Community Voices: High Density PILOT Agreements are Plain Evil

Bruce Paterson is a resident of Garwood, NJ

Dear Editor

Presently, all towns are experiencing budget cycles of government. In our Garwood borough, a 380-unit high density project was opened 3 years ago and is now occupied. This complex sends 24 district students to our schools, 4 of them are special needs. These special needs students, that were not in our district before, is now costing us over $500,000. It is certainly our obligation to educate all Garwood’s children of course.  

However, residents must be aware that with PILOT agreements given out by towns like Halloween candy, the school district gets no revenues, as most of the high-density complexes are tax exempt and under special PILOT agreements. Municipal governing bodies are the ones that create this PILOT agreement with the developers, and it is based solely on a % of annual rental income the developers receive.  Note PILOT revenues are basically 25-40% discounted from normal taxation that we as homeowners incur. Under this agreement our governing body presently receives nearly $1 million/annually for their muni budgeting.

Two years ago, our BOE, after begging the municipal end to share some of all that revenue, was granted to receive $55,000 to cover all the students coming from the complex. IOW, the $55,000 is to cover the $500k for special ed plus over $200,000 to educate the balance of the complex’s students, so the school budget is hit with roughly a $700,000 impact.

This is a lesson all towns must recognize: giving freebie property-tax exemptions makes school entities’ budgets implode, with the existing taxpayers always having to foot the bill.

Our towns and legislators are tone deaf, regretfully.

Very Truly yours,

Bruce Paterson

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