| Author | Message | ||
     doublea Citizen Username: Doublea Post Number: 187 Registered: 3-2003 |
Was the $80,000 previously paid by Brunner which is often used as a starting off point the total tax bill, with some portion going to school and county, or is it just the portion that was going for municipal purposes? How much does the Beifus site and Shoprite/Vose Ave. site now pay in total taxes? | ||
| Washashore Citizen Username: Washashore Post Number: 27 Registered: 4-2003 |
It's been a whole month since the PILOT thread began here on May 12th. With all of the June 13th and June 14th posts, we are right back where we were on May 12th: Those who seem to understand the use of PILOTs and their relation to school funding (doublea, snshirsch, brian o'leary, alison, J.Crohn etc)and those who don't (Ed Matthews, MRosner, etc). WHEN ARE MESSRS MATTHEWS, ROSNER, GROSS GOING TO SCHEDULE THE PUBLIC PILOT NFORMATIONAL?? Beifus will be before us in a few short weeks (when most of us will be out of town on vacation?). We need to schedule the Informational NOW. | ||
| doublea Citizen Username: Doublea Post Number: 188 Registered: 3-2003 |
I realize the Shoprite site is now owned by the Village. How much in taxes did it pay before? | ||
| Edwin R. Matthews Citizen Username: Edwinrmatthews Post Number: 39 Registered: 3-2003 |
Washashore it is clear you understand very litte but that has never stopped you from spreading incorrect information. If others agree with you that I don't understand the issuse and they do is there really a need for an informational session? Another thing is true: anyone who thinks there is a relation between school funding and a tax abatement with a payment in lieu of taxes doesn't understand the issues. The approximately $82,000.00 paid on the Brunner property was the entire tax bill. The money was apportioned to municipal, school and the county. I don't know what the Beifus taxes are. Some of the Shop Rite property is still on the tax rolls some is not. Perhaps someone can check with the tax assessor and or tax collector to see what the current taxes are or would be. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 196 Registered: 3-2003 |
"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." I don't understand. Would not the Gaslight Commons have paid taxes to the schools had it not received a PILOT? (Please, let's stay with the PILOT vs. taxes paradigm for a moment, instead of the PILOT vs. no development paradigm.) Did the schools not lose some $43,000 when Brunner ceased paying taxes on the property? | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 197 Registered: 3-2003 |
"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." My understanding is that if the Gaslight had been built without an abatement (I realize you and Mark believe this was an impossibility, and I even accept that argument provisionally), then that property would have become part of the funding source for the schools. The percentage of SO taxes that went to the school district budget would be the same as it was before, but SO homeowners would pay a bit less in taxes than they had been paying before the Gaslight was built, because SO's contribution to the schools would be spread out among taxpayers which now would include the Gaslight. With a PILOT, the township gets substantially more money and the schools get the same contribution from us they would have gotten before the PILOT—less the taxes paid to the school by Brunner Cadillac. But are you saying taxpayers save altogether more than they would have without a PILOT because the PILOT offsets the schools-cost to SO taxpayers (by decreasing homeowners’ municipal tax increase) more than LCOR’s tax payment to the schools would have? My problem is that the pressure on the schools to economize is substantially greater than the pressure on the town: the town's expenses are rising, but because of the PILOT, the town will be relieved of some of the pressure to be frugal. It will be freed of some of the pressure to make painful cuts to stay within a budget that does not overtax the citizens. The schools' expenses are rising, and there is little they can do but appeal to the Board of School Estimate to approve one separate proposal after another. Each year the school budget grows, and what happens? The BSE approves the increase. In saying there is no relationship between PILOTs and the school budget, are you really suggesting that if Village taxes had gone up by more than they are projected to increase, those separate proposals would still have been approved with the alacrity they were approved this year? What about next year? It seems to me that PILOTs not only offset school budget costs by holding down municipal tax increases, the offsets make tax increases to cover the rising school budget more politically palatable and therefore more likely. Therefore it cannot be strictly true to say that the schools would be getting the same sum with or without a PILOT. Obviously, one way to reduce or keep Village tax increases steady is to welcome PILOTs. But PILOTs fund only the town, and this ensures 1) that the town has money to spend, and 2) that taxes to cover the school budget are more likely to rise. As a result, the increase in our overall tax bill may not be steadying as much as it could. Another possibility is to welcome