Share PILOT Money With Schools, Montclair Residents Demand (VIDEO)

MONTCLAIR, NJ — It wasn’t on the agenda. But that didn’t stop students and residents from showing up at this week’s Montclair Township Council meeting with a firm demand: send some PILOT revenue to the public school district.

Last month, the Montclair Board of Education voted to approve the 2023-2024 school budget. It included budget cuts that will leave dozens of teachers and paraprofessionals without jobs.

The decision inspired a backlash from the local teachers union, the Montclair Education Association. It also spurred a walkout from students at the high school in protest of the budget cuts. Read More: Montclair Students Protest Teacher Cuts In School Budget (VIDEO)

Since then, some community members and elected officials have been probing the possibility of using some of the revenue from payment in lieu of tax agreements (PILOTs) – most of which normally goes to the township – to help the school district cope with rising costs in the future.

Their campaign continued on Tuesday evening, when a crowd of people gathered outside the municipal building before the council meeting. The protesters – who included dozens of parents and students – held up signs that read “Save Our Schools” and “PILOTs For Schools Now.”

During the public comment portion of the meeting, multiple students spoke in support of some of their favorite teachers, who will be departing the district next year due to the budget cuts. Watch footage from the meeting below (video is cued to public comment).

Article continues below

PILOT agreements, also known as municipal tax abatements, are deals that enables a developer to switch their standard tax payments for a property with a fixed, yearly payment to the municipality. Some municipal officials have called them useful tools to attract development to distressed or blighted areas of town. But their use has drawn criticism from opponents, some who caution that the deals can enable a big developer to skip out on paying their fair portion of property taxes.

Nearly 2,000 people have signed an online petition titled “Rescue Montclair Public Schools” which argues for using PILOT funds to fuel local schools.

“Year after year, Montclair Public Schools have been faced with a deficit in the district’s budget, leading to mass teacher layoffs, and instability in the lives of our teachers and children,” the petition reads. “Our schools are funded over 90% by taxes, and we have a 2% cap on how much the taxes can increase each year. In addition, we are considered a wealthy district, so our state aid is negligible. Because our costs increase by more than 2% annually, we are forced to make painful staff and program cuts every year.”

The status quo is not sustainable, the petition says. It continues:

“As Montclair continues to build luxury apartments that do not pay school taxes because they pay PILOTs (payments in lieu of taxes), we must ensure schools receive a fair share of these payments, which are outside the 2% cap because they are considered non-tax revenue. Currently, the municipality keeps 95%, sends 5% to the county, and NOTHING to the schools. Not sharing PILOTs breaks our social contract: everyone in the community supports public schools at a level proportional to their property value. The wealthiest property owners in our town are getting huge property tax discounts through sweetheart PILOT agreements. Thus, instead of sharing revenue with the schools, the township gives tax breaks to wealthy developers.”

NO VOTE ON PROPOSED RESOLUTION

Councilman Bob Russo tried to introduce a resolution on Tuesday that would authorize the township to redirect cannabis sales and revenue from PILOTs to the school district, according to what they’d be assessed if no special tax agreement were in place.

Russo said he wants $3 million in PILOT funds to be dedicated to public schools moving forward – something other New Jersey towns have done in the past. He’s also recommending that $500,000 in PILOT funds be diverted for the town’s senior services budget.

“Our youngest and oldest residents should share in the PILOT funds which subsidize needed developments,” Russo said prior to this week’s council meeting. “Let's take care of our senior population and our youth in our schools as first priority, not spend so much of our budget on administrative, management and outside legal consultants.”

A vote was never taken on Russo’s proposed resolution.

COUNCILMAN: ‘THIS WILL TAKE TIME’

Prior to Tuesday’s meeting, Councilman Peter Yacobellis said he remains concerned about the school district’s recent budget process.

“I disagree with the district's decision not to pursue the health care cost exemption as well as the decision not to ask voters for permission to exceed the 2% cap,” Yacobellis said. “But I also respect that they had made a promise to the community that they wanted to keep and I didn't mean to question the integrity of the process and certainly not any individual's contribution to it.”

Yacobellis said he follows three guiding principles when it comes to school funding:

• “Take no action to harm to the township's exceptionally rare AAA bond rating”
• “Collaborate with the school district in every way possible, believing that the fate of our town intrinsically inked to the success of our public schools”
• “Revisit the approach to PILOTs both in terms of updating the guidelines and ensuring they are more beneficial than general taxation - and - in ensuring that our schools are receiving enough of the overall taxation pie to fund their needs”

The councilman acknowledged the frustration felt by many residents, students and parents in the township over the school budget cuts and funding. He wrote:

“I’m in receipt of correspondence from many of you and I hear you. We needed to pass the budget in May. We have a town to run, a credit rating to maintain and all constituencies and services to consider. We cannot be a government and I will not be a leader who reacts to the heat of the moment. We must establish or revisit certain principles and take action to shift our prioritization and spending to reflect those principles. We also most look to collaborate on shared services with the district, work together on going for grants and advocating for more state aid. We can't do that in a night or even a month. This will take time.”

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site. Don’t forget to visit the Patch Montclair Facebook page.