that PILOT. | ||
| snshirsch Citizen Username: Snshirsch Post Number: 54 Registered: 1-2003 |
My statement was meant to be vague and is not meant to condemn the Commons PILOT but to suggest care with where we step in the future. I understand that the Village is getting more funds from the PILOT than if the Commons were on the tax roles. But where these funds are being used must also be looked at in order to see the full picture. Without reducing, or at least trying to reduce the Village's expenses it seems too easy a way out of fiscal responsibility. Eventually we will have to fund more in taxes as our schools are really going to pot. If not used wisely and if the budget is not kept in check, the PILOT revenues will do nothing except keep our tax rate in check for a very finite time. | ||
| mrosner Citizen Username: Mrosner Post Number: 442 Registered: 4-2002 |
snhirsch: Ok, I understand that point. The only way to recognize a real savings in our budget is to cut payroll. My feeling is that whenever an employee leaves the village (not Police or Fire) we will have to take a hard look at whether we need to replace that person. The reality is we do look at every item and try to cut whenever possible. I know it seems hard to believe, but all the trustees pay property taxes and we would all rather pay less. Although I am repeating myself again, the real solution to our budget problems is with property tax reform. For those of you who have followed the problems of small market teams in baseball as the Yankees fight to prevent revenue sharing and you can relate to the fact that we are like the K. C. Royals being in the same division as the NY Yankees. (S. Orange vs. Milburn or Roseland, etc.). It makes it hard to understand how I still root for the Yankees. | ||
| doublea Citizen Username: Doublea Post Number: 184 Registered: 3-2003 |
Mark Rosner and I have exchanged several private messages today on the subject of Pilots. I don't think Mark would mind if I post here some of the results. Using numbers that Mark furnished me, viz. that had the Gaslight not been piloted the assessed value would have been $20 million,and using numbers that Ed Matthews previousl furnished, viz. the total equalized tax value of all S.O. is $1.450billion and the amount of the school budget financed by taxes is $68million, the net effect to S.O.taxpayers is effectively a wash on a pilot vs. non-pilot basis. However, as I pointed out to Mark, one of the main points of contention is that the schools are being deprived of an additional source of funding when properties are piloted. This has been the point raised by many posters, going back to Brian O'Leary's comments very early on. I also told Mark that one of the reasons I did the calculations was that it sounded as if we were being told that it was a financial benefit if a property were piloted -this is not the case, unless you compare pilot vs.nothing. I also mentioned to Mark that what I think SNHirsch and Jcrohn are getting at is since there is this additional revenue going to the Village, is the Village basing its expenditures on this additional amount so that it looks good in comparison to the schools. | ||
| nwyave Citizen Username: Mesh Post Number: 71 Registered: 1-2003 |
Mark, Your point regarding making decisions when employees leave the village is an important one and ties into the Village having to prioritize its wants vs. its resources. I am new to the CBAC (first meeting last night), but one one troubling macro item on the budget (and I readily admit, that I am very far from proficient to the finer details of the budget) is "Debt Service." The following are the trends since 1999: Debt Service (principal & interest) 1999 - 1,587,230 2000 - 1,503,441 2001 - 1,563,219 2002 - 1,891,378 2003 - 2,140,669 I understand that 2003 is still not a final budget so the #s could change. But if they do stay in the range indicated, it is disturbing - especially in light of the very favorable interest rate environment. Does the increase in debt service, both in % terms and in absolute $s indicated that we are living beneath our means? Are there any projections of these #s going forward? | ||
| alison Citizen Username: Alison Post Number: 25 Registered: 6-2002 |
Mark: I'm afraid I'm still confused about giving PILOTing status to downtown redevelopment. Doesn't approximately 1/2 of each South Orange resident's property tax bill go towards meeting the school budget? If I understand correctly, PILOTing puts money into town coffers but will not add the project to tax rolls. Therefore, the project may offset municipal taxes in a sense but will not help to offset the largest portion of local property taxes namely those for the schools because the PILOTing keeps the project off the tax roles period. If this is true then South Orange residents ARE subsidizing the PILOTing along with Maplewood residents -- only to a slightly lesser extent. We are in a combined school district. South Orange and Maplewood are both trying to look for redevelopment as a way to energize commercial districts as well as provide a larger tax base to give us some tax relief. The only difference is that South Orange has given PILOT status to one massive piece of development and is talking about the possibility of giving it to the two other huge pieces of downtown redevelopment that are in the planning. I assume the arts center is non-profit and will, therefore, also not pay add to the property tax role. It strikes me that S.O. is being tremendously short-sided, and taking the money and running rather than helping to build for a better collective future for South Orange and Maplewood. Even if we believe that none of the apartments being built will have children attending our schools, giving PILOT status to redevelopment projects is still doing nothing to help alleviate crippling school tax bills for both towns. If South Orange screws Maplewood in the end doesn't South Orange also get screwed? If Maplewood is successful at redevelopment projects, don't you pray they don't give them PILOT status as South Orange has? I thought both towns were in this together!?! | ||
| doublea Citizen Username: Doublea Post Number: 185 Registered: 3-2003 |
I had been thinking about writing the following before I opened my computer this morning and saw Alison's message which says exactly what I intended to say. It is my understanding that the large majority of municipalities which have Pilots are Abbott districts. In some Abbott districts as much as 90% of school funding comes from the state, unlike SOMA which gets only 7%. Thus, it might make a lot of sense for an Abbott district to Pilot a project since the municipality gets a lot of revenue and the schools are hardly hurt. To the trustees, please think about it. Thank you. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 194 Registered: 3-2003 |
