Most Board of Education meetings seem to revolve around the state of the public school system’s budget, and last week’s meeting was no exception. The unexpected expenses on the upper field at Verona High School and the prospect of more field spending ahead left a clearly exasperated Joseph Bellino asking, “When will the PILOT dollars begin to flow?”
The BOE finance committee chair might not like the answer that came out of last night’s Town Council meeting. “There has been no specific long-term commitment,” said Town Manager Joe Martin. “It’s not a checkbook that you write money from.”
PILOT stands for payment in lieu of taxes, and it was supposed to be a smart way to keep most of the revenue that would flow from the development at Verona’s Hilltop property in Verona. In the usual property-tax formula, 25% goes to Essex County, 25% goes to Verona’s municipal government and 50% goes to Verona schools. In a PILOT set-up, the county gets just 5% and the remaining 95% goes to Verona government. The Highlands at Hilltop, as the Roseland Property development is known, pays conventional property taxes on the land, but follows a PILOT structure for its buildings.
With $1 million or more in PILOT money expected annually when both of the two large units at the Hilltop are finished, the question of where and how the money will be spent in town has loomed large in budget discussions. Martin and the Town Council have portrayed the PILOT dollars as an opportunity for tax relief. The BOE seems to have been expecting budget relief. “I wish we had a nickel for every time we talked about the PILOT money here,” said Bellino last week. “Is there a way that we can pin them [the Town Council] down?”
“I don’t want to be antagonistic,” Bellino said, “but push has come to shove now. If they are going to be generous and give us some, what can we count on?”
Martin told the Council and audience last night that the BOE is already getting $115,000 a year from property taxes on the land. But, as BOE President John Quattrocchi noted in an email last night, $115,000 is the general pool of taxable property. “It does not equate to more cash in the budget,” he wrote. “Rather, it’s additional property that our overall tax base is split across.”
Verona has, overall, better relations between government and BOE than many of our neighboring towns. Earlier this year, the two bodies held a joint session to highlight their combined effort, which Quattrocchi echoed in his email. “The township has provided for various facilities effort assistance for the BOE, using some of the pilot cash flow,” he wrote. “So far, these efforts have centered on needs where there is overall community usage/benefit. The BOE and Township enjoy a healthy working relationship with very frequent communication.”
Martin told the Town Council that the two new playing fields that will be built behind the Verona Community Center–combination baseball and soccer fields, as now planned–will be built with Hilltop PILOT money. The allocation of any other money, he said, would be decided by the Council.
The BOE needs to not count on that PILOT money to help them out. If and when they do get it they should consider it more of a “gift”. The reality of it is that there is no guarantee how much they will get and to think that this money will bail them out of their over spending is a foolish way of thinking. Work within your budget and consider yourself fortunate if /when you get your share.