MORRIS COUNTY — Legislation advancing in Trenton could change how future redevelopment projects using Payments in Lieu of Taxes (PILOTs) support local school districts across Morris County — but it would not impact any PILOT agreements already in place.
The New Jersey Senate Community and Urban Affairs Committee recently advanced Senate Bill S-1807, sponsored by Troy Singleton and Benjie Wimberly. The bill would require municipalities entering into new PILOT agreements to either share a portion of the revenue with their local school districts or enter into an agreement with the developer to fund school-related projects.
Crucially for municipalities throughout Morris County, the legislation is prospective only, meaning existing PILOT agreements would remain unchanged and would not be reopened or renegotiated.
What the Legislation Would Change
Under S-1807, when a municipality considers and approves a new property tax exemption, it would be required to:
- Share a portion of the PILOT revenue with the local school district or
- Reach an agreement with the developer to provide direct, in-kind support or special projects benefiting the school district
The bill is intended to address long-standing concerns that while PILOT agreements can spur redevelopment, they may also divert funding that would otherwise support public schools.
How Revenue Sharing Would Be Calculated
If municipalities choose to remit funds rather than pursue an alternative agreement, the required contribution would vary based on the type of development:
- Residential developments:
The amount would be based on the number of school-aged children residing in the project multiplied by the state’s per-pupil funding amount. - Nonresidential or mixed-use developments:
The required contribution would equal five percent of the PILOT payment, or an in-kind contribution of equal value.
In all cases, the amount shared with school districts could not exceed the percentage they would normally receive from property tax revenue.
Additional Oversight and Transparency
The bill would also require municipalities to provide notice to county officials, school districts, and the New Jersey Division of Local Government Services whenever a property tax exemption is considered or approved.
Why It Matters in Morris County
With continued redevelopment activity throughout Morris County, supporters of the legislation say the bill seeks to strike a balance between encouraging economic growth and protecting school district funding — particularly as new residential developments add students to local school systems.
For residents, the key takeaway is that current PILOT agreements remain untouched, while future projects could include new requirements to ensure school districts benefit alongside redevelopment.
The legislation must still advance through the full legislative process before becoming law.
