Howard and Sheena: can you please show the math ...
see the image below. Use the highlighted tax rate with your own assessed value to see your own impact
dickf3 said:
for the new school improvement and integration plan?
The Village Green article last month
https://villagegreennj.com/schools-kids/a-historic-moment-south-orange-maplewood-moves-closer-to-140m-school-improvement-integration-plan/
describes the roughly $140 million (before "optional" add-ons) school improvement and integration plan, and notes:
The plan as estimated is expected to cost the average Maplewood tax payer $522/year and South Orange tax payer $606 — not including additional items the board agreed to consider (more about that below).
And later in the article, this appears:
Collum said she fully supports the overall plan; however, she cautioned that residents should be prepared for their taxes to increase by 10% by year three of the bonding. “Our towns deserve to know the schedule of payments, particularly for those who will need to start making decisions.”
But the article didn't show how this $606/year figure was calculated. Nor did it explain, unambiguously, what Sheena meant by "...taxes to increase by 10% by year three of the bonding". Nor any explanation of implications for year 4, or any other year "of the bonding".
I looked at the Village website, but didn't see any info.
Can you (Howard and Sheena) please present, here, the calculations that yielded the $606/year figure. How you got from (very roughly) $140 million, to $606/year (for the average taxpayer). If the dollar amount is different for subsequent years, can you please show those amounts too. Also: what defines the "average" taxpayer in South Orange?
Great questions. I had some concerns/comments about the chart above that I sent to the BOE. Most notably, the useful life of several areas within the facilities plan are less than 25 years (in my assessment and basic common-sense). There's a difference in the way the municipality bonds versus the rules that guide the schools. They don't have to do a certain percentage of down payment - we do. Additionally, the schedule of payments I believe will be higher in the first few years and more than what I believe Phoenix presented (their financial advisors). There's also debt service aid from the state which I'm not certain how much, if any, is a part of the series of payments.
The above chart only references the facilities plan. In addition to that, and what I believe residents need to understand, is that it doesn't reflecting increases for operating expenses that are typically 2% +/- for the main taxing entities being the schools (57%) which will see an increase in transportation due to the integration plan. The municipality (27%) and the county (16%). The County levy this past year and its impact on our residents was over 5%. This is primarily driven by salaries/wages, healthcare and pension costs. The Murphy administration has not continued the 2% interest arbitration cap for police and fire salaries (our largest expense) despite endless lobbying from virtually every mayor in the state. I drafted and sent a joint letter with most mayors in Essex county. If the new norm is that increases will exceed 2% on salaries and wages alone, it will be devastating to our municipal budgets and our ability to control costs.
Next, in South Orange (obviously can't speak for Maplewood), we have been planning for quite some time our investments in infrastructure so we don't "kick the can" and cause massive hits in the future. We've been systematically addressing our buildings and two main ones for us will be our Baird Community Center and Library. Police HQ is already under way, the Skate House is complete, and an additional expense was bringing our public safety agencies onto the statewide radio network (P25). We also put money aside every year for roads, etc.
I keep a regular schedule on what these impacts may be for the town but don't like to publish before we go out to bid (especially my informal spreadsheets). I use these numbers compared against "new revenue" (yes - redevelopment) in order the minimize impacts on taxpayers. My hope is that new projects will significantly offset the costs of our capital improvement plans - and they absolutely can if they come to fruition.
There's enough time right now where I know people will be making decisions about whether or not these numbers will reflect "tipping points" on whether they can remain where they are, look to downsize into a condo, look to rent or in a worse case - move. But it's important that people have the necessary information to make those decisions.
We'll know more when the Board of School Estimate reconvenes for a formal vote. As painful as some of this will be, the only alternative is to keep pouring money into bandaids and have these projects (and interest rates) go up further in the future.
