| Author | Message | ||
     mrosner Citizen Username: Mrosner Post Number: 449 Registered: 4-2002 |
J. Crohn: Actually the village also has to contend with unfunded government mandates. | ||
| David Lackey Citizen Username: Davidlackey Post Number: 29 Registered: 4-2003 |
Woodstock, regarding your earlier post: "before Gaslight Commons, the property was paying $65k in School and municipal taxes. If that is the case...a source of tax revenue was taken away from the schools...about $40k of that $65k would have gone ot the schools." The disconnect here is, as Mark pointed out, the school budget stays the same. So, the taxpayers of S.O. and Maplewood (us homeowners) are now each paying MORE to make up that $40,000 in the school budget. (This negative statement ignores the positive effect the deal should have on our municipal taxes and whatever other benefits the development supposedly brings to town.) | ||
| woodstock Citizen Username: Woodstock Post Number: 185 Registered: 9-2002  |
David, That is what I was trying to get cleared up. Thank you. That is why I said sources, not actual funds... So from a school tax perspective, we're worse off with a PILOT, but we make it up in volume... er, lower municipal taxes. How can you be in two places at once when you're not anywhere at all? | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 215 Registered: 3-2003 |
"Actually the village also has to contend with unfunded government mandates." Well, I specified exorbitant unfunded mandates (e.g., special ed). Is what you are referring to of the same magnitude in terms of potential tax burden or proportion of the Village budget? By the way, I'm interested in your view mentioned above about money not being the problem in our public schools. You're not alone in believing it could be better spent, but if you were Supreme Ruler and your purview included overseeing school budgets, how would you re-prioritize things? | ||
| mrosner Citizen Username: Mrosner Post Number: 450 Registered: 4-2002 |
David, Woodstock: That is correct, and note that you say that the taxpayers of S. Orange AND Maplewood have to make up taxes that S. Orange homeowners were paying. Maplewood residents will have to pay 57% of what was our portion of the school tax bill leaving less than $18,000 to be split among S. Orange residents. In the meantime the village is getting $480,000 more than it was getting before. The net result is obviously a tax savings to the residents of the village. I understand this situation only makes sense if we use a PILOT to bring in a development that we would not otherwise have had. Before any one gets the idea that this PILOT was used to hurt Maplewood, that is not true. In the long run it helps both towns because the overall success of both towns can only be a positive. There was nothing good that could have come from having an abandoned auto dealership in a residential neighborhood in either town. | ||
| doublea Citizen Username: Doublea Post Number: 197 Registered: 3-2003 |
We seem to be in agreement on a lot of points and our understanding also seems to be on the same wave length. Using Gaslight as an example, the payment by Gaslight was 2% of the construction cost of $25 million or $500,000(with a formula used for future escalation). The taxes that would have been paid otherwise would have been $1 million. Basically the Pilot arrangement results in a wash for S.O. taxpayers, except for the argument that S.O. taxpayers pick up the shortfall in school taxes that would have been paid by the Pilot, although this is made up in municipaltaxes. Why can't the Pilot payment be a little higher than 2% of construction cost,say 3% or even 2.5%.The developer still is better off than if the property had not been piloted. In addition, a portion of the pilot funds could be directed to S.O's share of the school budget (which would not increase the total share of S.O.but reduce other S.O. taxpayer's share somewhat). This would only apply of course in a situation where a pilot is absolutely required to get the project done. If structured this way, it is really a win-win situation. The project is built, the Village gets revenue (reducing the tax burden on S.O. taxpayers), the Pilot pays something to the schools (reducing the tax paid by other S.O. taxpayers). Mark, at one time you had jokingly suggested this (I thought it was said in jest) but if it's doable why don't we go for it? | ||
| dgm Citizen Username: Dgm Post Number: 118 Registered: 5-2001 |
Doublea, Good suggestion. Sounds like the formulation of a potential Village policy after 246 posts. Now if the Village officials will go for it... Further, MOL will have done what no one else has - sponsor a discussion about PILOT's and their impact on Village and School taxes. | ||
| Edwin R. Matthews Citizen Username: Edwinrmatthews Post Number: 40 Registered: 3-2003 |
Doublea's post of 6/17 (2:56 P.M.)has atleast three problems. The taxes on the LCOR site would not be over a million. They would be closer to $700,000.00. With respect to the per cent of construction costs two and a half or three percent would be better if the project could support such a payment. In the case of LCOR it could. Diverting some of the money to pay some of south orange's share of the school tax - if it could be done - is a distinction without a difference. The south orange tax payers would pay the same amount of taxes because the money diverted to the schools would have to be raised as part of the municipal portion of the taxes. If south orange gives $100,000.00 of the pilot to the school board to cover the school assessment then that is $100,000.00 south orange won't have from the pilot to offset a tax increase. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 220 Registered: 3-2003 |
