As part of the 2015/16 school district budget process, South Orange-Maplewood Board of Education members discussed requesting that the local municipal governments of South Orange and Maplewood make contributions from housing development PILOTs.
Towns negotiate PILOTs (payments in lieu of taxes) with developers to encourage development. Often after 5, 10 or 20 years, the PILOTs ramp to a full property tax rate. Municipalities receive annual payments in such arrangements, but school districts don’t.
Members of the Board of Ed say that increasing enrollment from the developments puts pressure on expenses, particularly staffing, and makes it difficult to budget under the state-mandated 2% cap.
Board member, Beth Daugherty said that she wanted the district administration to prepare a report that shows the number of students per residential development in South Orange and Maplewood and whether those properties are paying a PILOT vs. being on the tax rolls. Many Board members have stated that they really have to look at all potential revenue sources and not just keep cutting expenses to balance their budgets.