Here is the link from the district website for more information: https://www.somsd.k12.nj.us/Page/4492
And that, ladies and gentlemen, is why Sheena has been the best Village President that South Orange has ever had. I don't know anyone who has spent as much time understanding the issues and explaining them to the residents as Sheena. If you've ever sent Sheena an email asking a question, the answer that you get is as detailed as Sheena's response above.
Thank you, Sheena.
Thank you, Sheena, for replying.
Many of us in the arts have little familiarity with matters of high finance, and no experience using tables such as the one provided above.
Looking near the bottom of the table, I take it that the answer to my question
dickf3 said:
Also: what defines the "average" taxpayer in South Orange?
is 'a property whose assessed value in SO is $581,000'.
But it didn't explain, unambiguously,
dickf3 said
what Sheena meant by "...taxes to increase by 10% by year three of the bonding".
Nor did I see an explanation in your reply.
Also: Is $606 simply the mean of the 25 dollar amounts which appear in the right hand column headed "home at $581000"?
I see that the first dollar amount in this column, for fiscal year ending 6/30/21, is $820.20. Why do these amounts (which start higher than $606) initially decrease as each fiscal year passes, then rise? I do see that the amounts move in step with the corresponding"$ of net debt service" for each fiscal year. Why do these amounts start high, fall, and then rise again? What financial principle or legal requirement explains this pattern?
I was intrigued by your comment
Sheena said:
We'll know more when the Board of School Estimate reconvenes for a formal vote.
Should not you, and we, know more well before that reconvening for a formal vote? Way before a formal vote?
And, given the dollar amount involved, should not the Village website and the Gaslight have already provided coverage of this matter? Yes ... $140 million is, roughly, only 1/7 of $1 billion. Not even $1 billion. Though still a good amount, especially when spread among just a few thousand taxpayers. Trump needs $3.7 billion more for the wall. Mattis, before he resigned, was pursuing $733 billion for the new defense budget - and that amount included Pentagon and Dept. of Energy funding for the nuclear arsenal.
And could you please say a few words about PILOTs.
While anyone can answer your questions, a comprehensive response is time consuming and best provided by staff, specifically the District Business Administrator -
That said, I think your questions are exactly the kind of questions that should be posed to candidates in the upcoming SO BOT election to gauge their depth of understanding and grasp of topics like Municipal Finance.
dickf3 --- Some of your questions /comments are really best answered in a different forum. For every answer someone gives it could raise more questions. And I don't see how PILOT's could be explained in a few words. Sheena has talked about them numerous times at meetings as have several others.
mayhewdrive said:
While anyone can answer your questions, a comprehensive response is time consuming and best provided by staff, specifically the District Business Administrator -
proth@somsd.k12.nj.us
That said, I think your questions are exactly the kind of questions that should be posed to candidates in the upcoming SO BOT election to gauge their depth of understanding and grasp of topics like Municipal Finance.
I would be shocked if the district business administrator provided a detailed answer to all of these questions. I wish you good luck.
mikescott said:
dickf3 --- Some of your questions /comments are really best answered in a different forum. For every answer someone gives it could raise more questions. And I don't see how PILOT's could be explained in a few words. Sheena has talked about them numerous times at meetings as have several others.
Sheena has also addressed PILOTs at great length here and on Facebook.
yahooyahoo said:
mayhewdrive said:I would be shocked if the district business administrator provided a detailed answer to all of these questions. I wish you good luck.
While anyone can answer your questions, a comprehensive response is time consuming and best provided by staff, specifically the District Business Administrator -
proth@somsd.k12.nj.us
That said, I think your questions are exactly the kind of questions that should be posed to candidates in the upcoming SO BOT election to gauge their depth of understanding and grasp of topics like Municipal Finance.
yahooyahoo - You live in Maplewood. Where are you getting your answers? Are you looking at Sheena to supply them?
PILOT stands for payment in lieu of taxes. Such payments do not include school taxes which means real property tax papers have to cover the difference. This impacts how much each taxpayer has to pay towards school taxes.
joan_crystal said:
PILOT stands for payment in lieu of taxes. Such payments do not include school taxes which means real property tax papers have to cover the difference. This impacts how much each taxpayer has to pay towards school taxes.
