PILOT procedures should be clarified

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Letter to the editor Letter to the editor

To the editor:

As the need for more revenue deepens, cash-strapped municipalities such as Galloway may increasingly continue to turn to colleges such as Richard Stockton College, as well as other nonprofit groups, to request payment in lieu of the taxes, or PILOT, on their property. Private colleges and other nonprofit organizations, such as hospitals, churches, and soup kitchens are exempt from paying property tax in all 50 states. The forgone revenue may well total as much as $32 billion nationwide.

As municipal budgets are stretched thin, politicians have called on colleges and other such groups to compensate cities and counties for the services they use. Many of those agreements have appeared to be haphazard, secretive and calculated in an ad hoc manner. Moreover, payments in lieu of taxes have shown not to be structured as a reliable long-term source of funds.

Municipalities and nonprofit groups should work collaboratively to negotiate plans for payments in lieu of taxes that are transparent, equitable and predictable in providing the long-term stability that our community requires.

Any such plans should clearly articulate the methods for deciding which nonprofit groups will make payments in lieu of taxes. For example, PILOT amounts might be based on square footage or an organization's annual operating income. To go even further, another example could be to seek payments equal to 25 percent of the property taxes that would have begn owed if the real estate holdings were fully taxable.

Kevin Krumaker

President, Galloway Democratic Club

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