Community Voices: Why Garwood Council Happily Gives Out PILOT Agreements

Bruce Paterson is a resident of Garwood

Dear Editor

My recent letter to Westfield Leader and public statements elicited some outrage and pushback about our council’s failure to address proper PILOT revenue sharing with the school district. However, it was more a distraction the governing body tried to create, avoiding the true issue. I believe it’s time to expose what their attempted distraction really is. This explanation easily transcends to other towns and their PILOT analyses.

Sadly, our misdirected legislature enacted a law, that “high density residential complexes” can be given a tax exemption thru a PILOT agreement between the towns and the developer. This instead of normal taxation like our own homes have. I previously noted this shortfall of proper revenue from the complexes can be found to be between a 25% to 50% discount to regular taxation. The odd equation format of the PILOT is that the municipal end gets 95% of this revenue and the county gets 5%. The school district gets “zip”.

All towns have a “Municipal User-Friendly Budget”. On sheets UFB-5 and 6 list your town’s PILOT related residential complexes. There are columns identified as “PILOT revenue billing” and “Taxes if billed in full”. These are important columns as to understanding why towns are giving out PILOTs like candy at Halloween.

For Garwood, our normal taxation break-down on the 3 govt entities is: municipal=36%, school district=46.5% and county=17.5%. Let’s focus on the muni end for this expose. Our Vermella complexes’ “PILOT billings” total $1,215,000. But if assessed and taxed normally, the taxes would have been $2,483,000. Per state PILOT law, Garwood muni gets 95% of the PILOT revenue which is 95%x $1,215k =$1,154,000. But if normal taxation was imposed, the muni would have only received 36% of $2,483,000 which is $893,000. The muni actually receives thru the PILOT agreement and extra +$261,000. ($1,154k minus $893k). So why this extra over a quarter million dollars into the municipal pockets?

The answer may shock you. The PILOT agreement actually is only created and approved between 2 entities, the municipal governing body and the developer. The school district board is left totally out of the equation and gets no moneys. There certainly appears to be something questionable involved with all these municipalities happily creating and approving PILOTs with the developer. Can anyone say self-dealing?

Very Truly yours,

Bruce Paterson

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