South Orange-Maplewood Board of Ed Discusses Asking Towns for PILOT Money

by The Village Green
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As the South Orange-Maplewood Board of Education looks at producing a 2015/16 school district budget, Board members discussed approaching the local municipal governments of South Orange and Maplewood and asking them to make contributions from PILOTs contributed by housing developers.

On Monday night, Business Administrator Cheryl Schneider reiterated comments that increasing enrollment was putting pressure on expenses, particularly staffing, and making it difficult to bring the budget in under the state-mandated 2% cap.

Schneider said that the South Orange-Maplewood Board of Education will be looking at passing a budget of $122,264,211 for 2015/16 with $108,694,377 coming from the local tax levy.

As part of that revenue, the district is projecting that $4.075 million will come from the State of New Jersey in the form of state aid. State aid notices will be sent to school districts throughout the state later today.

Schneider noted that 94% of revenue comes from local tax payers, with about 3% from state aid 3%, and another 3% from state and federal programs.

The South Orange-Maplewood School District is looking to have the budget to Essex County by March 16, after community workshops and hearings on March 4 and 12.

Schneider noted that proposed staffing in the budget is mainly flat despite significant increases in enrollment. “It’s getting more and more difficult” to manage with the staffing levels and to “find efficiencies,” said Schneider.

She said that district staff were considering asking the Board to go above the 2% cap to get another $300,000 — depending on the state aid announcement. She said that the district has banked cap of $1,886,183 that it can use. Schneider explained that “banked cap” does not signify money in the bank but rather “banked in terms of taxing authority.” Basically, banked cap means that the board can go above the 2% cap to capture more tax revenue up to the banked amount.

Board member Beth Daugherty said she was “very wary” about going over the 2% tax increase. Instead, she proposed going to the town governments in South Orange and Maplewood and proposing that they contribute an amount from the PILOTs that they had awarded various developers. (PILOTs are “payments in lieu of taxes” negotiated to incentivize development. Municipalities see annual payments in such arrangements, but school districts do not.)

Daugherty said that she also wanted the district administration to prepare a report that shows the number of students per residential development in South Orange and Maplewood coupled with an indication of whether the properties are paying a PILOT vs. being on the tax rolls.

Daugherty noted that the towns had been awarding PILOTs to large housing developments “always with the idea that they will bring in a minimal number of students” but, said Daugherty, the developments “do bring in students.” Daugherty said she realized that the new developments were not responsible for all the increases in enrollment “but they do contribute.”

She said that the data gathered would be used to show the towns how many students over recent years live in the new developments and to make a request that they redirect a portion of PILOT payments to the school district to help offset the costs of growing enrollment. (For safety reasons, said Daugherty, only the total number of students in developments by town, not by development, will be shared publicly.)

Board members Maureen Jones, Madhu Pai, Jeff Bennett, and Elizabeth Baker voiced support for the idea.

Pai said, “We need to broaden our tax base” irrespective of the number of students in the new buildings. Pai said that Daugherty’s idea was “one way to do that; not the best.”

Bennett said he agreed with Daugherty and would also would like to know the future tax benefits expected from those properties. He said he also thought that the Board could go over the 2% cap in light of the fact of the improving economy. Bennett said he felt it was important to “show to our staff that we recognize all the work they are doing to handle increased class sizes.”

Baker agreed with Daugherty about procuring data: “We’ve been talking about this but without actually having the data…. With numbers as grim as these numbers are … we really have to look at all potential revenue sources.” Baker said that the district can’t just keep cutting expenses but needs to grow revenue.

A lone but vociferously dissenting voice was Board member Johanna Wright. “We’re wasting a lot of money on the initiatives that we have,” said Wright, naming IB and the hiring of consultants. “It’s not about the money, it’s how we spend the money that we have.” Wright noted that the Westfield school district’s budget is $20 million less than South Orange-Maplewood’s budget. She said that “trying to take money from the PILOTs which have been used to defray our taxes in the first place…. it just doesn’t make sense to me.”

Jones said, “I’m also in support of talking to the two municipalities. While we have to be fiscally responsible, we also have to look at how our district can grow the tax base as well.”

Board President Wayne Eastman clarified with Schneider that the PILOT money does not directly take dollars out of the district’s coffers; rather it reduces the potential tax ratable base across which the district’s tax levy is spread.

“This is a little bit complicated,” said Eastman.

“You think?” said Wright.


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