PILOTs, but divert a portion of them to the schools in the form of grants given under certain conditions of accountability, or program efficacy, or whatever the Village likes. This would put pressure on the schools to justify the expenditure of the grant money, and it could put more pressure on the Village to economize because the Village would be getting a smaller share of the PILOT windfall. It might on the other hand result in a comparative increase the municipal portion of our taxes, but I think it must be asked whether that would be a greater or lesser certainty than a rise in the schools portion of our taxes. I say this because, in my perhaps very uninformed opinion, these issues are not static and they are not only budgetary. They are also political and pragmatic. Thus, even if the choice is, just as you say, between a PILOT and no development, funneling new income from develpment into the town alone undeniably increases the odds that the schools portion of our total tax bill will rise. And for all we know, it is the Village, not the school district, that is better equipped to control cost increases on the expenditure side. | ||
| Washashore Citizen Username: Washashore Post Number: 30 Registered: 4-2003 |
Mr. Matthews: There is likely to be discussion/debate/decision (I'm not sure which - you weren't specific)on another PILOT in the next few weeks, according to a recent post of yours. It behooves the elected officials and their paid staff to hold a public informational meeting on Tax Abatements, PILOTS, and the Benefits Thereof for South Orange for idea exchange and information-sharing. Only in this way can the citizenry, elected officials, and employees reach common understanding on the issues that affect us all so deeply. We need this informational, Mr. Matthews, because while it is true that I do believe many of the residents understand the impact of the PILOT for Gaslight Commons on South Orange tax payers BETTER than do you or Mr. Rosner (or, at least, better than either of you are willing to admit to understanding), you, and the BOT have the power to make yet another PILOT-favoring decision, possibly as early as the next two weeks. So my question remains: WHEN WILL YOU HOLD THE INFORMATIONAL MEETING ON PILOTS AND THIER IMPACT ON SOUTH ORANGE THAT YOU AGREED TO HOLD WEEKS AGO? | ||
| woodstock Citizen Username: Woodstock Post Number: 173 Registered: 9-2002  |
J. Crohn, My long version of this got lost with a File Lock error. The short post is this. My understanding of what Mr. Matthews and Mr. Rosner are saying is that it wasn't Gaslight Commons, PILOT or not PILOT. It was Gaslight Commons as a PILOT or nothing. So there was no way to have it as a source of revenue for the schools, no matter what the choice. I could be misunderstanding, though. How can you be in two places at once when you're not anywhere at all? | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 207 Registered: 3-2003 |
Woodstock: "So there was no way to have it as a source of revenue for the schools, no matter what the choice." Maybe I'm crazy, but it seems to me that what is possible depends on what NJ law allows. Why would it not have been possible for a portion of Gaslight or any PILOT to be diverted to the school district? It shouldn't matter to the developer who gets his in-lieu payment. Could there be some advantage to forging an agreement with Maplewood, which we can expect will also employ PILOTs in redevelopment, to divert a fixed percentage of any PILOT to the school district? From a Cincinnatti Enquirer article about an accounting error in a school district budget: In 1998, Milacron, which makes plastic injection mold machines in Williamsburg, applied for foreign trade zone status through the federal government. Foreign trade zone status allows exemption from general personal property or inventory tax, allowing the business to export and import without tax penalty. The business is not bound by law to make any payment to the district to make up for lost income, but Milacron offered a $700,000 payment in lieu of taxes. The payment is made directly to the school district. As for situations more like ours, here's a report in which a board of ed member in Sayreville, NJ asks the borough to divert PILOT money to the school district: If approved, Neptune RTS, which is based in Maine, would use approximately 12 acres of land for the plant. The company has offered $2.25 million for the land, according to SERA attorney Roger J. McLaughlin, of McLaughlin, Bennett, Gelson & Cramer. The agency would accept $400,000 a year for 30 years in lieu of taxes, Mayor Kennedy O’Brien, also a member of SERA, has said. At the end of the 30 years, the company would begin paying regular taxes on the property, the mayor said. In order to use the Payment in Lieu of Taxes (PILOT) program, the area must be designated as a redevelopment zone, O’Brien said. O’Brien said that if the PILOT program were not used for the 12-acre site, the borough would collect only $75,000 in property taxes, a portion of which would be turned over to the state and the schools. As part of the PILOT program, all monies collected for the length of the agreement will go directly to the borough. Clark, also a member of the Sayreville Board of Education, said Dec. 4 that he would like the Planning Board to strongly urge the Borough Council