A special meeting is scheduled to be held on Thursday, January 10, 2019, to have the municipality’s professional give a presentation to members of the public on Payment In Lieu Of Taxes, also known as PILOT, agreements.
Payment In Lieu Of Taxes, or PILOT as it is more commonly known, is important to a municipality, a school district, and ultimately taxpayers. The program was created to provide an incentive for investors and developers to build on otherwise vacant or underutilized areas of a municipality by offering to have the property owner make payments over a period – up to 30 years – that end up being less than if they paid property taxes straight out. The payment is based on revenues every year which is based on occupancy. In other words, if an apartment complex has fewer people living in it, it pays less of a PILOT. This is a benefit to a town government because 95% of the improvements part of property taxes goes to the municipality while 5% goes to the county. None of that money goes to a school district. While the school board does receive funds from the land portion of property taxes, it is significantly less than it would receive if it collected what averages out to be around 55% of property taxes.
School districts do get taxes from the land portion of property taxes; only the improvement portion of property tax has PILOT applied to it. Between 50% and 55% of the land portion of taxes will still go to schools.
There has been criticism of the program especially when it relates to residential development since school-age children from an apartment complex that has PILOT might end up attending local public schools but would not be paid for any increase in the student population through school taxes.
The meeting will also have a question & answer period to allow those in attendance to ask questions, provide input, and comment on PILOT and development.
The information session will start at 7 p.m. in council chambers of the Roselle Park Municipal Complex located at 110 East Westfield Avenue.