"Diverting some of the money to pay some of south orange's share of the school tax - if it could be done - is a distinction without a difference." Well in that case, we might just as well hand over 100% of all PILOTs to the schools, since that would reduce the taxes the district has to raise. Sure, the Village would have to raise that much more funding from property taxes to compensate for what we gave away from PILOTed development, but why should the citizenry care? After all, we'd see a compensatory reduction in the school portion of our tax bill. This isn't just about bottom lines. It's about distributing revenue judiciously across community needs in the service of fairness, self-interest, or both. Again: if South Orange distributed PILOT-derived grant monies to the district, like any donor we could specify what they could and could not be used for. A committee composed of Trustees and the SO members of the Board of School Estimate could recommend grants based on requests from the BOE, or the admin, or Maplewood's BSE reps, or the PTAs, for that matter. You could limit town grants to district budget items, or to ancillary items not paid for in the district budget. You could make the grant in matching funds: for instance, offer that if the district reduces administrative salaries in the top tier of management by 2% over two years, we match the total reduction and the whole bundle is then spent on retaining a teacher or a program considered essential. Or you could make a similar grant challenge to SOMEA; what if the town had had the resources to step in during the last contract negotiations and offer to pay teachers a "service fee" in lieu of some amount of district compensation? Obviously, I'm throwing out all sorts of possibilities here, and there are probably good reasons why not all of them could work. But I see no reason why we should not think creatively about PILOTs and what to do with them. | ||
| doublea Citizen Username: Doublea Post Number: 198 Registered: 3-2003 |
There seems to be complete unwillingness to use pilot funds for school tax purposes (and evidently it can be done based on JCrohn's research). Why? | ||
| David Lackey Citizen Username: Davidlackey Post Number: 30 Registered: 4-2003 |
doublea and J Crohn, It really doesn't matter where the pilot money goes once a pilot is in place. If South Orange taxpayers are responsible for paying $40 million to the schools and $24 million to the town (not accurate numbers, just rough examples), where we decide to allocate the $500,000 of pilot money will not change either our property taxes or the amount of money going to the schools and town. The pilot money chips away at the total tax bill no matter where you put it. It is not bonus money. The problem is that the pilot is a lot less money than if the property paid regular taxes, so should be granted only in cases where no development would take place otherwise. | ||
| mrosner Citizen Username: Mrosner Post Number: 451 Registered: 4-2002 |
Maplewood pays 57% of the school bill. If we "donate" a portion of the PILOT money, how would that work. Do we say we want $100,000 used for something so here is $43,000 and Maplewood must put up $57,000? Or are you suggesting that S. Orange pick up 100% of the cost despite the fact we already pay more than what I think is a fair share. The village representatives on the BSE have been in favor of keeping programs and teachers. The resistance has been from the present school administration and the unwillingness to make cuts where needed. I think it is better to use the PILOT revenue to stabalize the municipal portion. The BOE has never been willing to let the BSE tell it how to spend money or what projects the money should be spent on. They won't even discuss their budget let alone accept money that would be earmarked for something we felt was needed. Just think back to the courtesy busing issue when they tried to take that away despite the dangerous situation that would have created. We had to fight to get them to keep the buses (and yes, we offered to pay the full cost!). If one looks back to the mid-90's and the complete lack of planning for the increase in the student population they knew was coming and you can see that problems are not going to be solved by giving the Supt. more money to spend. There has never been a comprehensive long-term budget process at our schools. In several years the student population is expected to shrink, but one can almost bet that the school budget will not be adjusted nor will they take that surplus to start planning for the next mini population boom. I don't think the BSE or the village need to step in for contract negotiations, but we should be able to participate in the budget process. It might be nice to think that all the problems for the schools could be solved by giving them some of the money from the PILOT and even if we could, it would not be the answer. I would however and did suggest that we "purchase" some property from the BOE for our recreational purposes (like the field next to the old Montrose School which is not being used). Then they could have those funds to help offset one time budget items. | ||
| doublea Citizen Username: Doublea Post Number: 200 Registered: 3-2003 |
