Council Passes Town/Gown Tax Deal
The town of Princeton and Princeton University have produced a seven year agreement under which the University will make voluntary unrestricted financial contributions to the municipality totaling $21.72 million, as well as one-time contributions valued at $2.59 million to several identified municipal projects.
The agreement was voted on at Monday’s public meeting after brief discussion and public comment. Mayor Lempert and Councilwoman Heather Howard recused themselves from the discussion and vote because of a conflict of interest; both of their spouses are employed by Princeton University.
Council President Bernie Miller summarized the agreement and the process by which it had been achieved since last fall. He described it as “unique” and “groundbreaking” for three reasons: it is for seven years; contributions increase annually; and the University will make one-time contributions to projects that were agreed to be of mutual benefit to the University and the town.
In a press release from the University last week, Mr. Miller described the seven year duration as important for “fiscal stability.” The annual amounts paid by the University will increase at a rate greater than permitted for the municipal property tax under New Jersey State law. In addition, the University has agreed to donate to the municipality for its use the University-owned parking lot on Franklin Street that has been valued in the range of $1 million.
In the same press release, Princeton University President Christopher L. Eisgruber is quoted: “We are very pleased to be able to make these contributions to the town of Princeton, and in doing so to reaffirm both our desire to help sustain the vitality and well-being of our home community and our deep appreciation for the many aspirations and interests we share.”
At Monday’s meeting, Mr. Miller went on to thank Mr. Eisgruber, who participated in the initial town/gown meeting last fall, for setting a positive tone for the negotiations that recognized the interests of both the University and the municipality in an atmosphere of mutual respect.
He gave special thanks to the town’s administrator Bob Bruschi and Councilman Patrick Simon, who served with him on the negotiating team and he thanked Council members Jo Butler, Jenny Crumiller and Lance Liverman for their input.
“It will serve Princeton well and be a model for other towns where town and gown share common goals,” Mr. Miller said after listing highlights that include the following:
In calendar year 2014 the University’s voluntary unrestricted contribution will be $2.75 million, an increase of more than 10 percent over its 2013 contribution; in each subsequent year through 2020, the University will increase its contribution by 4 percent per year; in 2014 the University will contribute an additional $90,000 for the purchase of a new Free-B vehicle.
Over the course of the agreement, the University will also make the following one-time contributions: $250,000 toward construction of a new storage facility for the town’s Department of Public Works equipment; $500,000 toward construction of a new Princeton First Aid and Rescue Squad facility on municipal land; $250,000 toward the expansion of the Witherspoon Fire Station (in addition to $300,000 already committed to this project under a prior agreement); and $500,000 toward the purchase of fire-fighting apparatus.
Patrick Simon expressed his pleasure at the agreement and for having “turned a page” in the relationship between the municipality and the University. He thanked Council members Lance Liverman, Jenny Crumiller, and Jo Butler, who met regularly with the municipal negotiators, and volunteer Brad Middlekauff for invaluable assistance.
University representatives Robert Durkee, vice president and secretary, and Kristen Appelget, director of community and regional affairs, who were at the meeting, were praised for their efforts; both had worked on the agreement.
Several members of the public, including Mary Clurman, Kip Cherry and Paul Driscoll, rose in public comment to question the amount that the University has committed to the town.
In 2011, a group of local residents sued the University on the grounds that it should pay property taxes on nearly 20 buildings not directly related to classroom or educational activities, such as Princeton University Press, Alexander Hall, Prospect House, Dillon Gym and Stephens fitness center, McCarter Theatre, the Frist Center, and McCosh Infirmary.
“They [the University] should be paying more, given the amount of property they own and the percentage they are contributing to the town’s budget,” said Ms. Cherry. She then went on to question the contributions promised by the University to projects that have not yet been discussed or approved by the citizens of Princeton. “These are projects that the town hasn’t decided upon and yet they appear on the budget.”
Mr. Bruschi replied that the funds could go to other projects, a point reiterated by Mr. Miller who explained the projects as candidates for funding by the University; projects that would be of mutual benefit to both. “If any or all of these projects do not come about we can sit down again with the University and discuss others, and if this or a future council changes plans, we can work with the University to redirect the funds.”
But Ms. Cherry was not sufficiently assured. Ms. Butler commented that while she understood Ms. Cherry’s concerns, it was important to find projects of mutual interest.
It was pointed out that in addition to the contributions described in the agreement, the University makes additional voluntary contributions each year through a longstanding practice of leaving certain properties, such as non-dormitory graduate student housing, on the tax rolls even though they could qualify for exemption from property taxes under New Jersey law.
According to the new agreement, the University intends to continue this practice and that if the practice is modified, it will make additional voluntary payments to the municipality and the schools at the levels they would have received if the properties had remained on the tax rolls.
The University’s property taxes are expected to increase significantly in future years with the completion of its Lakeside graduate student housing and Merwick/Stanworth faculty/staff housing projects.
Following Ms. Cherry’s remarks, Mr. Driscoll expressed his dissatisfaction with the transparency of decision-making in the town. From the public’s perspective, he said: “it feels like powerful groups in the University come in and trump our needs. No matter how many times we come in and talk, we feel powerless.” There was no response to his comment from members of Council.
Mr. Durkee was then invited to speak. Addressing the council, he said: “We appreciate the opportunity to provide the community an unrestricted contribution which you decide how to spend and to provide funding for projects that you have described.” He endorsed Mr. Miller’s earlier remark that the agreement represents an effective model for other university towns on how to work together.
The agreement, which can be viewed on the University’s website www.princeton.edu/main/news/archive/S39/83/46G77/index.xml) passed unanimously.