However, PILOT deals are most negotiated to the town’s favor, since the payments are to the town, that can ultimately save taxpayers. In a shared school district, like MAPSO, it also shifts more of the burden to the other town, a perhaps unintended but real,consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
joan_crystal said:
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
The short answer is that it depends on the new property not contributing to the school system as is generally a selling point for the development. If there is no significant new burden on the shared-cost school district, then you're right that one town's PILOT could adversely affect the other.
If on the other hand the new development does add new students, then the cost of those students would be shared according to the predetermined percentage you mention but the PILOT-granting town got the up front benefit of the payment from the developer. I don't want to get into a debate re whether there will be new students, and what their marginal costs will be. That's a wait and see as far as I'm concerned.
What's also important to understand is that regardless of which town inititates the PILOT, and whether or not new students join the school, the County gets screwed out of the +/- 25% of the property taxes the new property would have been responsible for if not for the PILOT. Some might say this is justification alone for granting PILOTS.
Sheena said:
Next, in South Orange (obviously can't speak for Maplewood), we have been planning for quite some time our investments in infrastructure so we don't "kick the can" and cause massive hits in the future. We've been systematically addressing our buildings and two main ones for us will be our Baird Community Center and Library. Police HQ is already under way, the Skate House is complete, and an additional expense was bringing our public safety agencies onto the statewide radio network (P25). We also put money aside every year for roads, etc.I keep a regular schedule on what these impacts may be for the town but don't like to publish before we go out to bid (especially my informal spreadsheets). I use these numbers compared against "new revenue" (yes - redevelopment) in order the minimize impacts on taxpayers. My hope is that new projects will significantly offset the costs of our capital improvement plans - and they absolutely can if they come to fruition.
joan_crystal said:
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
peteglider said:
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
The split is not 50/50. Based on the most recent reassessment which was performed on both towns by the same company using the same point in time for reference, the average South Orange real property tax payer pays slightly more towards the school district than does the average Maplewood real property tax payer. I don't know what the ratio was at the time of the conversation you cite above. Since comparative property values change over time, this ration is subject to change.
joan_crystal said:
peteglider said:The split is not 50/50. Based on the most recent reassessment which was performed on both towns by the same company using the same point in time for reference, the average South Orange real property tax payer pays slightly more towards the school district than does the average Maplewood real property tax payer. I don't know what the ratio was at the time of the conversation you cite above. Since comparative property values change over time, this ration is subject to change.
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
Exactly - this happens because the split isn’t 50/50!
peteglider said:
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
I believe you are incorrect. Regardless of PILOTs, SO and MA still contribute the same unequal $ amounts, based on their overall valuations. Since SO offers far more PILOTs, or has in the past, those properties are removed from the mix in calculating the school tax rate. Therefore, it causes SO homeowners, not MA homeowners, to pick up the slack through a higher than normal rate. I think...it is very confusing.
Dennis_Seelbach said:
peteglider said:I believe you are incorrect. Regardless of PILOTs, SO and MA still contribute the same unequal $ amounts, based on their overall valuations. Since SO offers far more PILOTs, or has in the past, those properties are removed from the mix in calculating the school tax rate. Therefore, it causes SO homeowners, not MA homeowners, to pick up the slack through a higher than normal rate. I think...it is very confusing.
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
Yes and no. SO would pick up whatever their (larger than MW) % of the cost of new students contributed by the development's new students, and/or the school portion of the tax revenue lost from the property that was demo'ed or redeveloped. But you have to keep in mind that SO got 100% of the PILOT payment made by the new development. In this way PILOTS tend to take money out of a school district and county and give it directly to the municipality granting the PILOT. It's anyone's guess what this money might be used for... roads, DPW, firetrucks, whatever.
