Municipal Debt a Catch-22 for Collingswood
PILOT agreements lessen debt obligation for private interests but cost taxpayers in the long run, argues Joseph Dinella.
To the editor:
Debt is at the heart of the matter.
Unrestrained and unaccountable borrowing for reasons not related to purpose of local government—which is providing for public health and public safety—have resulted in a debt service that is twice that of neighboring communities.
The Old Zane School sure does look a hell of lot better than it used to. But these aesthetics cost taxpayers $1.8 million over 25 years, which is the stated useful life of the project in Ordinance 1161, which authorized the borrowing in August 1998. We are now throwing our money away by selling it for less than half of its $1,959,900 assessed value. Not a very smart move for taxpayers during a depression.
PILOTs are the crack-cocaine of redevelopment. Developers NEED them to make the project work. To be fair, some tax incentive is reasonable to move a project along. But it is never the borough that takes the hit, it is always the schools. And other towns don't then borrow money to complete the project. So taxpayers lose twice: by paying as little more to lessen a corporate tax obligation and by paying debt service for something which is not for public use.
In 1997, Mayor Maley's first year as mayor, the school tax was 53 percent of the total tax bill and the municipal tax was 21.91 percent of the total tax bill. In 2012, the school tax was 45.76 percent of the total tax bill and the municipal tax was 29.34 percent of the total tax bill. So redevelopment hasn't reduced municipal taxes, it has increased them.
Legally, technically, the mayor and school Superintendent Scott Oswald are correct. Paying the schools all the money due from each redevelopment project will not increase the money spent on education, it will only decrease the school tax—unless voters approve a special school budget request to exceed the state-mandated cap. Even if voters stand up and do that, their local taxes will not go down, because we have a mountain of municipal debt to pay off.
It's a Catch-22. Debt, municipal debt, for private residences and commercial businesses that do not provide even an indirect service to taxpayers, is at the heart of the matter.
Someday, in the distant future, when our kids are finished college and have families of their own, all this redevelopment will pay off. But until then, we all have to pay a more in taxes so a select few can receive a benefit right now, in the present. How fair is that?