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Re: It's Time to Pay the Piper...
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There is no free lunch, but.... it is impossible to convince the council and administration of this. Every effort has met with incoherent rhetoric . Have you ever heard Councilman Lipski try to explain the benefits of tax abatements.....

Our school taxes have not increased in 10 years due to state aid. Now, only the non-abated properties will bear the increases. Now, we will start to see what a good deal these tax abatement agreements really are.

Keep in mind that abated properties have and may continue to receive extensions and transfers.

Maybe the answer is not to argue with our municipal officials to change, but pull the rug out from under them and stopping / reducing abatements through referendum.

Posted on: 2006/3/24 16:33
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It's Time to Pay the Piper...
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Here is an article from today's Jersey Journal:


Jersey City told it has school aid hole to fill
Friday, March 24, 2006
By KEN THORBOURNE
JOURNAL STAFF WRITER

Already staring at a triple-digit tax whack to make ends meet in their municipal budget, Jersey City taxpayers are now facing an additional $7.5 million tax hit to pay for schools.

In a follow-up to Gov. Jon Corzine's bad news budget presentation Tuesday, state officials announced yesterday that aid to most school districts in the state would remain flat.

But in eight of the state's 31 neediest districts, including Jersey City, local taxpayers would have to foot more of the bill, state officials said.

"We didn't want to have a huge detrimental impact here, but we wanted to recognize that some of these communities can supply a greater share of their school funding locally," acting State Commissioner of Education Lucille Davy said during a conference call with reporters.

"Many of them (the eight municipalities) have not raised their (school) tax rate for the last several years. Those communities can begin to pay."

State officials said they determined which municipalities had to pay more based on the property values and the percentage of local tax money going to schools.

Jersey City raises $72 million a year - roughly 13 percent of the district's budget - and hasn't budged in 10 years, school officials said.

"We would have preferred not to have this kind of reduction," said Mayor Jerramiah Healy. "We'll have to find a way to meet this challenge."

Jersey City Superintendent of Schools Charles T. Epps Jr., who is also a state assemblyman, didn't return phone calls for comment.

The cuts in state school aid will translate into roughly a $125 tax hike for a Jersey City taxpayer whose property is assessed at $100,000, said city Business Administrator Brian O'Reilly.

The city budget, which has not been adopted, could add an additional $300 or more to that tax burden, city officials said.

A municipality can get out of making up for what is cut by the state if it can prove to the state that its students will still receive a "thorough and efficient" education - the legally mandated standard.

Jersey City received $430.4 million in state aid this school year and is slated to receive $422.8 next year.

The Newark school district suffered the biggest cut in sheer dollar amount ($8.2 million). But among the larger school districts, Jersey City received the biggest cut as a percentage of total state aid.

Funding remained flat for several Hudson County districts, including Bayonne, North Bergen, Weehawken, Secaucus and West New York.

Hoboken suffered a $231,000 cut.

The Union City school district received a $5 million boost in school aid.

But Anthony Dragona, the district's business manager, said that figure is misleading since the state cut this year's aid package by $3.8 million.

"I'm faced with a $4 million hole in my budget that I have two months to deal with," Dragona said.


? 2006 The Jersey Journal
? 2006 NJ.com All Rights Reserved.



Well folks...it's time to pay the piper; and this is just the beginning I suspect.

As I've been saying, over and over again, to anyone who knows me and will listen, the state of New Jersey is not going to continue to pay for nearly all of the costs of running Jersey City schools forever.

Now that we have reached the point where Goldman Sachs, Donald Trump, The Athena Group and the rest of the big name developers who are likely lining up to build large scale projects in Jersey City have come to town, it is only logical that those people who do not live in Jersey City will start questioning why they are spending their tax dollars to pay for schools that are no where near their homes. When this occurs, it will be the property owners in Jersey City who will be left to pick up the tab. Unfortunately, the people who are living in the developments that will likely tip the scale towards lower school funding by the State of New Jersey won't have to foot the bill.

