The Problems with PILOTs – Conclusion

June 5, 2020

This week, we conclude our examination of the many problems with PILOTs and the tax abatement programs that the Brindle Administration recently set in motion in Westfield.  It is an examination that we would have expected the Mayor and Council to openly undertake with input from all residents, preferably after the global pandemic ended.  Unfortunately, Mayor Brindle chose a different path, one lacking in both transparency and public participation.

As a reminder, the quoted excerpts below are taken directly from the 2010 report of the NJ State Comptroller on the abuses arising from PILOTs and tax abatement programs, readable here:  Emphasis has been added below, but the hard facts have not been changed.  Those facts should cause all Westfield residents serious concern.

“[I]n practice, there is essentially no state oversight and monitoring of the granting of individual tax abatements in New Jersey….  These circumstances have resulted in a lack of transparency and accountability regarding the awarding of abatements….”

For school districts, the impact is more direct.  School districts often receive a large portion of traditional property tax collections” – in Westfield approximately 60%.  “As a result, abatements have a large impact on school funding and the tax burden of other taxpayers in the municipality….  When a property tax abatement occurs, the school district receives no portion of the new PILOT revenue and thus loses out on the new wealth of the municipality….”

“The new development may also add new, unfunded service burdens on the schools.  The cost of these burdens must either be absorbed by raising rates on other taxpayers or by paring back services.”

Not only do tax abatement programs for commercial property owners and developers increase the taxes paid by residents, they do not guarantee any benefit to downtown shops, restaurants, and other businesses.  Downtown property owners and developers favored with Mayor Brindle’s tax breaks are under no obligation to pass the savings along in the form of lower rents to their tenants, many of whom are small businesses.  Doing so might help fill some of the many empty storefronts in our downtown.

Not all towns have been duped by the false promises of PILOTs.  Last year, the Bridgewater Township Council rejected their mayor’s proposed PILOT for the redevelopment of roughly 62 acres in that town.  One Bridgewater councilmember stated that as a matter of fairness property tax distribution should occur at the regular rate for all property owners, not just a few favored commercial owners and developers; another argued that developers should be paying the town more money, not less.  We agree.

How many of these serious problems with PILOTs and other tax abatements did the Mayor raise and discuss with the public before our entire downtown was declared blighted?  Shouldn’t we be concerned about the significant potential identified in the Comptroller’s report for “cronyism,” “corruption,” “lost revenue,” “waste and abuse”?  What pros and cons did the Town Council or the Planning Board meaningfully debate before rubber-stamping the Mayor’s plan?

Is this how you expect to be governed by your local officials?  Do you prefer that critical decisions about the future of Westfield’s precious downtown be made during a global pandemic, with residents in lockdown?  Do you want tax revenues diverted from our schools primarily for the benefit of developers, with homeowners picking up the tab?  We don’t.  Westfield deserves better.  If you agree, let Mayor Brindle know at