Entity involved with borough on land swap expresses concern over tax plan.
In response to the proposed land deal between the Borough of Haddonfield and developer 2 Hopkins Lane Urban Renewal, LLC, where 90 new townhomes are expected to be built on a 13.15-acre site adjacent to Haddonfield Memorial High School, the board of education released a statement regarding concerns over the borough’s proposed tax plan for the site.
“The funding of our schools is a responsibility of the Haddonfield community as a whole. The tax structure in New Jersey requires that all members of the community who own taxable property contribute to the schools as well as to the county, borough and library. That responsibility exists whether the property owner has children in the district, uses the library, or accesses some of the many services provided by the county or borough. If passed, the proposed PILOT (Payment in Lieu of Tax) would create an inequitable differentiation between future residents of the Bancroft properties and every current resident in the borough.
“As such, this proposed plan is not at all tax neutral, but rather it relieves new occupants and, consequently, the developer of their responsibilities to the borough at a significant cost to our students, school system and existing residents. In practical terms, this PILOT demands that current taxpayers subsidize school-related expenses for the Bancroft development for the next 30 years.”
At issue is the question of how little tax revenue from the new construction would find its way back into school district coffers, whose trickle-down effect could adversely affect tax revenue needed for the district. Under current borough tax rates, according to the BOE, for every $1,000 collected from borough residents, approximately $550 are allocated to schools, $280 to the county and $170 to the municipality.
As proposed in the PILOT program, which was presented to the public by the board of commissioners at its Feb. 26 meeting, new residents of those townhomes would be asked to pay only $700 (70 percent) of their regular tax bill. Of that $700, by law, nothing would be allocated to the schools, only $35 to the county and the remaining $665 to the municipality.
In addition, the board pointed out in its statement new residents under PILOT would not be subject to school-tax increases or future referendum costs for the entire duration of the program, which is expected to last 30 years.
“According to the financial models provided to the public by the commissioners, the financial impact of the tax PILOT program on the school district is now clear: in the first full year of occupancy, the district would not receive $675,000, the amount the school district would receive if the full amount of taxes were being paid according to the assessed values. Those funds would not only provide the money the school district needs to educate the students who come from the new Bancroft properties but also provide the services that current and future students need,” the statement continued.
At the meeting, the board passed Ordinance 2019–02, Application for a Long Term Tax Exemption & Authorizing the Execution of a Financial Agreement with 2 Hopkins Lane Urban Renewal, LLC upon its first reading with a unanimous vote.
On March 7, the board of commissioners issued a release that stated any discussion of the above ordinance would be tabled until its Apr. 23 meeting, and the following day, another release revealed the date of that meeting was pushed back to Apr. 30.
A key component of the agreement between the borough and 2 Hopkins Lane is that the Bancroft townhomes would be “age-targeted,” meaning promoted for potential residents ages 55-and-over, who would have no minor children living with them. Under its current proposal, the borough estimated that only 10 additional children would have to be accommodated by district schools.
“According to the report, the Bancroft development will only result in five additional students from the regularly-priced units and another five from the COAH (Council on Affordable Housing) properties over the next 30 years. The borough used data from existing enrollment based on various property types in town. However, when we look at reports such as the 2015 Residential Demographic Multipliers, they report that the lower and upper limit, with a 90 percent confidence interval, will result in 33 to 36 school-aged children from the regularly priced properties,” the BOE statement continued.
“Therefore, we must conservatively prepare for many more than 10 children to be enrolled in our schools when the Bancroft development is fully occupied. However, there is no way to predict the needs of each of those students or the cost to the school district to educate them. Under the current tax structure, it is the only way in which the district can continue to meet the needs of all its students and stay progressive and competitive in today’s global community. The creation of this tax PILOT program inequitably places the burden of supporting our schools on existing taxpayers in our town who currently pay their fair share of the financial obligation, despite having no children in our schools (such as senior citizens, parents of private school students, and other households without children).”
“The owners of the proposed PILOT properties would not share in that burden. It is for this reason, the Haddonfield Board of Education is opposed to any tax PILOT program which unfairly repudiates our community’s shared responsibility to our education system so that the Bancroft development can be declared tax neutral.”
In response to the board’s concerns, Commissioner Jeffrey Kasko issued a statement on March 6 that read: “The board of education’s position has been duly noted and I plan on joining my fellow commissioners in continuing to work on a revised and more acceptable Bancroft tax/financial agreement with board of education members. Both boards have always had a good working relationship, and I am confident that will continue and that we can craft a mutually-acceptable tax plan that includes adequate funds for our schools.”
Also on that day, the commissioners as a whole released an update on the agreement between the two parties that said: “On Feb. 26, 2019, the board of commissioners introduced an ordinance authorizing a financial agreement between the borough and 2 Hopkins Lane Urban Renewal, LLC for the housing development at Bancroft. Second reading and public hearing were scheduled for March 12, 2019, however, at this point the commissioners have decided that they will table the ordinance at that meeting until April 23, 2019. They will continue to review their options before taking further action on the ordinance.”
Board of Education President Adam Sangillo issued the following to The Sun via email: “We are very pleased with the widespread community response to our shared information. We are confident that the commissioners are committed to maintaining the integrity of our schools and continuing our Haddonfield tradition of excellence in education.”
The full version of the board of education’s statement can be found online by visiting: https://haddonfieldschools.org/wp-content/uploads/2019/03/BOE_PILOT.pdf.
