Under the PILOT this year, the Hilltop apartments will pay $663,292.31. (The total assessment of the two buildings is more than $29 million.) Their annual payment will be $766,937.58 by 2020 and by 2029, the PILOT payment will exceed $1 million annually. It be more than $1 million for 13 years in total, with the largest PILOT payment, $1,430,450.40, to be made in 2041.
Developers love PILOT agreements because they get a predictable expense. Their bankers love them because they add stability to a building’s finances. Towns love them because, instead of property taxes that rise and fall with with economy, they get predictable revenue. When the Town Council approved a bond to build the two turfed youth sports fields near the Hilltop apartments in 2013 it did so knowing that it would have a stream of money coming in to pay off the $5.1 million debt.
But schools would love to have a predictable revenue stream too, especially since the cutbacks in state aid over the last decade mean that Verona now gets back just three cents of every dollar that it sends to Trenton. Last Wednesday, Gov. Chris Christie announced that he had given $1.18 billion in aid to Essex County schools. But Verona got only $887,647, pretty much exactly what it had gotten the year before and 93% of that is mandated for special ed.
So what does Martin say the town has spent for the public schools? Start with $75,000 for garbage and recycling pickup. To put that in perspective, know that Verona spent $1,431,842.83 on garbage pickup for the entire town in 2013, or roughly $256 per household. Martin also said the town incurs $20,000 annually for what he called police “overtime” when officers are present at school events. But he hasn’t taken issue publicly with the cost of police presence at other events, such as the Verona Baseball & Softball League’s annual parade from Verona Park to Everett Field or UNICO’s Labor Day 5K.
“School security is not billable,” Councilman Michael Nochimson said after the meeting. “It is supporting a community service and we are one community. The safety and security of everyone is equal.”
Mayor Bob Manley insisted that there’s a difference between school events and other organizations. “Any time police presence is requested for an event in Verona such as the UNICO Labor Day Run, BoE functions, and the VBSL Parade, they are all potentially billable,” he wrote in response to an emailed question. “As a courtesy, the Township simply chooses not to do so because these events are viewed as being for the greater good of the general community as a whole. However, to compare the VBSL Parade and the UNICO Labor Day Run to BoE functions is an unfair comparison. Both the VBSL Parade and the UNICO Labor Day Run are events that take place ONCE per year, and for a time period of only 1 – 2 hours. In any given year, the BoE can have anywhere from 6 to 12 events that require a police presence, such as athletic competitions, band contests, and various other performances or presentations. As well, much police support is extended to the Verona Eagles’ events at Centennial Field that occur numerous times throughout the fall. In providing this service to these organizations without charge, we not only insure the safety of the public, but maintain the mutually respectful and positive relationship we enjoy with all of these organizations.”
Mark Twain once said, “Some people use statistics like a drunk uses a lamppost; for support rather than illumination.” The above, undocumented, unverified graph that shows Verona’s property tax rising 30% since 2009, while Caldwell’s has only risen 5% is misleading at best, and an unfair comparison for a number of reasons. Each municipality is responsible for collecting 100% of your property tax. On average, 55% of Verona’s goes directly to the Board of Education, and 20% goes directly to Essex County. This leaves the Township roughly 25 cents on the dollar to run your town.
A comparison done in the fashion of the above graph is simply an example of apples to oranges. All towns provide different services, have different revenues, and have a different tax basis (residential vs. commercial) to pay for the essential services they provide.
The unverified graph by Mr. Roman chosen to be presented in this article offers no detail or support, and it is unknown from where his statistics are derived. It is obvious that he did not use the municipal tax levy which is a much truer example of what the Township Council has within its control. The municipal tax levy is set strictly by the Council, and while still driven by certain fixed costs, it does not fluctuate with the economy or other external influences.
Back in 2010 when the national economy was in such dire straits, the Township Council heard the real and troubling concerns of our residents and came in with a flat tax levy, a 0% increase for the next 3 years. For 2010 to 2011, 2011 to 2012, and 2012 to 2013, the money to be raised by taxation for the municipality portion of your total property tax did NOT increase.
According to the above graphed municipalities’ own official websites showing the tax levy % increases from 2010 through 2014, an illuminating truth is revealed. Caldwell’s municipal tax levy actually increased by only 2%, West Caldwell’s by 5.98%, and Verona’s by 11.75%. However, Montclair increased by 13.3%, Glen Ridge 14.8%, Essex Fells 16.91%, and Cedar Grove by 18.58%.
A quick look at Caldwell’s audit report highlights three key reasons why they are lower than Verona’s.
1. Caldwell’s Miscellaneous Revenue Anticipated accounts for over 40% of their budget, which leaves only 60% to be raised by taxation.
Verona’s Miscellaneous Revenue only accounts for about 20% of our budget, half of Caldwell’s, leaving 80% to be raised by taxation.
Caldwell’s Community Center brings in just under $2,000,000 a year as it is run like a fitness club charging membership fees.
The Verona Community Center generates about $70,000 derived from rental of the
banquet room. It is predominantly used to facilitate Township recreation programs.
2. Caldwell pays 48% of property tax to their BoE compared to Verona’s 55%.
3. Caldwell has a substantially greater percentage of a commercial to residential tax base compared to that of Verona.
The Payment in Lieu of Tax program is a good thing, particularly for municipalities the size and demographic of Verona. It allows the township to maintain the delivery of essential services, and implement needed projects, programs and facilities while keeping the municipal portion of your property tax low. Please feel free to contact me if you wish to further discuss any concerns you may have.
Mayor Bob Manley
[email protected]
Mayor Manley,
Thank you for your comments.
First, the quote you refer to is generally attributed to Andrew Lang. Mark Twain may have said many memorable things but that is not one of them.
The graph I prepared is based on the municipal tax levies of each of the municipalities shown. I pulled the state form municipal budgets from each of their websites for all years available at the time of preparation of this data. The numbers graphed are the cumulative percentage increase over a 2008 reference year for the value on Sheet 11, Line 6, “Total Amount to be Raised by Taxes for Support of Municipal Budget”, FCOA 07-199.
You state that Verona did not enact a tax increase for the 2010 – 2011 time period. That is incorrect.
In 2010, the total municipal levy was $14,059,373. In 2011, it was $14,865,208. From 2011 to 2012 and from 2012 to 2013 it did not increase from that $14,865,208 amount until the originally proposed 2014 tax levy hike to $15,833,811, later brought down to $15,710,811. Thus, we were hit with a 5.73% tax increase in 2011 and a 6.52% increase was originally proposed for 2014, finalized at 5.69%. You voted to approve those increases.
I will agree that under intense public pressure the Township did limit the rise in its tax levy for a two-year period of time followed by a significant tax hike in 2014. We have still increased the levy at three times the rate of inflation over a 2008 reference year. That to me remains unacceptable financial performance and a real increase on the burden placed on citizens.
Alex Roman
The quote is actually derived from 1903 writing by H.E. Housman, but yes, I stand corrected. It is most attributed to Andrew Lang. Thank you Alex.
However, I stand by every other comment made in my response. The Verona Township Council did not increase the amount of municipal spending to be paid by taxation for 3 consecutive years. As I previously stated, there are many fixed cost drivers, more than most people realize, that are beyond the control of the Council. I also stand by what I have said since I initially ran for Council six years ago; I firmly believe that the vast majority of Verona residents would rather see their Council endeavor to keep taxes as low and consistent as possible, but without sacrificing the delivery of essential services they have come to enjoy and upon which they rely.
My apologies to Mr. Lang
Bob Manley