On Monday (November 10) the Senate Community and Urbans Affairs committee will be considering legislation that would require municipalities to share certain payments in lieu of taxes with school districts and informs counties, school districts and Department of Community Affairs of certain information related to property tax exemption and abatements. The League strongly opposes S-3915, due to the likely adverse impact on economic development.
The reallocation of PILOT payments will require an increase in total PILOT payments so that the municipality, which provides the bulk of public services, can maintain services. Not only will this be an administrative challenge it will also have a critical adverse impact on the economics of redevelopment projects, and especially those projects which require greater assistance due to environmental contamination, site conditions or extreme blight, or which have smaller returns, for example, the construction of affordable housing. In authorizing PILOT agreements, municipalities determine that a project would not be built without the PILOT. A significant increase in the amount of PILOT a project pays reduces the possibility that the project will be built at all.
While we do anticipate that the bill will be amended during committee, we are concerned that the provisions of S-3915 will significantly weaken the ability of municipalities to spur redevelopment in blighted areas through the use of PILOTs.
Payments in lieu of taxes (PILOTs) are the single most powerful tool available to municipalities to encourage businesses and developers to make improvements to property or to locate a project in a distressed or blighted area.
Please reach out to your Senator and urge them to vote “no” on S-3915.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.