PILOT Proposals Spreading to More Affluent Suburbs

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August 1, 2012; Source: Lawrence Ledger

The urbanized Northeast is clearly rumbling with municipalities looking to get revenues from tax-exempt property owners. Lawrence Township is a reasonably prosperous suburb of New Jersey’s less than affluent capitol of Trenton. Nonetheless, the Township Council has asked more than 50 nonprofit property owners of 90 parcels to send in voluntary contributions amounting to one-fourth of their hypothetical municipal tax bills (the properties are assessed at $287.6 million and, if fully taxed, would generate $2.5 million in revenues).

What prompted this? The township manager told the township council, as paraphrased by the Lawrence Ledger, “that the issue of tax-exempt organizations and their lack of property tax payments from them was mentioned by three township residents who volunteered to review the proposed 2012 municipal budget.” Three! How about that, fans! Is this a well-thought-out municipal revenue strategy or the Township Council’s pandering to typically aggrieved homeowners?

Among the groups receiving letters from the Council are Rider University, religious groups, group homes for the disabled, affordable housing developments, American Legion and VFW posts, the Lawrence Township Educational Foundation, New Jersey’s Special Olympics, and the local Babe Ruth League. If there’s anything to say about the Township’s approach, it’s obvious that the Township is pretty ecumenical in its definition of tax-exempts that might want to make some payments.

The coverage of this event in the Trenton Times puts the word “voluntarily” in quotation marks, suggesting that when a property owner spurns this kind of request from the local government, even if the request is clearly not mandatory, there are potential consequences. As Linda Czipo, the executive director of the New Jersey Center for Nonprofits pointed out, “Quite honestly, some communications look a whole lot more optional than others.”

What the Lawrence Township story should tell NPQ Newswire readers is, at a minimum, two things. First, the PILOT issue is metastasizing outside of the big Northeastern cities to much more affluent suburbs. Two, that municipalities seem to be willing to generate “voluntary” PILOT programs based on little more than trying to appease homeowners who get taxed and who vote.—Rick Cohen