The problem is that if South Orange gets the pilot money entirely, it can say look at the good job we've done in holding municiapl taxes down. Then the SO members of the Board of School Estimate, bowing to public pressure, give carte blanche to the Board of Education to pass any special questions, without asking for more discipilne in the budget process. This is exactly what happened this year.If the Village had to share the pilot money with the schools, it might instill a little more budget discipline on the part of the Village, as well as telling the BOE to revise the budget process. It all has to work together. And of course we're only talking about the case where a pilot has to be granted. The suggestion of using a higher percentage that 2% is still out there. | ||
| dgm Citizen Username: Dgm Post Number: 119 Registered: 5-2001 |
David is right, it is not totally appropriate to divert town tax revenues to the school district. Curiously in New Jersey, through some quirk, the lowest form of government has to bear all the risk of collecting school, county and local property taxes so there is a lot of information collected in the same place. However, if the village and the school district work together with a developer (if that it possible)to fashion a bearable tax load, then you have a possible solution. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 223 Registered: 3-2003 |
David: "It really doesn't matter where the pilot money goes once a pilot is in place." Sure it matters. It matters a hell of a lot. The fact is, if you (just to illustrate) paid 100% of any and all PILOT monies to the schools instead of the town--that is, if you simply reversed the current situation--the schools portion of our tax bill either would not rise as quickly as it has, or it would decrease. Meanwhile, the town portion of our taxes would rise precipitously, just as the schools' portion has done in real life. Which elected officials would then take the heat from taxpayers? The school board or the trustees? And which would be forced to cut services? I am of course in no way recommending we hand over all PILOT money to the schools. As things stand now, the district must cut services. By insisting that it doesn't matter who gets the money because we all pay the same price in the end, you completely ignore the political and qualitative components of budget allocations between competing taxers. Let me be specific: we are seeing the elimination of teachers, programs, and electives throughout the school district because the electorate will not tolerate an 11% tax increase to fund it any more than it would tolerate an 11% increase in town taxes. I think you ignore also the possibility that one party might, if it were willing to spend some of its haul judiciously, influence how the other party spends its budget, or force that budget to become more transparent, or any number of other potential goods. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 224 Registered: 3-2003 |
"Maplewood pays 57% of the school bill. If we "donate" a portion of the PILOT money, how would that work. Do we say we want $100,000 used for something so here is $43,000 and Maplewood must put up $57,000? Or are you suggesting that S. Orange pick up 100% of the cost despite the fact we already pay more than what I think is a fair share." It depends on what we want to accomplish. If Maplewood is willing to divert a portion of their PILOTs as well, then I don't see why we couldn't negotiate with them to pick up whatever percentage we think is appropriate for a grant to the district both towns believe would serve mutual interests. There is no reason we must stick to the ordinary funding formula used for taxes: remember, we don't have to give the schools a dime of our PILOT money. We are offering grants. Nobody says to the Pew Foundation, "You must give our grantee 57% because we're giving him 43%." But we could conceivably establish a PILOT fund with Maplewood such that they agree to contribute x% of their PILOT revenues and we agree to contribute y% of ours. "The village representatives on the BSE have been in favor of keeping programs and teachers. The resistance has been from the present school administration and the unwillingness to make cuts where needed." I am no fan of the present admin, but as a citizen I have absolutely no idea where cuts are needed. This is because it is impossible for me or anyone I know to understand what the hell is in the district budget to start with. But if you know, and if you know where cuts need to be made, then you could make a white-hot political issue of demanding the district admin account for why it will not take good money from the Village of South Orange in exchange for making those cuts and getting its house in order. "I think it is better to use the PILOT revenue to stabalize the municipal portion." Well it is easier; I don't know if it's better. "The BOE has never been willing to let the BSE tell it how to spend money or what projects the money should be spent on." As I understand it, the BSE can only approve special budget questions. It cannot dangle thousands of extra dollars in front of the school bureaucracy. "They won't even discuss their budget let alone accept money that would be earmarked for something we felt was needed. Just think back to the courtesy busing issue when they tried to take that away despite the dangerous situation that would have created. We had to fight to get them to keep the buses (and yes, we offered to pay the full cost!)