Can you clarify how the "wealthy landlords" impact the PILOT fund allocation? The reason I ask is to help identify where the problem is. Specifically, is this issue with the town misallocating funds or some other issue.
We can deal with the issues of "wealthy landlords" and preferential treatment in a separate thread if appropriate. Looking to make this issue more bite-sized and manageable. The cleaner we identify root causes, the more likely we can get support and resolve it.
I'm sorry for the delay responding. PILOTs represent tax breaks for large property owners (wealthy landlords). Specifically, large landlords with PILOTs for non-affordable properties receive an average tax break of 24% relative to what they would pay in conventional taxes. Since these property owners pay PILOTs, they don't pay school taxes. These are not separate problems. They are one and the same.
The schools will have to become more efficient or raise taxes. Probably a bit of both. They also need long-term strategic planning to adapt to smaller enrollments because the school-age population isn't growing and our ridiculously high home prices mean that the share of families that can afford to choose private schools is increasing. I hope that, once freed from the distraction of annual cuts, our BoE, administrators, and unions will manage to collaborate and plan for a smaller district.
1) Elsewhere, you mentioned that people may disagree about whether or not to take the 1.1 million cap adjustment - do you know why? I simply don't know the pros/cons of taking it versus not taking it.
2) Do you know the reasoning why the tax increase from the referendum was less than estimated? I know the bonds got issued at a lower coupon rate then expected, so the debt servicing would be less - but is there a reason the tax increase couldn't have been for the published amount?
I'm sorry again that I am slow to monitor comments. Many reasonable people believe the schools should have taken the healthcare exception. It was available and it would not have required a ballot referendum. Many parents I have spoken with agree, and so does the MEA. However, our BoE and administrators have held multiple discussions with seniors and other residents where they promised that, should the bond referendum passed, they would not go beyond the 2% tax levy cap. I respect their decision because I recognize that it's very important that they keep their promises. They will eventually be forced to ask voters to allow them to grow the tax levy beyond the cap, so they must earn the community's trust to be successful.
So, to answer your second question: yes, the bond interest was lower than expected and that reduced the amount our taxes increased (see: https://montclairlocal.news/montclair-taxpayers-to-save-5m-on-school-distircts-referendum-work/). Specifically, the average Montclair taxpayer will pay $199 more for the first year and $209 more for the second year, which is $108 less than expected.
Thanks. The second question still hasn't been fully answered.
I get that the rate on the bond was lower than needed (good!) And that makes the debt servicing cost less (good!).
Knowing that the town voted expecting taxes to be raised a certain amount, is there a reason why taxes weren't raised as much? It may be something as simple as "you legally can't charge more than the amount of interest". But if the reason was "we could have, but wanted to keep the tax bill low", doesn't that seem short sighted now considering the shortfall (And again, this may be irrelevant if the answer is they raised taxes legally as much as they could considering the rate of the sale).
Also, your kiddo was adorable at the last meeting!
Is there a way to break out the number of students from AH buildings with pilots vs luxury buildings with pilots? It would help rebut folks who claim upscale developments have no impact on our schools...
It's possible and we can ask the district if they are willing to provide two numbers, for affordable and non-affordable without identifying the number of students per building.
I'd imagine that might be hard to do, as some of the housing in the luxury buildings is affordable housing (a certain percentage). Living in a "luxury" building doesn't necessarily signal what you'd think.
If there are significant #s of school children coming from, say, Sienna vs from Elm then that does signal something... at the very least, it informs the #s plugged in for school impact (which ARE based on AH vs not AH, and on income tiers).
11 Elm has 14 units all affordable. Union Gardens has 87 units, all affordable. Siena has 101 units, with 10 affordable. Valley and Bloom has 258 units, with 26 affordable. Based on the models developers (and the town) use to calculate school children per unit, we should see SIGNIFICANTLY fewer children from V&B and Siena than we do from Union Gardens - even the V&B and Siena have more units.
Well said!!
Thank you, Beth! I hope we can spread this post very widely before the next council meeting, on June 13.
Can you clarify how the "wealthy landlords" impact the PILOT fund allocation? The reason I ask is to help identify where the problem is. Specifically, is this issue with the town misallocating funds or some other issue.