ETA: Yes, SO would pick up a larger portion of the slack you mention, but MW would receive no benefit and still be responsible for their (smaller) portion of the slack.
joan_crystal said:
peteglider said:The split is not 50/50. Based on the most recent reassessment which was performed on both towns by the same company using the same point in time for reference, the average South Orange real property tax payer pays slightly more towards the school district than does the average Maplewood real property tax payer. I don't know what the ratio was at the time of the conversation you cite above. Since comparative property values change over time, this ration is subject to change.
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
The split isn't 50/50. It's based on the aggregate values of all properties in each town that are on the tax rolls, and adjusted with a magic number* that's applied by the county each year that is supposed to account for changes in property values in each town since the last reassessment. PILOTed properties are not on the tax rolls and are therefore not counted in the calculation of the aggregate property values for each town, so the PILOTs reduce the percentage of school tax that the town granting the PILOT has to pay.
The current school tax ratio is about 43% South Orange and 57% Maplewood. But Maplewood sends twice as many students to the school district as South Orange, so on a per student basis, South Orange pays a lot more.
In round numbers, normal taxes are apportioned something like 60% to the school district, 25% to the Village, and 15% to Essex County, give or take 1 or 2% in one direction or another. But PILOTed properties are not on the tax rolls and are not counted in this calculation. PILOTs pay 95% to the Village, 5% to the county, and nothing to the schools.
* As an aside, I call it a "magic number" because I filed an OPRA request with Essex County a few years ago asking them to "show the math" on how they determine this number (which seems to always move the needle a little bit to the detriment of South Orange), and they told me they could not release that information because they didn't know where the number came from or how it was calculated. They told me to file the request with the state, which is absurd because state law mandates that each county needs to supply this number for every municipality in the county.
Rob_Sandow said:
joan_crystal said:The split isn't 50/50. It's based on the aggregate values of all properties in each town that are on the tax rolls, and adjusted with a magic number* that's applied by the county each year that is supposed to account for changes in property values in each town since the last reassessment. PILOTed properties are not on the tax rolls and are therefore not counted in the calculation of the aggregate property values for each town, so the PILOTs reduce the percentage of school tax that the town granting the PILOT has to pay.
peteglider said:The split is not 50/50. Based on the most recent reassessment which was performed on both towns by the same company using the same point in time for reference, the average South Orange real property tax payer pays slightly more towards the school district than does the average Maplewood real property tax payer. I don't know what the ratio was at the time of the conversation you cite above. Since comparative property values change over time, this ration is subject to change.
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
The current school tax ratio is about 43% South Orange and 57% Maplewood. But Maplewood sends twice as many students to the school district as South Orange, so on a per student basis, South Orange pays a lot more.
In round numbers, normal taxes are apportioned something like 60% to the school district, 25% to the Village, and 15% to Essex County, give or take 1 or 2% in one direction or another. But PILOTed properties are not on the tax rolls and are not counted in this calculation. PILOTs pay 95% to the Village, 5% to the county, and nothing to the schools.
* As an aside, I call it a "magic number" because I filed an OPRA request with Essex County a few years ago asking them to "show the math" on how they determine this number (which seems to always move the needle a little bit to the detriment of South Orange), and they told me they could not release that information because they didn't know where the number came from or how it was calculated. They told me to file the request with the state, which is absurd because state law mandates that each county needs to supply this number for every municipality in the county.
The tax apportionment comes from each town's share of the total SOMSD Equalized Valuation. If South Orange has 56% of the total EV, it has to pay 56% of the taxes. If it has 58% the next year, it has to pay 58%.
