WASHINGTON, DC – (RealEstateRama) — Legislation (A326/1475) sponsored by Assembly Republicans Michael Patrick Carroll and Anthony M. Bucco, approved today by the State and Local Government Committee, requires a portion of payments-in-lieu-of-taxes to be shared with county government and school districts.
To spur economic development or urban renewal, local governments often negotiate payments-in-lieu-of-taxes making a project more desirable for developers. These payments to a city or municipality brings significantly less revenue to the budget, but can be justified by the future expansion of the tax base through new development and increased property values.
“These agreements can be a win-win for the municipality and the developer, but county government and schools don’t receive any of the payments. Property taxpayers in other towns are forced to fill the void with higher tax bills,” said Carroll (R – Morris). “This legislation addresses the inequities of payments-in-lieu-of-taxes, ensuring all taxpayers are treated fairly, and that counties and schools get their share.”
“The law is intrinsically unfair when municipalities can grant abatements without discussion with the county and school boards that lose out on tax revenue,” said Bucco (R – Morris). “Just like property tax payments, these payments should be split up and disbursed fairly. Projects that are designed to strengthen the local economy should not be built on the backs of New Jersey property taxpayers.”