to direct some of the funds collected through the PILOT agreement toward the schools. If Neptune RTS paid property taxes on the land, rather than using the PILOT program, the schools would benefit from the project, he said. "Payment in lieu of taxes takes away much needed funds on the Board of Education level," Clark said. D’Addio responded to Clark’s comment by saying, "It is my opinion that the Board of Education spends money foolishly." Planning Board members questioned if the board was allowed to make this suggestion to the Borough Council, at which point Hoebich directed them to hold off on the discussion until the Jan. 15 meeting. I bet there's no particular incentive for towns to part with money obtained from PILOTs, other than taxpayer unhappiness over steeply rising school-portion tax rates. But clearly, others have thought about this. PILOTs themselves were a creative solution to the tax-abatement-for-redevelopment problem. What keeps us from coming up with a smart solution whereby PILOTs help fund the schools? Just for example, we seem to have the inevitability of separate proposal items in every school district budget that exceeds the state cap on spending. Our towns' Board of School Estimate votes to accept separate proposals because to do otherwise would entail cutting important school programs and services. Could the BSE recommend using a portion of PILOTs to offset the cost of separate proposals? | ||
| woodstock Citizen Username: Woodstock Post Number: 174 Registered: 9-2002 |
JC, You're right. I misspoke. I was not commenting on whether a portion of the PILOT funds could be diverted to the schools, but rather on whether the PILOT program, in and of itself, took money away from the schools. In some cases it probably does. In this case I don't think it did because, according to people who seem to have been involved in the negotiations, GC would not have been built without the PILOT, and thus there was no alternate source of school funding. If there's a way to use "excess" PILOT funds for schools, I'm all for it. I think we need to keep an open mind when discussing this stuff. Rather than saying one party is wrong or misleading or only telling part of the story, let's have the discussion in a productive manner. There's a lot of emotion on all sides of this issue and as they say, cooler heads prevail. Mr. Matthews, any progress on determining a time/date for the discussion we've all talked about? As you can see, there's lots of interest. And I think a face to face can alleviate some of the confusion you believe reigns here. How can you be in two places at once when you're not anywhere at all? | ||
| mrosner Citizen Username: Mrosner Post Number: 443 Registered: 4-2002 |
Washashore: I left the timing of the meeting up to Mr. DeVaris who had volunteered to organize and to Mr. Matthews who was going to be the moderator. At no point did I say I was an expert and I never said would put together the meeting but that I supported the idea and would love to attend. I did say that July worked better for me schedule wise because of a very busy June schedule. I do think I have a much better understanding of a PILOT than you realize and just because we disagree about something does not make you right (unless you are my wife). The school budget did not change because of a PILOT and therefore they are getting the same funds from each town. The amount of school taxes did not increase because of a PILOT. However, the village is getting substantially more money which helps to offset increases (mostly salary). The money from the PILOT was not earmarked for any specific expense, but used in the general budget. Despite posters on here insisting we have given other PILOT agreements, which was untrue. I have been asked repeatedly about why we gave a tax abatement to the church street developer which was also untrue and another rumor started by some on this board during the election. Just to clarify, the village has one PILOT on the books and hardly means that there has been a pattern or a plan to PILOT every property in the redevelopment zone. When I moved to S. Orange in the mid-80's the high school was ranked in the top 50 and now is nowhere near that. That despite annual percentage increases that have been double what either township has increased their respective budgets. Clearly, money is not the only problem in our schools and giving them more money is not going to be their solution. NWYAVE: The village does have a long term projection for debt service and you can request John Gross to bring it to the next CBAC meeting. It would be unfair for any person to say that we should absolutely never give a PILOT again or that we should always give a PILOT to a developer. We should always have an open mind to discuss each project and weigh the pros and cons against each other whenver one is suggested. I did say I cannot see why Beifus should need or be given a PILOT. I still expect they would request one and I would expect the BOT to have open meetings regarding the request and the same will be true for the Shop-Rite site. Just like we probably would have had an abandoned auto dealership at third street without the PILOT agreement, it does not mean that should be the only reason to give a PILOT. Some developments might not be right for the village and that is another decision