It seems that citizens all over New Jersey are having contentious debates with their elected officials about residential overdevelopment, overcrowding of local schools, and questionable tax abatement / PILOT agreements for developers.
In 2008, New Jersey state comptroller Matthew Boxer published a scathing investigative report on how the redevelopment and tax abatement process works in New Jersey, how there is a glaring lack of oversight in place, and how (when misapplied) they unfairly benefit both developers and municipal governments, all at your expense. Not surprisingly, nothing has changed since Boxer called attention to municipal tax abatement abuse, so the information is still compelling and invaluable. A former federal prosecutor and seasoned trial lawyer, Boxer’s reputation and integrity are impeccable.
In local government watchdog circles, this document is known as “The Boxer Report”. This is the only tool you need to understand how PILOT agreements work, and how abuse of the abatement process and “sweetheart deals” for developers have a direct financial impact on taxpayers and our school districts.
A key point to understand is that 95% of the PILOT revenue goes to the municipality and 5% goes to the county. What seems to be left out of explanations by local government, rather conveniently, is that your school district receives no portion of that PILOT revenue, yet the schools must sustain increased student enrollment from the new apartments and residential housing being built in your town. As a result, the tax levy must be increased to compensate and pay for the public education of each child annually.
In the Scotch Plains-Fanwood school district for example, that’s approximately $23,250 per student, each year (updated 2026). That cost falls on your shoulders…not the developers who build the apartments in the first place.
The Boxer Report also illustrates how municipalities actually have a financial incentive to give out significant tax breaks to developers that deprive our school districts of revenue and unfairly shift the tax burden onto taxpayers, in a process that is highly susceptible to corruption and cronyism, and far from transparent for the citizens who are negatively impacted by these agreements.
Redevelopment and tax abatements are intended to spur development in areas where it would not otherwise occur under normal market forces.
If the property in question is not in a distressed area and not “blighted” in any conventional way, then most often, redevelopment that includes a PILOT is wrong for the taxpayers of that community who derive no benefit, yet must live daily with the consequences of an increasing population, both on their streets and in their local school district.
If you’re trying to understand how this works and how it affects your property taxes, I urge you to grab a highlighter pen, take an hour or two, and read this report thoroughly. It’s written to be an easy read for anyone.
With this report in your arsenal, you will have all the knowledge you need to pose hard questions to the elected officials and governing bodies of your town, and hold them accountable for the decisions they make at your expense.
No one is looking out for us, so we need to look out for each other. We hope you find this information valuable.
Download Links
In case the official url on NJ.gov ever changes, a backup link to the PDF document on cloud storage is also provided by clicking the image below:
https://www.nj.gov/comptroller/news/docs/tax_abatement_report.pdf
