To the Editor:
Most PILOTs in Hopewell Township ( payments- in- lieu- of- taxes) are tax exemptions granted to residential developments. Unintended effects and negative consequences can result from such abatements. How is the Hopewell Valley School District and the students and families they serve affected by these abatements?
1. The school district receives no share of the payments made by the developer to the Township.
Instead of regular or conventional property taxes, tax-abatement projects such as Hopewell Parc on Scotch Road ( 1077 units ), The Collection by Shop-Rite ( 379 units ), The Heritage on Route 31 ( 67 units ) and 100 Forge on Federal City Road ( 300 units )require the developer to make payments to Hopewell Township. The township keeps 95% of the revenue and Mercer County receives 5%. The school district receives nothing.
2.Funding for the annual cost to educated all students is impacted.
These four current PILOT developments have created over 1,800 new housing units in a township that had about 6,500 housing units in 2023. The township provides no revenue to our school district for the annual expenses to educate the children from these developments. The township receives greater funds while the school district absorbs the costs. The consequences are programs are cut, class sizes increase, instructional materials can’t be purchased, fees are charged for participation in programs and additional referendums will be needed for future expansions and new buildings.
3. Tax exemption programs like PILOTs shift the burden of supporting our schools to those residents who pay taxes conventionally.
The current township committee has stated that the presence of a PILOT has no bearing on a school district budget and the amount of funding the schools receive but that is because PILOTs shift the burden of these development deals on to the regional taxpayers who pay their taxes in the conventional manner . In Hopewell Township, conventional taxpayers support our schools with about 57% of their tax bill. The revenue amounts forgiven or abated by PILOTs must be effectively recouped from other taxpayers and remitted to the school district. If selected properties are exempt from taxes then any revenue necessary to support our schools must be obtained from the remaining tax base. It is a zero-sum equation.
4. PILOTs require our district to negotiate with the Township Committee to receive any tax-payer funds.
Conventional property taxes designated to support our schools are determined by the municipal property tax assessment and collection process. It is mathematical. But with a PILOT, since the school district receives no revenue directly they must ask and negotiate with the township committee for funds. These negotiations take time and cost money, create stress and are an unnecessary burden and distraction on our school administrators and members of the Board of Education. The $20.7 million shared services agreement to fund the Bear Tavern expansion project took months to negotiate and faced legal challenges from Pennington and Hopewell Boroughs. Layers of bureaucracy complicate the property tax process.
5.The five member township committee unilaterally controls millions of unrestricted revenue from PILOTs.
If the committee agrees to share some of the revenue it receives from PILOT payments with the school district it also controls how much it will share and when and where the monies will be spent- not the school district. For example, the exemption granted by the township to Lennar for Hopewell Parc removed over $332 million in assessed value from its tax rolls which artificially lowered its share of school costs. Yet it will collect over $387 million in unrestricted PILOT revenue over the next 30 years.
Candidates for Hopewell Township Committee Steven Niederer and John Hart understand that PILOT abatements create tax inequalities , lost revenue to our school district and bureaucratic complexity. They support responsible development that preserves the township’s rural character and they believe that a fair percentage of PILOT revenue should be provided annually and unrestricted to our schools.
Exemption from taxation is a departure from the principle that everyone should bear his just and fair share of the tax burden. PILOTs threaten the shared responsibility for school funding that is the foundation of a regional school district like Hopewell.
Vote for John Hart and Steven Niederer for Hopewell Township Committee.
Sincerely,
Sylvia Kocses
Pennington