EV is calculated based on a ratio of sales prices versus official assessments. If sales prices exceed official assessment by an average of 10%, than the Equalized Valuation is 110% of the total of the official assessments.
https://www.state.nj.us/treasury/taxation/lpt/lptvalue.shtml
Sheena said:
The above chart only references the facilities plan. In addition to that, and what I believe residents need to understand, is that it doesn't reflecting increases for operating expenses that are typically 2% +/- for the main taxing entities being the schools (57%) which will see an increase in transportation due to the integration plan. The municipality (27%) and the county (16%). The County levy this past year and its impact on our residents was over 5%. This is primarily driven by salaries/wages, healthcare and pension costs. The Murphy administration has not continued the 2% interest arbitration cap for police and fire salaries (our largest expense) despite endless lobbying from virtually every mayor in the state. I drafted and sent a joint letter with most mayors in Essex county. If the new norm is that increases will exceed 2% on salaries and wages alone, it will be devastating to our municipal budgets and our ability to control costs.
Next, in South Orange (obviously can't speak for Maplewood), we have been planning for quite some time our investments in infrastructure so we don't "kick the can" and cause massive hits in the future. We've been systematically addressing our buildings and two main ones for us will be our Baird Community Center and Library. Police HQ is already under way, the Skate House is complete, and an additional expense was bringing our public safety agencies onto the statewide radio network (P25). We also put money aside every year for roads, etc.
Sheena's answer is excellent, but I think there are other factors at work from Phil Murphy that will increase South Orange's taxes at rates above what has prevailed in the last few years.
Phil Murphy, with the legislature, also gave the police and firefighters the ability to control their own pension benefit levels, including the restoration of COLAs. Once the benefits are increased, municipal and county governments must make larger pension contributions.
Also, Phil Murphy continued a policy begun by Chris Christie of lowering the Discount Rate for NJ's pension funds, which is the assumed rate of return for NJ's pension funds. The lower a Discount Rate is, the larger the employer's contributions must be. Over a few years, the Discount Rate will fall from 7.65% to 7%.
Lowering the Discount Rate, transferring control of pension benefits to the police & fire unions, and eliminating the arbitration cap will all increase South Orange's taxes.
The only countervailing forces I see are the possibility of additional state aid and South Orange increasing its tax base. Steve Sweeney's "Path to Progress" would also save us some money too and prevent the depletion of the state-paid pension funds in the 2020s, but Phil Murphy might veto it.
In other words, get ready for bigger tax increases induced by the person that almost everyone in SOMA voted for to be governor.
JBennett said:
In other words, get ready for bigger tax increases induced by the person that almost everyone in SOMA voted for to be governor.
Except there is the 2% tax increase budget cap. This is the argument that Sheena and the other mayors made for keeping the 2% arbitration cap for police and firefighters. If arbitration results in increases for police and firefighters >2%, there will either have to be a cutback of police and firefighters and/or a cutback of other municipal services.
eta - The Democrats could have extended the 2% arbitration cap for police and firefighters in the lame duck session, but opted to wait until Murphy had a chance to review it.
cramer said:
JBennett said:Except there is the 2% tax increase budget cap. This is the argument that Sheena and the other mayors made for keeping the 2% arbitration cap for police and firefighters. If arbitration results in increases for police and firefighters >2%, there will either have to be a cutback of police and firefighters and/or a cutback of other municipal services.
In other words, get ready for bigger tax increases induced by the person that almost everyone in SOMA voted for to be governor.
eta - The Democrats could have extended the 2% arbitration cap for police and firefighters in the lame duck session, but opted to wait until Murphy had a chance to review it.
You're right about the property tax cap restraining tax increases that would happen due to higher salary awards for police and firefighters, although pension payments are outside the tax cap, so the higher pension payments that result from the other changes I described (S5 and lowering the Discount Rate) will result in larger tax increases.
