Princeton University’s “Pilot Plus” Arrangement

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fountain at Princeton

April 24, 2014; Planet Princeton

A seven-year agreement for a payment-in-lieu-of-taxes (PILOT) program was posted yesterday on the websites both of Princeton (the town) and Princeton (the University). Its payment to the town is scheduled to be $2.75 million in 2014, and thereafter it will increase by four percent each year.

Then comes a Christmas list of other stuff:

  • $90,000 for the purchase of a new Free-B vehicle
  • $250,000 toward construction of a new storage facility for the town’s department of public works equipment
  • $500,000 toward construction of a new Princeton First Aid and Rescue Squad facility on municipal land
  • $250,000 toward the expansion of the Witherspoon Fire Station (in addition to $300,000 already committed to this project under a prior agreement)
  • $500,000 toward the purchase of fire-fighting apparatus

The university also pays into the town by leaving certain properties on the tax rolls. This was estimated to be worth almost $3 million in 2013, with $659,000 going to the town of Princeton and $1.43 million going to the Princeton Public Schools. The university intends to continue this practice, according to the agreement.

There is more to it, and it can be seen in full by using the link. Those who worked on the agreement said that they “hope that it will provide a useful model for similar discussions between other communities and universities about their contributions.”—Ruth McCambridge


  • Bert T, Edwards, CPA, CGFM, CGMA

    This settlement reflects a reasonable resolution of a growing movement to have higher ed institutions pay for at least some of the services that the local (sometimes county) provides – I see that Princeton is particularly interested in fire protection, wnich i assume is needed to keep fire insurance lower. This was a major issue several years ago when the local county wanted to tax Washington and Jefferson College on the basis that, by charging tuition, it was not a charity. W+J was and is not as well off financially as Princeton and successfully was able top continue its tax exemption.

    The precedent here is that, if this taxation/PILOT becomes instituted throughout the country, a number of colleges, which are already struggling with enrollment declines and stricter elegability standards for Federal assistance on grants and loans to students, a number of institutions will go bankrupt. So far this year about 10 small colleges have closed. When this happens, the college staff, who frequently are housed in above-average homes will decamp and severe real estate tax losses will occur since there is no way to transfer ownership of these homes; additionally, local businesses supplying the college – food, office suplies, utilities, restaurants, motels, etc. – suffer, causing additional economic losses.

    The US Government does follow PILOTs in areas where land ownership by the US Government is significant (National Parks, Fish and Wildlife locations, military bases, Interior Bureau of Reclamation and Bureau of Land Management locations, etc.). I understand that the United Methodist Church encourages its local clngregations to make something like a PILOT in recognition of the need for fire and police protection, police assistance for events like funerals, weddings, etc., and other services of the local government.