." Could that offer have had anything to do with why they kept the buses? (Could you please educate us some more about this issue? I for one am completely ignorant of what happened.) My sense is, money talks, and sometimes it shames people into doing what they ought to. We should make our PILOT money talk to the school board--which, by the way, has some new members now who want very much to see a long-term planning process initiated. Like, yesterday. "It might be nice to think that all the problems for the schools could be solved by giving them some of the money from the PILOT and even if we could, it would not be the answer." Hold on. I haven't said anyting about solving all the problems of the schools! "I would however and did suggest that we "purchase" some property from the BOE for our recreational purposes (like the field next to the old Montrose School which is not being used). Then they could have those funds to help offset one time budget items." Nothing wrong with that idea (other than that I would much prefer more accountability from the district, and if we buy its property we're not buying its accountability). Of course it probably isn't radical enough to get press attention and generate public outrage should the district turn you down. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 225 Registered: 3-2003 |
Mark: "I don't think the BSE or the village need to step in for contract negotiations, but we should be able to participate in the budget process." Yes, we should be able to participate in the budget process. Perhaps having a carrot to offer (preferably in concert with Maplewood, which may offer PIlOTs in developing Springfield Ave.) might make that more likely. AA: "The problem is that if South Orange gets the pilot money entirely, it can say look at the good job we've done in holding municiapl taxes down. Then the SO members of the Board of School Estimate, bowing to public pressure, give carte blanche to the Board of Education to pass any special questions, without asking for more discipilne in the budget process. This is exactly what happened this year.If the Village had to share the pilot money with the schools, it might instill a little more budget discipline on the part of the Village, as well as telling the BOE to revise the budget process." Exactly. Dgm: "However, if the village and the school district work together with a developer (if that it possible)to fashion a bearable tax load, then you have a possible solution." Do you mean something along the lines of Doublea's 2.5% proposal, but in which the developer pays the additional .5% directly to the school district? "David is right, it is not totally appropriate to divert town tax revenues to the school district." Why, particularly when they are not, strictly speaking, tax revenues, but in-lieu-of-tax revenues? | ||
| David Lackey Citizen Username: Davidlackey Post Number: 32 Registered: 4-2003 |
J., Do you think that if we send the BOE some money from pilots instead of 100% regular tax dollars to pay for their already-determined budget, that in some way it would change the amount of the following year's budget? Tax money and pilots all go toward paying for the existing budgets. What am I missing in your idea? The Board of Trustees is easier to bully into cutting costs than the Board of Education? I still do not see how the flow of tax dollars vs pilot dollars would change either body's spending habits. | ||
| dgm Citizen Username: Dgm Post Number: 120 Registered: 5-2001 |
J. Crohn, Yes, that is one possibility. I think the village has the primary right to formulate the PILOT and then gets permission from the county to do it. I am not sure whether the school district has any rights in this process? Mr. Matthews, can you answer that? | ||
| mrosner Citizen Username: Mrosner Post Number: 454 Registered: 4-2002 |
JCrohn: The BOE and the School supt. do not want to discuss the budget with the village. They have made that clear. Carrot or no carrot, they have not shown any interest. The BOT seems to take the heat for both and the voter turnout is the proof of that. Only 7% of the registered voters would show up on election day. One can almost win that election just by handing out absentee ballots as their campaign strategy without having a platform. The BOT members are often asked about the schools and their budget yet, I doubt that a BOE member is ever asked about the problems of the village (well except for Brian since he ran for village president). Several years ago they wanted to end "courtesy busing" which meant that some children would have had to walk less than the distance required for the schools to provide busing but still further than most parents wanted their children to walk. That meant the village was going to have to hire several crossing guards and put in additional sidewalks. Since it presented a safety issue for children we offered to pick up the cost of the busing and after some discussion, they finally agreed to reinstate the courtesy busing. I try to do what is best for the village. Using the PILOT revenue for the municipal budget is what I think is best for all the residents. It would not be fair to turn over money to the BOE unless Maplewood participated no matter where the funds come from (PILOT or elsewhere). They are required to pay 57% of the school budget and I would not participate unless they paid their share. Just because we have PILOT revenue does not mean that we should pay extra (we already pay more than what is fair in my opinion). We have an entity called Seton Hall University which pays far less than what they would if they were not tax-exempt (We have a PILOT with them but it is a different kind than the one with Gaslight). Maplewood has nothing that compares with SHU. We need to provide fire and police for SHU along with all the other services. This PILOT helps to balance the scales. If the BOE thinks they have a project that is outside their budget, then they should make that request to the two towns and the three groups can work towards accomplishing that goal. |
