Why would our Chatham Borough Council even consider gifting our River Road PILOT money to anyone when we’re in such desperate need of fire trucks and other necessities?
That was the elephant in the room at the Monday, 3/13 meeting of our Borough Council.
The elephant got loose during a presentation by a principal of BNE, the developer of the massive, stick-built apartment project going up at the corner of Watchung Avenue and River Road.
Asked if our volunteer fire department has the equipment, the manpower, and the training necessary to fight a real fire at River Road, the presenter, a principal with the developer, BNE Real Estate Group, said, “Yes, currently Chatham Borough has what they need to fight a fire in that building.” See the video linked below starting about 1:18:00.
Brave, dedicated, and skilled as they are, our volunteer firefighters need more personnel, more training, and far newer fire trucks than Chatham Borough has – or can provide anytime soon, according to longtime, respected Borough resident Robert Penn, a former captain in the Bloomfield Fire Department who worked in the fire service for 44 years and has taught classes in Building Construction and Advanced Firefighting Tactics and Strategy. (Go to minute 37:46 in the following video:0)
Popular Borough Council Member Len Resto is working on getting the fire trucks we need. It will cost a bundle. The Council should use our PILOT money for tax relief and fire trucks, not for gifts. Certainly not without the informed consent of Chatham residents.
That the Council would even consider giving away our PILOT money without our consent is mind boggling. It’s a great example of what can happen when we don’t hold our elected representatives accountable for their decisions.
If the Council explains the situation, and residents vote to give away our PILOT money anyway, that’s their choice. But residents are entitled to know what’s at stake before any decisions are made.
New Jersey suffers the nation’s highest property taxes, and they usually increase at least 2% per year – plus whatever it takes to cover certain exempt expenses, like health care and pensions for retired municipal workers.
In Chatham Borough, our property taxes will continue to increase even more than 2% per year unless our Council gets smart, and chooses to spend the millions in revenues expected from River Road for necessities – and easing our tax burden – rather than for luxuries and gifts.
Chatham Borough recently took a fresh look at the market value of taxable real estate in town as of October 1, 2022.
We’ve all seen the results: significant increases in the assessed values the Borough will use to calculate our property taxes.
Will those higher assessed values mean higher property taxes?
Not necessarily. The Borough revaluation shouldn’t increase your property tax bill unless the value of you property has risen faster than the total value of taxable real estate in Chatham Borough – the tax base.
Just fill in Boxes A and B with the values shown in your reassessment letter and last tax bill. The calculator will do the rest, comparing the change in the value of your property with the change in the value of all taxable property in the Borough, and using the estimated new tax rate in Box E – 1.488% – to predict how much your property tax bill will go up or down. The answer will appear in Box H.
Beware: The result you see in Box H paints a rosy and misleading picture.
Your actual tax bill will probably increase a good bit more than the calculator indicates in Box H, because the estimated 1.488% property tax rate shown in Box E is almost certainly too low.
The new tax rate estimate shown in Box E is probably too low, because it does not take into account likely looming increases in this year’s local budgets.
How do we know the new estimated tax rate doesn’t take into account those looming local budget increases? The proof is in last line, below the calculator, where it says the estimated 1.488% tax rate in Box E assumes our Borough and School District budgets will stay at 2022 levels.
Fat chance. Both the Borough Council and the School Board are fixing to increase their spending in ways that will probably mean significantly higher property tax bills all around.
While it’s certainly possible that the Council and School Board really do need more money to fulfill their respective missions, we shouldn’t blindly accept annual tax increases. They should go through normal channels and ask taxpayers for what they need
It’s possible the Borough Council could even REDUCE our property taxes simply by: 1) increasing the tax base (for instance selling excess tax exempt Borough real estate like the Stanley Church); 2) using the proceeds for urgent needs like a new fire truck; 3) using new sources of revenue (like the PILOT payments) for other absolute necessities (like affordable housing at Post Office Plaza); 4) putting off spending on inessentials; and 5) flatly refusing to make outright gifts using taxpayer funds.
Instead, some Council members seem bent on doing just the opposite, which will make your property taxes continue to increase.
For instance, some members of our Council aim to gift a portion of the Borough’s PILOT revenues to the School District.
With so many pressing demands on our Borough funds, you really have to wonder why any Council member would even consider giving away Borough money – especially to an entity like the School District, which already has far greater resources than does the Borough.
The reasons offered for that gift are based on myths:
MYTH: The PILOT payments are “found money” – extra funds for the Council to spend as it pleases.
FACT: The PILOT payments are Borough assets, property of the taxpayers.
We earned that PILOT money by granting the developer a property tax exemption for 30 years. Though the Council is free to spend -or squander – that money on pet projects and discretionary gifts, that isn’t the right thing to do.
The right thing for the Council to do is to use the PILOT money with the same care and discretion they would if the developer were required to pay full property taxes.
If that PILOT money were from normal property taxes, the Council couldn’t spend it on a whim. By law, the Council would get only 102% of what it got last year – plus enough to cover certain exceptional expenses. The Council would be required to use the balance of the funds to lighten our property tax burden.
That is exactly how the Council should use the PILOT money – unless we residents and taxpayers agree otherwise.
MYTH: Right or no right, the School District DESERVES a portion of the River Road PILOT payments, because it would have been entitled to a portion if the Council were collecting real property taxes on the project.
FACT: Even if the River Road developer were paying full property taxes, the School District would NOT be entitled to a portion of the additional property taxes collected.
