While you were relaxing on LBI, our walkable little Borough was changing into to a less attractive place, with motor bikes on crowded sidewalks and higher property taxes for all.
“Higher taxes?” you may wonder. “How could the Council raise our taxes in the middle of the summer? Did they do that to pay for the new fire trucks we so desperately need?”
Nope. The. Council used a taxpayer asset to make an outright gift, depriving Borough taxpayers of an automatic tax break, and the chance to choose to use those funds for some urgent municipal need, like new fire trucks.
It was not consensual. How did that happen? Here’s how:
Given certain caps on local taxes and spending, the Borough Council’s annual budget is only about $17 million. All other things being equal, a new, taxable development automatically triggers a little more revenue to the Borough, along with lower property taxes for all of us, unless residents vote to spend more instead.
But the Council can take away our right to that tax break, and free up far more spending money for itself, far above the normal limits, simply by designating the new development exempt from property taxes, and allowing the developer to pay smaller, negotiated amounts known as PILOTs.
PILOT payments aren’t subject to the normal spending limits, and the Borough Council isn’t required to share the PILOT money with residents in the form of lower taxes. The Council doesn’t even need to ask voters before spending the PILOT money.
WIth a PILOT, the Council can simply plunge ahead and spend 95% of the revenue however the Council members please. They can spend it on urgent necessities like fire trucks. They can spend it on luxurious pet projects like the Stanley church. They can even spend all the PILOT money on outright gifts, and still go right on increasing the Borough budget and raising our taxes every year.
That’s exactly what the Council did at its August 12 meeting. The Council voted to give part of the Ivy PILOT payments to the Joint School District of the Chathams, a separate entity with its own $90 million budget and its own sources of funds, to cover expenses that would otherwise be shared with Chatham Township. That’s a gift.
That gift would be acceptable if the Borough Council had made it with the informed consent of Borough residents, for instance if residents had voted for it. But in this case, the Council approved the gift on the spot, the same night the public learned about it.
Why would the Council make such a gift when the Borough is in desperate need of at least two fire trucks, according to the experts the Council paid $18 thousand to evaluate the situation? Ask the Council members.
Won’t that gift help curb our school taxes? Not one bit. The School District is still legally entitled to the same annual increase in its share of our property taxes, which taxpayers had already voted to increase permanently in 2023. https://www.tapinto.net/towns/chatham/articles/vote-no-on-public-question-1-which-will-permanently-raise-property-taxes-for-an-expenditure-already-in-the-school-district-budget
In fact, the effect of that gift is to raise the school tax burden on the Borough, because it’s on top of the Borough’s fair share of the cost of running the schools as determined by a longstanding formula.
https://chathamchoice.org/2023/06/why-should-chatham-borough-pay-more-than-its-fair-share/
Isn’t the Township also kicking in more money to the School District? No.
Most of the members of the Township Committee are too smart to throw away assets as the Borough Council has, done, if only for fear of getting voted out of office. Instead of giving more than its fair share to the School District, the Township Committee is buying TWO new fire trucks right away, to save money.
Why didn’t the Council ask us first? Good questions for the Borough Council.
https://chathamchoice.org/2023/06/why-should-chatham-borough-pay-more-than-its-fair-share/
Will Borough voters ever wise up and rein in Council abuse of our PILOT funds? You tell me.
See for yourself at 2:55 here: https://chathamborough.granicus.com/MediaPlayer.php?view_id=1&clip_id=263