JBennett said:
Rob_Sandow said:The tax apportionment comes from each town's share of the total SOMSD Equalized Valuation. If South Orange has 56% of the total EV, it has to pay 56% of the taxes. If it has 58% the next year, it has to pay 58%.
joan_crystal said:The split isn't 50/50. It's based on the aggregate values of all properties in each town that are on the tax rolls, and adjusted with a magic number* that's applied by the county each year that is supposed to account for changes in property values in each town since the last reassessment. PILOTed properties are not on the tax rolls and are therefore not counted in the calculation of the aggregate property values for each town, so the PILOTs reduce the percentage of school tax that the town granting the PILOT has to pay.
peteglider said:The split is not 50/50. Based on the most recent reassessment which was performed on both towns by the same company using the same point in time for reference, the average South Orange real property tax payer pays slightly more towards the school district than does the average Maplewood real property tax payer. I don't know what the ratio was at the time of the conversation you cite above. Since comparative property values change over time, this ration is subject to change.
joan_crystal said:Here’s how that works. South Orange grants a Pilot. $x are no longer contributed by South Orange property, so it falls more on Maplewood than South Orange since the split between towns isn’t 50/50 I recall years ago John Grossman had a detailed spreadsheet which quite clearly demonstrated this consequence.
PILOTs contributing more to the municipal budget than might otherwise be the case depends on the PILOT agreement and is not germane to the school funding issue under discussion in any case, since PILOTed properties do not pay school taxes for the duration of the PILOT.
I am not sure that your second point is accurate. Since each town in a regional school district, like ours, is responsible for a predetermined percentage of the cost of funding the school district based on total dollar value of real properties in their town, I don't see how PILOTs in town A would have a direct impact on raising school tax responsibility in town B. Perhaps someone with a better understanding of school funding could clarify.
The current school tax ratio is about 43% South Orange and 57% Maplewood. But Maplewood sends twice as many students to the school district as South Orange, so on a per student basis, South Orange pays a lot more.
In round numbers, normal taxes are apportioned something like 60% to the school district, 25% to the Village, and 15% to Essex County, give or take 1 or 2% in one direction or another. But PILOTed properties are not on the tax rolls and are not counted in this calculation. PILOTs pay 95% to the Village, 5% to the county, and nothing to the schools.
* As an aside, I call it a "magic number" because I filed an OPRA request with Essex County a few years ago asking them to "show the math" on how they determine this number (which seems to always move the needle a little bit to the detriment of South Orange), and they told me they could not release that information because they didn't know where the number came from or how it was calculated. They told me to file the request with the state, which is absurd because state law mandates that each county needs to supply this number for every municipality in the county.
EV is calculated based on a ratio of sales prices versus official assessments. If sales prices exceed official assessment by an average of 10%, than the Equalized Valuation is 110% of the total of the official assessments.
https://www.state.nj.us/treasury/taxation/lpt/lptvalue.shtml
Yes, but there are a lot of properties that are disqualified from equalized valuation for one reason or another. My point was that I asked Essex County to "show the math" via OPRA, and they outright told me they couldn't do it, while state law mandates that the counties produce this number each year. Why would Essex County be able to produce the numbers for each municipality and provide them to the state, if Essex County cannot respond adequately to an OPRA request that asks how they came up with the number?
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for the new school improvement and integration plan?
The Village Green article last month
https://villagegreennj.com/schools-kids/a-historic-moment-south-orange-maplewood-moves-closer-to-140m-school-improvement-integration-plan/
describes the roughly $140 million (before "optional" add-ons) school improvement and integration plan, and notes:
The plan as estimated is expected to cost the average Maplewood tax payer $522/year and South Orange tax payer $606 — not including additional items the board agreed to consider (more about that below).
And later in the article, this appears:
Collum said she fully supports the overall plan; however, she cautioned that residents should be prepared for their taxes to increase by 10% by year three of the bonding. “Our towns deserve to know the schedule of payments, particularly for those who will need to start making decisions.”
But the article didn't show how this $606/year figure was calculated. Nor did it explain, unambiguously, what Sheena meant by "...taxes to increase by 10% by year three of the bonding". Nor any explanation of implications for year 4, or any other year "of the bonding".
I looked at the Village website, but didn't see any info.
Can you (Howard and Sheena) please present, here, the calculations that yielded the $606/year figure. How you got from (very roughly) $140 million, to $606/year (for the average taxpayer). If the dollar amount is different for subsequent years, can you please show those amounts too. Also: what defines the "average" taxpayer in South Orange?