We can deal with the issues of "wealthy landlords" and preferential treatment in a separate thread if appropriate. Looking to make this issue more bite-sized and manageable. The cleaner we identify root causes, the more likely we can get support and resolve it.
Thanks for the write-up to bring awareness.👍
I'm sorry for the delay responding. PILOTs represent tax breaks for large property owners (wealthy landlords). Specifically, large landlords with PILOTs for non-affordable properties receive an average tax break of 24% relative to what they would pay in conventional taxes. Since these property owners pay PILOTs, they don't pay school taxes. These are not separate problems. They are one and the same.
What's the plan? 5.5 million, and let's assume that's 5.5 every year (likely more)
Plug 3 of that with Pilots, is clear. What gets cut from the town budget?
Remaining 2.5 filled with combination of school finding the money, and further cuts in the town budget?
New pilots/normal taxes for future development (which themselves would also add costs to the schools and town budget).
It's an interesting math problem. Appreciate the efforts that you and LSP take.
The schools will have to become more efficient or raise taxes. Probably a bit of both. They also need long-term strategic planning to adapt to smaller enrollments because the school-age population isn't growing and our ridiculously high home prices mean that the share of families that can afford to choose private schools is increasing. I hope that, once freed from the distraction of annual cuts, our BoE, administrators, and unions will manage to collaborate and plan for a smaller district.
Thanks.
Trying to find a few answers on things -
1) Elsewhere, you mentioned that people may disagree about whether or not to take the 1.1 million cap adjustment - do you know why? I simply don't know the pros/cons of taking it versus not taking it.
2) Do you know the reasoning why the tax increase from the referendum was less than estimated? I know the bonds got issued at a lower coupon rate then expected, so the debt servicing would be less - but is there a reason the tax increase couldn't have been for the published amount?
I'm sorry again that I am slow to monitor comments. Many reasonable people believe the schools should have taken the healthcare exception. It was available and it would not have required a ballot referendum. Many parents I have spoken with agree, and so does the MEA. However, our BoE and administrators have held multiple discussions with seniors and other residents where they promised that, should the bond referendum passed, they would not go beyond the 2% tax levy cap. I respect their decision because I recognize that it's very important that they keep their promises. They will eventually be forced to ask voters to allow them to grow the tax levy beyond the cap, so they must earn the community's trust to be successful.
So, to answer your second question: yes, the bond interest was lower than expected and that reduced the amount our taxes increased (see: https://montclairlocal.news/montclair-taxpayers-to-save-5m-on-school-distircts-referendum-work/). Specifically, the average Montclair taxpayer will pay $199 more for the first year and $209 more for the second year, which is $108 less than expected.
Thanks. The second question still hasn't been fully answered.
I get that the rate on the bond was lower than needed (good!) And that makes the debt servicing cost less (good!).
Knowing that the town voted expecting taxes to be raised a certain amount, is there a reason why taxes weren't raised as much? It may be something as simple as "you legally can't charge more than the amount of interest". But if the reason was "we could have, but wanted to keep the tax bill low", doesn't that seem short sighted now considering the shortfall (And again, this may be irrelevant if the answer is they raised taxes legally as much as they could considering the rate of the sale).
Also, your kiddo was adorable at the last meeting!
Is there a way to break out the number of students from AH buildings with pilots vs luxury buildings with pilots? It would help rebut folks who claim upscale developments have no impact on our schools...
It's possible and we can ask the district if they are willing to provide two numbers, for affordable and non-affordable without identifying the number of students per building.
I'd imagine that might be hard to do, as some of the housing in the luxury buildings is affordable housing (a certain percentage). Living in a "luxury" building doesn't necessarily signal what you'd think.
If there are significant #s of school children coming from, say, Sienna vs from Elm then that does signal something... at the very least, it informs the #s plugged in for school impact (which ARE based on AH vs not AH, and on income tiers).
11 Elm has 14 units all affordable. Union Gardens has 87 units, all affordable. Siena has 101 units, with 10 affordable. Valley and Bloom has 258 units, with 26 affordable. Based on the models developers (and the town) use to calculate school children per unit, we should see SIGNIFICANTLY fewer children from V&B and Siena than we do from Union Gardens - even the V&B and Siena have more units.