PILOT agreements are indefensible (Letter to the Editor)
We are longtime residents, taxpayers and cheerleaders for Montclair. Our children attend Hillside Elementary and Montclair High School.
We fully support the progressive, dynamic and inclusive development of Montclair. But the township’s choice to rely on Payments in Lieu of Taxes, or PILOTs, to spur development and its destructive decision to hoard those dollars is starving our public school system. It’s high time that the Montclair Township Council equitably shares PILOT dollars with the young people in our community.
While the township keeps just 29% of property-tax collections, PILOTs work differently. Under negotiated agreements that can last as long as 30 years, Montclair Township agrees to give developers a discount on their tax bill. Then the township keeps 95% of the payments and sends the balance to Essex County. Local schools get nothing.
Compare this to regular property taxes, the ones that you and I pay. The school district gets 53% of those dollars and the county gets 18%. PILOTs are a great way for the township to double its dollars and make deals with developers, so long as nobody notices that it’s stealing from our kids.
This is far more than lunch money. In the 2022 tax year alone, Montclair Township planned to forgo $5.9 million in property taxes and collect $4.3 million from PILOT agreements instead. Had the PILOTs not been in place, the Montclair Public Schools would have received $3.1 million in property tax collections. If the township shared PILOT collections in line with property tax distributions, the Montclair Public Schools would have received nearly $2.3 million.
Instead, our elected Township Council decided that the public school district got $0. No wonder firing teachers and cutting programs have become as sure a sign of spring as cherry blossoms and daffodils.
PILOT agreements may be legal, but they are indefensible. “It creates a perverse incentive whereby the municipality may gain revenue through granting an abatement, while other government entities lose out. This imbalance should be eliminated,” the State Comptroller’s Office recommends.
States like Pennsylvania give school boards a vote on PILOTs, and legislative action is surely needed. But Montclair doesn’t have to wait to do the right thing. The Township Council has the power to share PILOT dollars fairly with our public school district, right now.
For example, our neighbor Cedar Grove sends $1.2 million annually in PILOT funds to public schools and has committed to doing so for the next 25 years. In a 2022 announcement, township leaders explained why: “Although the township is not required to provide these funds to the district, it has determined that doing so is in the best interest of township students, their parents, and the public as a whole.”
Some of our elected officials claimed this week that they didn’t really understand the options on the table, but a spirited, engaged community of students, educators, families and citizens of all stripes have made sure that they do.
Councilors also should study up on what voters clearly want: responsive oversight and investment in our public schools. In 2021, voters overwhelmingly approved upending mayoral appointment in favor of an elected Board of Education – a proposal that had been rejected in five other attempts over the previous 50 years. Then in 2022, Montclair voted 4-1 in favor of a $188 million bond referendum to fix our aging school buildings.
What’s ahead in 2023? Fix the PILOT disaster or face the consequences.