Something I've wondered is whether it is legally possible to structure a PILOT agreement such that South Orange could specify that a portion or all of the revenues generated by the PILOT in excess of the amount the municipality would have received as taxes in any given year could be "donated" to the school district. If the argument is correct that PILOTs help keep our taxes down by providing extra income to the town that otherwise would have had to be raised by more rapidly increasing taxes, then this argument should apply equally to funding the schools. Moreover, if South Orange is concerned about how the district spends our money (and we should be, as should Maplewoodians), we could donate it with strings attached. | ||
| vermontgolfer Citizen Username: Vermontgolfer Post Number: 44 Registered: 12-2002 |
While I'm clearly no expert on PILOT's, these latest posts speak volumes why we need to have this meeting so everyone can hopefully get a better understanding of PILOT's and their pros and cons. Of course with our luck it will be scheduled when everyone on this board is on vacation.  | ||
| Edwin R. Matthews Citizen Username: Edwinrmatthews Post Number: 37 Registered: 3-2003 |
I find the discussions about tax abatements and payment in lieu of tax (PILOT) agreements frustrating because people overlook the most important facts. The first is the fact that a tax abatement (and the subsequent PILOT agreement) was only given to LCOR because it was necessary for the project to be constructed and it resulted in additional revenue to South Orange. If people understand this then most of the other discussion which occurs is irrelevent. One of the major reasons for having the central business district declared as an area in need of redevelopment was to permit the Village to grant tax abatements so that redevelopment of the central business district would occur. The redevelopment occurs and South Orange gets more revenue than it did before. ($500,000 as opposed to $80,000 for the LCOR site.) At the time there was no other proposal that would have generated $500,000.00 revenue from that site much less any greater number. To suggest that LCOR could have been built without a tax abatement thus generating revenues in excess of the $500,000.00 is simply wrong. For LCOR to be built required both the density it was built at and a tax abatement. It was never an option to have LCOR built as it is as a full tax payer. If a project can't be built without a tax abatement the Trustees must decide if they want the project. If so, they will grant the tax abatement. If they do not grant the abatement the Village may lose the project. A tax abatement can also be used to induce a developer to build in South Orange rather than in another community. For example if a developer was weighing a project in South Orange and a project in Morristown, if everything elseis equal the developer might go to Morristown because its tax rate is lower. South Orange might give a tax abatement to induce the developer to come to South Orange. In both of these cases South Orange gets the project built. The revenues it receives are greater than before. It is thus better off. It is like a loaf of bread. We might prefer to get the whole loaf but realizing we can't have the whole loaf we accept half of the loaf rather than have no bread at all. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 195 Registered: 3-2003 |
With all due respect, Mr. Matthews, the rest of the discussion is hardly irrelevant. I have been largely persuaded by your arguments concerning the advantages of PILOTs. But what a number of people here are trying, with little success, to get across to you is that diverting income to one part of our tax bill (the municipal part) has its own special disadvantages. In our case, the disadvantage is that we avoid contributing to the maintenance and improvement of our school district, and at a time when the district is really hurting for funding. No, it is not a given that rising costs of local education will be offset by increased funding to the town. That is why Hirsch (and I, and Doublea) want to know where the extra revenue from LCOR is being spent. Because if it is being spent, for instance, on paying salaries for services or personnel which might otherwise have been considered expendable, then one must ask whether those services and positions are more important to our communities than any of the 8 teaching positions the district will be losing this year, not to mention programs that will be cut this year or next. I'm sure you're right that we're better off accepting half a loaf than none. But don't you agree that starving one part of our tax pool (the schools) while feeding the other (the Village) is a suboptimal distribution of that half-loaf? | ||
| Edwin R. Matthews Citizen Username: Edwinrmatthews Post Number: 38 Registered: 3-2003 |
J Chron: Simply put you are wrong. A tax abatement doesn't divert money from one part of the tax bill to another. The school board's revenues received are not affected by a tax abatement. What you refer to as "extra revenue" is being used as revenue in the municipal budget to offset or ameliorate a tax increase. Using the LCOR payment there is approximately $420,00 in "extra revenue" which means that the Village has to raise that much less in taxes each year. That comes out to four cents per hundred of assessed valuation. A home assessed at $250,000.00 would pay $100.00 per year less in taxes. It is not a matter of starving one part of the budget while feeding another part. The school board receives the same amount of money whether nothing was built on the LCOR site, whether LCor was built with a tax abatement or whether it was built without an abatement. While the Trustees would have to tell you whether there were expendable things put in the budget because of the "extra revenue" from the LCOR payment I would be extremely surprised if they did that. What I have heard at the meetings I have attended was that they have been urging the administrator to find things to cut so they could lower the tax increase. | ||
| doublea Citizen Username: Doublea Post Number: 186 Registered: 3-2003 |
What do Trustees Rosner, Rosen and Joyce have to say. Beifus: Pilot or not; Shop-rite: Pilot or not. I believe Trustee Rosner has already said he wouldn't see any need for Beifus to Pilot. |
