This is an educational article about PILOTs on Facebook by a user named Joey Novick which was posted on a Hunterdon County community page. It is reposted here so that the link can be shared with people who are not on FB.
PILOTs are killing EVERY town in Hunterdon and nobody gives a damn.
I sat on the Flemington Borough Council for 15 years. And I probably voted for these. Sorry. My bad. But now I’ve come to understand what strings are solidly attached. For years.
Let me explain this to you. New Jersey has the highest property taxes in the entire country. Not second highest. Not “up there.” Number one. Dead last. We’re talking people in Montclair, Mendham and Millburn paying more money in property taxes than some people’s entire salary. And yet, somehow, some way, the geniuses running our municipalities decided the answer to all our problems was to let developers pay less. Way less. For decades. Through a PILOT— Payment In Lieu Of Taxes.
A PILOT. Sounds nice, right? Sounds like someone’s flying the plane. Through the beautiful blue cloudless sky. Up there with the birds where we can see the colorful trees and snow covered mountain tops. BUT—-Nobody’s flying the plane. The plane is in a downward spiral over the Meadowlands and they’re serving us pretzels.
Here’s how it works. A developer — let’s call him a guy from out of state who’s never been to the Jersey Shore listen to Springsteen, eaten really good pizza in his life — comes to your town council and says, “I want to build luxury apartments here.”
The Council, thrilled that something is happening in the old strip mall that used to be a barber shop and video rental store, shouts, “Fantastic! And hey, instead of paying your full property taxes, how about you pay us a negotiated flat fee for thirty years?” Thirty years. Most marriages don’t last thirty years. The Nets couldn’t stay in New Jersey thirty years. But this deal? This deal sticks.
And here’s what makes it completely insane: under a PILOT, the payment goes to the municipality. Not the county. Not the school district. Just the town. So you’ve got this gleaming new apartment complex full of families — families with kids — and the school district gets nothing. Zero. Zip. Bupkis.
The kids show up on the first day of school and the district is sitting there going, “Where’s our money?” And the answer is, “Sorry, there’s a PILOT.” That’s it. That’s the answer. The school district, which is legally required to educate every single child in those apartments, gets absolutely no additional revenue.
Meanwhile, over in Flemington, or Freehold, or Philipsburg or wherever this is happening, your regular homeowner is still getting hammered. You know who doesn’t get a PILOT? The guy on Route 31 who’s owned his house since 1987 and is paying twelve grand a year in property taxes on a split-level with a broken hot tub. He gets no deal. He pays full freight. Every year. While the luxury apartment complex down the road is locked into a sweetheart payment that was negotiated when interest rates were different, property values were different, and the whole calculation of what the town actually needs has changed completely. But the deal’s the deal, and the town is stuck with it.
Newark has been doing this for years. Big developers come in, get enormous PILOTs, build stuff that drives up demand, drives up rents, and then the city wakes up twenty-five years later wondering why the schools are broke and the roads look like the surface of the moon. Camden. Trenton. Atlantic City — and Atlantic City can’t catch a break on anything, so of course they’re getting shafted on this too.
The argument for PILOTs is always that it “incentivizes development” and brings in “ratables.” Ratables! That’s the word. Like it’s a good thing. But if the ratable doesn’t pay its fair share, it’s not a ratable, it’s a liability in a nice jacket. You’re adding population, adding demand for services, adding kids to schools, adding cars to roads — and the tax base doesn’t keep up because you froze the payment thirty years ago.
And renegotiating? Good luck. These things are locked in tighter than the line at the Tick Tock Diner on a Sunday morning. The developer has lawyers. The town has a part-time attorney who also does real estate closings in Bridgewater. You do the math.
The bottom line is this: New Jersey already has a structural property tax problem that has never been solved, and PILOTs are making it worse. They shift the burden onto existing homeowners and away from the new development that’s actually driving demand. They starve school districts. They create a two-tiered system where connected developers get breaks that regular people never see.
Your town deserves better than a deal that sounds good at a ribbon cutting and costs you for the next three decades. Somebody wake up the PILOT. The plane is going down.
The original post is here:
PILOTs are for Planes, Not New Jersey Towns