School officials and Board of Education trustees in the Kingston City School District are growing increasingly concerned about the impact of PILOT agreements on the district.
A PILOT, or payment in lieu of taxes, is an arrangement between a developer and a municipal agency, such as an Industrial Development Agency,to pay some or all of the property tax revenue lost due to tax exempt ownership or use of real property. The subject of PILOTs was raised at a meeting of the Kingston School Board held on Wednesday, November 16 over concerns about a potential PILOT agreement between the City of Kingston and Pennrose, which is seeking to construct a seven-building, 164-unit intergenerational residential community on a 20-acre property that formerly housed the Ulster County Jail on Golden Hill Drive.
The residential units would serve low income families and individuals, and Pennrose is partnering with Family of Woodstock to provide 26 units of housing for domestic violence survivors and another 22 for frail and elderly people.
While School Board trustees stressed that they didn’t oppose the Golden Hill development or its community goals, they did share concern that the PILOT negotiations were illustrative of how infrequently school districts, which derive the lion’s share of their revenues from property taxes, are invited into the conversation. PILOT tax breaks for a project limit the revenue a school district gets for the property, thus spreading the tax burden throughout the rest of the taxable property.
Trustee Suzanne Jordan said the Legislative Action Committee had recently held a meeting entirely dedicated to PILOT agreements and acknowledged that it is a complex issue.
“We agree that the Board wants to support community development and we don’t want to give the impression that we’re not in favor of development for adequate housing and businesses,” Jordan said. “But we are caught between a rock and a hard place as a school district because we don’t have the opportunity to say, ‘You 50 children, sorry, we don’t have room or programming for you,’ unlike a city or municipal organization who could say, ‘Well, we’ll put off black topping that road this year.’”
Jordan said that there was little recourse for school districts if they aren’t explicitly included in a PILOT agreement
“We want to advocate in a positive way for schools being treated a little differently in terms of the PILOT process,” she said. “But we also, looking forward, feel that we don’t want to burden other taxpayers with what our taxes have to be, the way they’re formulated…if the city is not going to try to consider the burden on school taxes, we feel that we really need to advocate that there be either a different formulation in terms of the schools or perhaps a cap on what the schools could participate in a pilot.”
Fellow trustee Herb Lamb said he was concerned that the Common Council might grant a PILOT for the Golden Hill project at its meeting on Tuesday, December 6 without the Board of Education having a chance to officially seek input. The next meeting of the KCSD School Board isn’t scheduled until Wednesday, December 14.
“I wonder if there’s a way that we can speak out and ask them to at least slow down and give us a chance to digest and figure out what this is going to truly do to us and if we can adjust it so that it does not hurt program, buildings and…positions,” Lamb said.
Jordan said that while negotiations between a developer and a municipality aren’t necessarily within a School Board’s purview, there is still an obligation to ensure the district’s concerns are heard.
“We do have a responsibility to try to advocate for our taxpayers and for our school district,” Jordan said. “So I don’t know if people just want to mull on that or call their alderman.”
Two days later, KCSD Superintendent Paul Padalino said he expected the School Board’s Legislative Action Committee would continue working on communicating their PILOT concerns and would have a press release ready sometime in the next month. Like trustees, Padalino stressed that it was less about the proposed Golden Hill project than how PILOTs work as a whole.
“It’s complicated,” Padalino said. “And we want to try to find a way to communicate with people why we are against certain PILOTs and what it means to them as the taxpayers.”