Tag Archives: PILOT paymnets

A slick infomercial for corporate welfare

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Back on September 23, Council President Mathiasen promised to level with residents about the crucial differences between PILOT payments of the kind the Borough gets from the Ivy, and the normal property taxes the rest of us have to pay.

Instead, she used our tax money to hire a slick financial consultant to do an hourlong infomercial for corporate welfare.

That’s the only way to describe her consultant’s presentation at the October 15 Council meeting. He made his best case for continuing to waive property taxes on big, new apartment buildings for decades, so that the Council can get its hands on a cut of the revenues, which they call PILOT payments.

https://chathamborough.granicus.com/MediaPlayer.php?view_id=1&clip_id=298

Those PILOT payments are actually our money. And it’s a lot of money. With the Ivy, for instance, the consultant says the PILOT payments will average $1.7 million per year for three decades. That’s ten percent of the Borough’s current budget, and 13% of the municipal tax levy. 

Does that PILOT revenue reduce the property tax burden on the rest of us, as a new taxable development would? No. The Council can spend it all and go right on raising taxes every year as usual.

In effect, PILOTs take money out of the pockets of the rest of us, by depriving us of the automatic tax break we’d get if the Ivy paid property taxes.

PILOTs also deprive us residents of the right to vote on how to use those extra public funds. 

Ms Mathiasen’s consultant actually touted PILOTs as a way to use public funds for projects that are politically unpopular. Check it out here:

03:00:17 here: https://chathamborough.granicus.com/MediaPlayer.php?view_id=1&clip_id=298

Huh? Why does the consultant think spending taxpayer funds to thwart the wishes of voters is a good thing? 

Now the Mayor & Council are ready to plunge ahead with a second, luxury redevelopment project on River Road –  one that’s twice the size of the Ivy, with 500 apartments, and will require taxpayers to subsidize it with yet another PILOT tax break.

Demand that before taking another step, the Council first:

  1. Identify the alternatives.
  2. Do its due diligence.
  3. Present a timely, thorough matrix, comparing the costs, benefits, and other implications of that 500-unit PILOT project with other alternatives, including the normal, wait-and-see approach.
  4. Hold a timely, robust public discussion.

“By using PILOT agreements, local governments can essentially raise revenue and finance public services in ways that sidestep the constraints of tax caps or spending limitations.”

– Chat GPT

Take the high road

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The Chatham Borough Council is drooling over the prospect of getting millions in PILOT revenue from the massive, 259-unit rental housing project under construction on River Road.

Those PILOT revenues rightfully belong to the taxpayers of Chatham Borough.

Our Borough Council should use the taxpayers’ PILOT money to lighten our tax burden, not to wield more power.

If the River Road project were subject to regular property taxes, it would increase the Borough’s tax base, possibly reducing our property taxes.

But the BOE wouldn’t get any of that additional tax revenue – not unless the taxpayers voted to give it to them.

That’s exactly what the Council should do with the PILOT payments.

Instead, the Borough Council is negotiating to allocate some of the PILOT money outside normal channels and without public scrutiny or consent.

That prospect doesn’t sit well with longtime Borough resident Bill Heap, a respected Planning Board member and successful businessman.

“PILOT money is our money, and you have an obligation to be transparent,” Mr. Heap told the Borough Council on Jan 23, urging them to run the decision by voters, at minute 36:05: https://chathamborough.granicus.com/MediaPlayer.php?view_id=1&clip_id=106

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.

Also tell the Mayor & Council here: https://chathamborough.org/government/mayor

Tell the School Board here: https://www.chatham-nj.org/page/63