Incumbent Roger Martindell and newcomer Jo Butler, both Democrats, won seats on the Borough Council, and Democrats Liz Lempert and Lance Liverman both won reelection to the Township Committee. They all said that the University’s financial contribution would be an important issue during their terms, along with other local economic concerns, including cutting expenses from municipal budgets and this year’s property revaluation.
As a nonprofit educational institution, the University does not pay local property taxes. However, the University makes a voluntary payment in lieu of taxes, known as a PILOT, to both Princeton Borough and neighboring West Windsor Township. No such agreement currently exists with the Township, but Lempert said in an e-mail that she supports current Township negotiations for a PILOT arrangement with the University.
Under its agreement with the Borough, in which most of the main campus is located, the University paid roughly $5.1 million in taxes and sewer fees, as well as a voluntary payment of roughly $1.2 million, in 2009. The current agreement will expire in 2011.
Under a similar agreement established with West Windsor in 2009, the University makes a voluntary payment of $50,000 in addition to paying $900,000 in taxes.
Kristen Appelget, director of community and regional affairs, said that the University has opened negotiations with Princeton Township to “discuss matters related to taxes and contributions made by the University.”
While elected officials universally agree that the University’s contributions should increase, they have proposed different ways of assessing a fair amount. The University has argued that it already pays a significant amount and that its campus resources contribute to community life.
Liverman said in an e-mail that the University should contribute an amount equal to the costs of services that the Township supplies to the University.
Martindell went further, arguing that the University should contribute to the municipalities “as it would were it taxable.”
Borough councilman Kevin Wilkes told Bloomberg News in June that the University would pay roughly $28 million in additional taxes if all of its property were taxable.
Butler said a task force should be established to examine contributions made to local governments by other colleges, universities and possibly boarding schools. This information would be combined with an assessment of University costs to the municipalities to determine the appropriate contribution.
“Princeton University is fortunate to reside in such an idyllic community,” Butler added.
The University stands by its current approach.
“The reason universities are tax-exempt is so that we can devote all our resources to advancing our missions of teaching and research,” Appelget said. “We have a great stake in the health and well-being of the community, but we also have a fiduciary responsibility to use funds donated to the University for their intended purposes, which are to support teaching and research.”
Appelget cited an economic study conducted by an independent consultant in 2008 that showed that the University provides a $1 billion economic impact across the state. This includes a “major economic impact in our local communities” through job creation and direct spending, Appelget said.
The University also argues that it, too, was affected by the recession. “The University has gone through significant budget reductions in the past two years as a result of the financial crisis,” Appelget said. “However, our voluntary contributions to the Princeton community have remained constant, and have even in certain cases increased, during this time when we have had layoffs, delayed construction projects and reduced funding for programs across the campus.”
A recent task force in Boston recommended that nonprofit organizations, including educational institutions, should make PILOT payments of 25 percent of the amount at which they would be assessed if they were not tax-exempt.
Harvard contribute $4.14 million to Boston and Cambridge, Mass., in 2009 under its PILOT agreements, and Yale voluntarily contributed $9 million to New Haven, Conn., in 2009.
In addition to negotiating the PILOT agreement, the politicians said that controlling local property tax increases is a major concern.
Liverman explained that some residents’ property taxes have increased 20 to 35 percent in recent years, amounting to thousands of dollars.
These increasing taxes have meant that some residents had to consider moving out of the area, Butler said. “I found it heartbreaking to hear the stories of long-time Borough residents who fear they will be forced to leave Princeton because of rising property taxes,” she added.
Martindell noted that the most difficult part of the election process was dealing with “free-floating” anger from residents as a result of the property revaluation that the Borough and Township are conducting this year.
The recently elected council and committee members have proposed various other initiatives to combat some of Princeton’s economic concerns.
Butler said she would “look for ways to hold Borough spending at a level that will not increase taxes, whether that is through shared services or consolidation with the Township.”
Liverman proposed several strategies, ranging from working with residents who can no longer pay their property taxes to having the Township rather than private contractors perform road repairs.
Martindell summarized his key goals for the next few years — “more shared services with other governments, more contributions from nonprofit institutions such as Princeton University and reduced expenditures” — in the phrase “smarter government.”
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