that needs to be considered. Allison: The bottom line is that if either town gives a PILOT and it helps to improve them in the long run, then I am in favor of the agreement even if Maplewood decides to use such an agreement. The idea is to use a PILOT only when needed and only when it helps the town. The reality is that I have said many times that the formula for calculating the split between Maplewood and S. Orange is flawed and needs to be revamped. I only wish Maplewood would say that we should base the split on total population of the towns instead of the wacky wealth formula now used. The split would be 59- 41 (vs. the current 57 -43) based on total population. I don't suggest we use average student population (that would make the split 65- 35), just something fairer. This PILOT did not screw Maplewood but did help S. Orange. And it certainly did not have a negative impact on any residents tax bill but did help to offset an increae or a cut in service. Ed, I leave it up to you to pick a date and for John Gross to organize a meeting on PILOT's or maybe have the next CBAC meeting be just such a meeting. | ||
| David Lackey Citizen Username: Davidlackey Post Number: 28 Registered: 4-2003 |
Pilots and abatements do not change the AMOUNT of money going to the schools. The school budget is what it is. Pilots and abatement do change two things: 1. The percentage of the school tax bill that S.O. pays (as a function of total assessed property value in S.O. vs Maplewood): A piloted property in S.O. is "off the books" and reduces the total assessed property value in town. This then reduces the percentage that S.O. must pay. One would hope, however, that if a property were on the books, that the tax they pay would more than cover the increase the town would have to pay. * A call for clarification on this point: Is the S.O. vs Maplewood percentage actually determined by ASSESSED VALUE or by MARKET VALUE? Obviously, the argument in favor of pilots (as it relates to school taxes) only works if the percentage is based on assessed value. 2. The percentage of S.O.'s portion of that school tax bill being paid by homeowners: Once the percentage of the school tax bill S.O. must pay is determined, the amount is divided up among taxpayers. Since piloted properties pay no school tax, this means more school taxes being paid by homeowners. This, to me, is the root of the issue. As long as schools are funded by property taxes, the only way to bring meaningful tax relief to homeowners is to have more of the bill paid by commercial property owners. It has been stated clearly that Gaslight Commons would not have been built at all without their tax deal. If that is true, then fine, let's move forward. Beifus and the Market are the now on the table. Can it possibly be argued that these two sites in the heart of our downtown will not be developed if they do not get tax breaks? We will soon find out. Why, though, does this part of the process occur now - AFTER the Board of Trustees and the Planning Board have spent so much time and effort analyzing the proposed development plans? To send residents drawings and descriptions in the Gaslight makes it seem like a done deal. If the town now says "no tax break," will that mean "no deal"? If so, the process must be changed. | ||
| doublea Citizen Username: Doublea Post Number: 193 Registered: 3-2003 |
Mark,Ed, John, Pat and Allan: I think that the suggestion J.Crohn made above about directing the use of Pilot funds (if in fact another Pilot is granted or discussed) is an extremely constructive suggestion. It is the type of suggestion that warrants discussion by the full Board of Trustees and Village President,and not left to a CBAC meeting. | ||
| mrosner Citizen Username: Mrosner Post Number: 445 Registered: 4-2002 |
I agree with David that the process should be modified. The timing issue is an issue that several of the trustees have already raised. I am just not sure how that can be done or if it even can be changed legally. The formula works off of assessed values (not market values) but there are other factors too. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 208 Registered: 3-2003 |
"...just because we disagree about something does not make you right (unless you are my wife)." Now, see, this is what I like about Rosner. He is a pragmatic man. "When I moved to S. Orange in the mid-80's the high school was ranked in the top 50 and now is nowhere near that. That despite annual percentage increases that have been double what either township has increased their respective budgets. Clearly, money is not the only problem in our schools and giving them more money is not going to be their solution." Not the only solution, to be sure. But look at it this way: our district's early reading curriculum is regarded by its teachers, at least some principals, many parents, and a team of outside professional researchers, as woefully inadequate. Some 20-40 % of our kids are in reading remediation by first grade because they get little or no explicit, systematic phonics instruction in kindergarten. Remediation (Project Ahead) can't be cheap, but the solution everyone I've talked to believes would solve our curricular problem is even more costly: eliminate the current hidge-podge curriculum and replace it with a published, research-based curriculum approved by NJ Reading First. As long as the expense issue remains, our school administration will be able to claim we can't do right by our kids, and it will leave the curriculum in the hands of its whole-language ideologues. But South Orange could, if we were creative and the law permitted, obviate that excuse: we could divert PILOT funding to the district for the express and sole purpose of obtaining a properly explicit, systematic, state-approved reading curriculum. And we could potentialy team up with Maplewood to do it. Of course, if the reading curriculum were not where South Orange wanted to put its resources, we could put them elsewhere: grants for high school programs, police liaisons in the middle school, whatever. We could entertain requests from the district, or from the school board. If necessary, allocations could be decided by village referendum. Why should we not employ PILOT money to leverage our influence over schools decisions? | ||
| dgm Citizen Username: Dgm Post Number: 116 Registered: 5-2001 |
To keep things on point, I think any objections to PILOT's stem from the fact that they remove an assessed value resource from the school tax rolls. A balance has to be struck where the Village is not restricting the tax base in a way that is detriment to schools while enhancing the quality of life in the Village. The schools are as much a key part of the attractiveness of our village as the downtown. People do move out of SOM because of the quality of the schools-- it is not just the taxes. Thus, PILOT's become a hot issue for people with school age children, among others. | ||
| mrosner Citizen Username: Mrosner Post Number: 446 Registered: 4-2002 |
dgm: The school budget does not change because of a PILOT. A property that is given a long-term PILOT does not count in the formula for determining the split between the two towns. The objection to the Gaslight Commons PILOT is that they are paying less taxes than they would have if there was not a PILOT. Even if they paid a portion to the schools, the objections would still remain. The thing that people seem to forget or ignore is that in this case there would not have been a project without a PILOT. Some people argue that we could have negotiated a better deal. Well, maybe that is true and certainly easy to say that now, but if we had let that become an abandoned parking lot, we would still be getting $82,000 in total (approx $21,000 to the village) and not the more than $500,000 we are going to be getting by next year. The real question is "are we better off with a development and receiving $500,000 plus or approx. $65,000 (school plus municipal portion) if it had not been built. The reason we know they would not have built without a PILOT is that the higher amount due if there was a PILOT would have significantly increased the rents per apartment. So instead of a 75% occupancy, maybe it would have been only 50% occupied or maybe less. And then they would have filed for an appeal to have the assesment lowered and the taxes lowered. | ||
| woodstock Citizen Username: Woodstock Post Number: 176 Registered: 9-2002 |
Mr. Rosner, Just a question. You indicate that before Gaslight Commons, the property was paying $65k in School and minucipal taxes. If that is the case (which I truly may have misunderstood), then in fact a source of tax revenue was taken away from the schools. I think everyone would agree that the less the county gets, the better off everyone is. But it would seem that about $40k of that $65k would have gone ot the schools. Am I missing something? Always a strong possibility. I'm not saying that our overall taxes would be lower without the PILOT. But would not our school taxes be incrementally lower if Gaslight Commons were not built? I realize this is a dangerous comment to make, because as I said above, even if the school portion of our taxes is higher than before Gaslight Commons, we can reasonably assume our municipal taxes are lower than they would have been. I just want to make sure I understand everything that's being said. How can you be in two places at once when you're not anywhere at all? | ||
| dgm Citizen Username: Dgm Post Number: 117 Registered: 5-2001 |
Mr.Rosner, You jape so. How could anyone apply school tax revenues not generated by the Gaslight Commons to the School revenue budget? Perhaps one could apply them to the expense budget? Ah, but I am so naive.... | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 213 Registered: 3-2003 |
"The objection to the Gaslight Commons PILOT is that they are paying less taxes than they would have if there was not a PILOT. Even if they paid a portion to the schools, the objections would still remain." I don't know about everyone else, but my objection is not that LCOR is paying less taxes than they would have if there were no PILOT. I do understand that PILOTs make necessary development possible where otherwise it would not be. My objection is that the money that our community receives in lieu of taxes is not spent in the school district, which, unlike the Village, has to contend with things like exorbitant unfunded government mandates. Again, if the issue is that we believe the district is wasting money, then let us offer help (in the form of grants) only where we think the district will use it productively, and only on condition of accountability. |