Yes...this is going to be an all out rant against PILOTs. As the city government is handing out PILOTs to large developers like candy, the state is getting itchy about having to overwhelmingly support the school system in Jersey City. Now I understand that what is occurring now is not the revolt I am talking about. I realize they are not cutting funding as much as they are freezing it, but I would wager anything that this is simply the firing of the first shot.

From this point on, every time the state gets into financial troubles, it is going to look mighty attractive to let the property owners of Jersey City foot more and more of their own school cost. And mark my words, eventually those people who don't live anywhere even close to Jersey City are eventually going to force the state legislative body to reconsider funding schools in a city that is known as the Gold Coast.

The thing is, we cannot blame those on the state level. Ultimately, we have only ourselves to blame. It is us who continues to elect council members who repeatedly vote to hand out PILOTs to large developers on or near the waterfront. It is our own city government who is selling us down the river.

One of the problems is that I believe most people do not truly understand the issue. First of all, I'm not sure that many of us even know there is a difference between and "abatement" and a PILOT program. For this reason, let me explain to the best of my knowledge.

The "normal" property taxes we pay are divided three ways. I will admit that I do not know the percentages off hand, but I do know that the city gets the largest portion of the tax bill and the rest is divided up between the local school system and Hudson County.

Now the city, by law, can give people property tax breaks; and they can do this in one of two ways. The first way is by granting a tax abatement. A tax abatement is a discount (usually 30%) given to people who make significant improvements to their property or to small scale new construction. Abatements are a tool to encourage "the little guy" to improve their property, thus improving the overall area where that property is located. Tax abatements are generally for a term of 5 years and the moneys collected are divided amongst the three entities using the same percentages that are used for all property taxes in Jersey City. Just as a point of full disclosure, my condo unit has a 5 year abatement.

The other way that the city can give a tax break is through a PILOT program. PILOTs are not taxes, however. They are Payments In Liu of Taxes.

PILOTs are handed out to large developers (such as Trump) within a redevelopment zone. Because they are not technically taxes, they do not have to be divided up between the city, the schools and the county. The city of Jersey City gets essentially all of the monies collected from PILOTs. So since the city is not having to "share" the money, even though the rate is substantially lower than the standard property tax rate, the city ends up with more money in the end.

When looked at this way, it is very easy to see why the City Council could become addicted to PILOTs. Essentially they are like crack cocaine. They are a quick fix. It's immediate gratification. Unfortunately, the whole thing is devoid of reality.

Since all of these new units coming on line have or will have PILOTs (and we are talking numbers in the thousands) they will not be participating in the property tax increases that will need to be implemented because Jersey City residents must now foot a larger portion of school costs. That burden is going to fall onto the rest of us.

Admittedly, I am benefiting from an abatement at the moment so I will get a small break in all of this, but my abatement will end in a couple of years. Those owners who live in a property with a PILOT get out of the burden for 20 years or more. Twenty years is a long time folks.

Now I?m not completely against PILOTs. The original purpose of them was as a tool for city governments to encourage redevelopment in blighted areas. Let?s face it; we still have many areas of the city that fall in that category. So I wasn?t particularly upset when The Beacon got a PILOT. I will fully support the developers of the new project in Journal Square when and if they ask for one. I think they should be used to encourage redevelopment around Jersey City University and in the entire Greenville section of the city. I cannot, however, support any more of these things being giving out anywhere in downtown or even on the ?west coast? of the city. These areas are already attractive to development and the big name developers who have the resources to take these sights on. They don?t need incentives. They?re building now simply because they think they can make money.

The time has come for all of us to wake up and begin demanding that our council members stop taking the easy way out thus mortgaging our futures (as well as our children and grandchildren's) because it is easier to hand out a PILOT than it is to do the hard work of living within our means. Those people who can afford to pay half a million dollars or more for a condo unit need to be participating in all forms of the tax burdens just like everyone else. As it stands now, and with the majority of the City Council members thinking that there is no need to stop their habit, the average tax payer in Jersey City is going to get really screwed.

What we need is an intervention and we need it quickly. The piper is going to want far more in payment that what's being demanded at the moment. That's a guarantee.

Posted on: 2006/3/24 15:37
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