Trenton – Legislation sponsored by Senate Community and Urban Affairs Committee Chair Troy Singleton, which would require municipalities to share certain payments received in lieu of property taxes (PILOTs) with school districts, cleared the Senate Community and Urban Affairs Committee today.
“Good schools are an important part of a good community,” said Senator Singleton (D-Burlington). “Municipalities should share PILOT funds with schools so they can improve the quality of education for students.”
The bill, S-59, would require municipalities to share certain payments received in lieu of property taxes for urban renewal entities with school districts and to inform counties and school districts of property tax exemption applications.
Under the bill, urban renewal entities that submit an application for a long term tax exemption to a municipality would also be required to provide copies of the application to the municipality’s board of chosen freeholders, the chief executive officer of the county the municipality is located in, the board of education and the superintendent of any school district located in the municipality for informational purposes.
Current law entitles municipalities and counties to collect a portion of PILOT revenue. The revenue gained from PILOT agreements is distributed so that 95 percent goes to the municipality and 5 percent to the county; therefore none of the PILOT revenue is distributed to the school district. This bill seeks to create transparency among municipalities, counties, and school districts and also ensure that school districts receive a portion of PILOT payments as they continue to face budget constraints.
“Urban renewal entity” is defined as a limited-dividend entity, the New Jersey Economic Development Authority or a nonprofit entity that enters into a financial agreement with a municipality to undertake a project that is a part of its redevelopment plan.
The bill was released from committee by a vote of 5-0.