PARSIPPANY — The Parsippany Board of Education (BOE) has released a detailed statement outlining its history of discussions with Parsippany-Troy Hills Township regarding Payment In Lieu of Taxes (PILOT) agreements and the district’s ongoing concerns about the financial impact of PILOT-funded residential developments on local schools.
According to Alison Cogan, President of Parsippany Board of Education, “Concerns were first formally raised with the Township in November 2023, when the Board highlighted the growing number of students generated by PILOT developments without a corresponding increase in education funding. At that time, the BOE requested that the Township consider a per-pupil contribution to help offset the cost of educating students living in PILOT properties.” Currently, the District is receiving students from two separate PILOT agreements: 1515 Route 10 and Avalon Properties, located on Campus Drive.
The Township provided its first written proposal in May 2025, but the BOE states that subsequent attempts to continue discussions were met with little to no communication. In response, the BOE retained special counsel in late spring 2025 to assist with drafting a proposed ordinance that would address education funding concerns. That draft ordinance was sent to the Township Attorney in July 2025.
The BOE reports that no official response was received until November 24, when the Mayor requested a meeting. A subcommittee of the Board met with Township representatives on December 4. During that meeting, the Township requested publicly available data on the district’s actual tuition costs. The BOE provided the requested information the following Monday, showing that in-district per-pupil costs range from approximately $17,000 to $43,000, while the average cost for out-of-district placements is approximately $65,000.
The BOE states it was told the Township would respond within a week. Instead, the Board reports that it received a revised ordinance at 4:01 p.m. the night of the special board meeting to discuss PILOTS. While the revised proposal increased the Township’s initial per-pupil amount, the BOE says it still falls below the district’s average per-pupil costs and includes language changes that make any payment to the Board uncertain.
Sources close to Parsippany Focus indicated that the Township proposed a per-pupil contribution of approximately $12,000 — a figure substantially lower than the district’s documented per-student costs.
The statement further asserts that the revised ordinance contains additional limitations that the BOE considers misleading and that, overall, it fails to address the fundamental issue of securing adequate funding for the additional students generated by PILOT developments.
“This is a Township ordinance. The board has no authority to vote or agree to it on its terms. That said, the Board is unanimous – we will not endorse or otherwise sanction this proposed ordinance because it does not meet the needs of our community,” said Cogan.
Despite its opposition to the current proposal, the Parsippany Board of Education reaffirmed its commitment to students and staff and indicated it remains open to further discussions in the New Year in hopes of reaching a solution that adequately supports the district
A Payment In Lieu of Taxes (PILOT) agreement is a financial arrangement between a municipality and a developer in which the developer makes a negotiated annual payment to the municipality instead of paying traditional property taxes.
Under New Jersey law, PILOT payments are retained almost entirely by the municipality, with a small portion remitted to the county. Local school districts do not receive a direct share of PILOT revenues, even though residential developments approved under PILOT agreements may generate new students who attend public schools.
Municipalities often use PILOT agreements as an economic development tool to encourage redevelopment or attract large-scale projects by offering predictable, reduced tax obligations to developers. Supporters argue that PILOTs can stimulate investment and increase long-term ratables once agreements expire.
Critics, including many school districts across New Jersey, have raised concerns that PILOT-funded residential developments place additional strain on school budgets, as districts must educate new students without receiving proportional funding from those developments.
