This Explainer addresses the Montclair Township’s decision to incentivize property development through tax exemptions, specifically through the use of Payments in lieu of Taxes (PILOTs). When PILOTs are used, Montclair Public Schools (MPS) and taxpayers are not getting all the financial support or tax relief they could. Revenue from PILOTs in Montclair do not currently support the schools or provide relief to school taxes. With tens of millions of dollars in property tax exemptions granted for PILOT projects over the last ten years, none of the projects have contributed to school funding or relieved school taxes.

The Explainer clarifies the series of choices the Town Council makes or omits each time a new development project comes up. It explains the impact these choices have on school budget and school taxes: to essentially impose a hidden cost on our schools and taxpayers. It comes at a crucial inflection point for both the District and Township, with legislation before the Montclair Town Council regarding granting a PILOT to the Lackawanna Development project, and a separate proposal that could require PILOT revenue to be shared with schools.

It also makes several recommendations. First, for residents to educate themselves on the important legislative actions being considered: the Lackawanna Plaza redevelopment, a separate town resolution, and a proposed State law that would require revenue-sharing. MPACT also calls on the Town to publicize its rationale in support or against PILOT revenue-sharing. Finally, MPACT recommends that the Town Council conduct a careful assessment of the impact of PILOTs in Montclair, and what form they should take if continued.