Why? The School District’s share of our property taxes is NOT based on the amount collected. No matter how much – or little – the Borough collects in property taxes, the School District gets the same amount: 102% of what it got last year, plus enough to cover certain extra expenses. The Borough Council has NO OBLIGATION to give the District any extra property tax funds.
MYTH: Even if the School District isn’t automatically entitled to a portion of the PILOT payments from River Road, it should get a portion, to make up for the additional cost of educating school children who will move into the River Road development.
FACT: The prospect of additional school children does NOT entitle the School District to any additional funding from property taxes
Higher district-wide enrollment might get the School District of the Chathams a little more state aid, but that’s a drop in the bucket, making up only about 5% of our School District’s nearly $85.6 million budget for the current 2022-2023 school year.
Whether school enrollment skyrockets or plummets, the Chatham School District is entitled to the same 102% of what it got from property taxes last year, along with enough money to cover certain exempt expenses.
And in the Chathams, enrollment isn’t increasing. It’s falling. It has been falling for years, and the Superintendent has predicted it will continue to fall until at least 2029.
When even an increase in overall, district-wide enrollment wouldn’t entitle the School District to any additional school property taxes, a few more children in the River Road developmentcannot justify arbitrarily gifting a share of the Borough’s own PILOT revenues.
MYTH: If the Borough doesn’t choose to share its PILOT payments with the School District, our schools will suffer.
FACT: The School District of the Chathams is pretty well insulated from financial pressure. Its budget tops $85 million – more than twice that of the Borough and Township combined – and the District enjoys an absolute right to local property tax funding in the amount of 102% of what it got from Borough and Township property taxes the year before, plus enough to pay certain other expenses, totaling approximately 90% of its annual budget, and our School District also routinely qualifies for state and federal aid.
Is it possible that our School District nonetheless really needs even more local funding than it’s already guaranteed by NJ law. Yes, sure.
For the Borough to simply give away much-needed Borough PILOT money to the School District would be like giving away New Jersey tax dollars to the U.S. Department of Defense – a far bigger entity with its own funding source.
MYTH: Giving PILOT money to the Schoool District would force the developer to pay its fair share of school costs.
FACT:Gifting PILOT money to the District would have NO effect on the developer.
All that gift would do is deprive Borough taxpayers of our chance to use the funds for urgent necessities like a new fire truck – or perhaps a tax break.
There is no justification for the Council to simply gift our PILOT funds to the School District, and darn good reasons not to make such gifts: Not only would it be financially irresponsible, it would also be tantamount to an end run around School District parents and residents. Such gifts would raise the specter of partisan meddling in our schools.
Even a small gift to the School District would establish a dangerous precedent, and the dollar amount could be adjusted upward each year, as former Borough engineer Vince Denave noted at a 2021 Town Hall.
If the Council is considering take such risks, it should explain why – and get the informed consent of residents BEFORE making any decisions.
But so far, the Council seems bent on simply divvying up the taxpayers’ PILOT money in the back room and without public scrutiny.
For instance, they’re prepared to hand over some of the taxpayers’ PILOT money to the School Board.
That would be bad for Chatham Borough and for the School Board.
It would deprive the Borough of funds it needs to meet absolute necessities, like new fire apparatus.
Gifting Borough funds to the School District could leave the School Board beholden to the Council and ensnare our schools in party politics.
Our School Board shouldn’t put itself in that position. The School Board already has ways to get all the money it needs.
Even with declining enrollment, the School Board automatically gets 102% of last year’s budget, plus whatever it takes to meet certain other expenses.
With school parents making up the biggest voting block, the School Board can raise additional funds simply asking the taxpayers to vote on that by the normal, aboveboard process of referendum or second question.
Here’s how Bill Heap explained the issue at the December 12 School Board meeting, at minutes 2:27:29 and 2:50:20:
You think that simply giving PILOT payments to the Board of Ed might reduce our property taxes? No. It wouldn’t reduce our taxes at all.
The Board of Ed would get the PILOT money ON TOP of AT LEAST 102% of last year’s school budget, to which they’re entitled by law.
What’s more, at least half of any PILOT funds given to the schools would, in effect, benefit nearby Chatham Township, though it bears none of the burdens associated with the River Road project.
Bill Heap’s argument against allocating PILOT money to the Chatham schools without public consent has the support of Stewart Carr, a civic-minded, longtime Township resident and registered municipal advisor.
Mr. Carr has urged the Board of Ed to “take the high road and not ask the municipality for extra [PILOT] money, but rather ask the taxpayers directly for that money.”
Check out this clip from the Feb 6 meeting of the BOE, at minute 1:26:31
Chathamites who are in-the-know agree that the Borough Council should not spend the PILOT money without the approval of residents:
Do you approve of the Council’s plans to divvy up the PILOT money without consulting the public?
Would you prefer that the Borough Council let us decide how to use our money – or simply use it to reduce taxes?
Don’t wait until it’s a done deal!
Come to the Borough Council meetings on Feb. 13, and Feb. 27, 2023 at 7:30 PM, Borough Hall, upper level, 54 Fairmount Avenue.
Yesterday morning, after three tense public hearings, Morris County Superior Court Judge Stephan Hansbury soundly rejected the Kushners’ brazen attempt to cram an unpopular 100-rental unit project on mostly public land behind our Main Street Post Office.
That decision frees Chatham Borough to meet part of its affordable housing requirements by building a 15-unit apartment house there, as our Mayor & Council voted on May 2.
For a quick summary, watch the video of Mayor Kobylarz’s comments in this Tap story:
Will the Kushners accept that outcome and let Chatham build some affordable housing at Post Office Plaza, or will they continue to sue, appeal, and otherwise try to block progress? Stay tuned here and at this FB group: