Dear Editor:
Since 5 PILOT projects were approved by a 3-2 Town Council vote a year ago, no shared revenue per pupil agreement between the Town and the BOE is in force.
Here are excerpts of the executive summary of a 2010 report by NJ State Comptroller, Matthew Boxer titled “A Programmatic Examination of Municipal Tax Abatements.”
• Payments to municipalities by businesses and developers in lieu of taxes, known as PILOT payments, distort municipal incentives in using and structuring abatements at the expense of counties, school districts, and other taxpayers.
• Information concerning abatement agreements is not published in a transparent manner or centralized location, making it difficult to impossible for the public to compare, calculate the effect of, or be fully aware of those agreements.
• Directly affected stakeholders are not involved adequately in the abatement decision-making process.
• Redevelopment areas in which abatements may be granted typically are not periodically reviewed to account for neighborhood changes or improvements.
Tax abatements should be used carefully and sparingly given the multitude of pitfalls, their far-reaching impact, and the reality that exemption from taxation is a departure from the normal allocation of tax obligations.
We (NJ Comptroller’s office) recommend:
• Counties, school districts and the public should assume greater roles in the abatement process.
• Pilot arrangements should be structured in a way that encompasses the interests of counties and school districts.
,• A thorough cost-benefit analysis of community impact should be undertaken before awarding an abatement.
For those following the Pilot Saga, Comptroller Boxer’s concerns are prescient.
When reminded of this report at a recent Town Council Meeting, Mayor Barberio claimed legislation is needed to amend PILOT programs. Nothing in the legislation prevents the Mayor and the Town Council from doing what they ought to do and engage with stakeholders. NJ made PILOTS an optional tool, not a requirement.
Apparently, the Mayor hopes the 2025 election passes before the public realizes it faces a massive tax increase to make up for lost funding in the future from pilot programs and 600 additional students.
In the author’s opinion, it is imperative that a signed recurring per pupil shared revenue agreement between the Town and the BOE is in place before the 2025 elections, so voters can decide.
Jack Raia
