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New Jersey lawmakers are weighing changes to tax abatements that for more than 30 years have sparked waves of development in cities and suburban communities alike.

So-called payment-in-lieu-of-taxes, or PILOT, agreements have made way for affordable housing projects in arrangements that bring flexible revenue to local governments. They're used extensively in cities like Newark and Jersey City, as well as many smaller towns. But they've also increased the portion of the property tax burden for local schools that’s borne by the owners of existing properties, even with many districts grappling with financial crises.

A state senator from Burlington County is hoping that after years of schools around the state turning to tax increases, cuts that affect their students or both, there's momentum to let districts take some of the immediate financial benefit from PILOTs. It's one of multiple proposals for funding reform among state leaders, even as first-year Gov. Mikie Sherrill pushes for an increase to schools aid overall that critics argue has lopsided benefits for some districts, leaving others without relief because of the state's formula for divvying up the money.

PILOT agreements give developers property tax exemptions on new projects, and in exchange, developers pay the local governments annual fees, which are typically calculated based on developers' revenues. Municipalities then use that revenue to pay for local services like police and fire departments, as well as infrastructure investments that serve the new projects.

The PILOTs save developers on what they would otherwise pay in taxes but are temporary, lasting up to 30 years in most cases before a building returns to the tax rolls. They're often seen as win-wins — the developer gets an incentive to build now, and the tax base increases overall in the long run.

Existing state law for PILOT agreements calls for 95% of revenues to go to municipalities, with the remaining 5% going to county governments. But in New Jersey, school districts are their own government entities separate from municipalities or counties. The law has no mandate to provide local school districts with any revenue from PILOT agreements.

Some municipalities, like Woodbridge, Hoboken and Princeton, work out their own agreements with local school districts to share PILOT revenue, but that’s not required.

A bill sponsored by state Sen. Troy Singleton would change state law to ensure school districts get a cut of revenues from PILOT agreements. For residential projects, a district’s share would be based on the number of school-aged children living in the development. For nonresidential projects, districts would receive 5% of PILOT revenue.

“The bill ensures that schools are not unintentionally left behind,” Singleton said.

The bill passed unanimously out of the Senate Community and Urban Affairs Committee, which is chaired by Singleton, in February. That’s the first hurdle of a legislative gauntlet the measure faces and matches the farthest any previous version of the bill has advanced.

Tim Purnell, president of the New Jersey School Boards Association, said his organization supports Singleton’s bill.

“We're just guaranteeing our future, which is our kids, have a piece of the pie,” Purnell said of the bill.

He said giving schools a cut of PILOT revenue also would help drive down pressure to keep raising property taxes – a red-hot topic in New Jersey, where nation-leading property taxes average more than $10,000 per household. In most communities, school taxes are the largest portion of a property tax bill.

“It's easy for residents to blame schools for high taxes, right?” Purnell said. “If you require a portion of the tax abatements to go to the school districts to reduce the tax levy, it will reduce the overall property tax burden on you and me. On residents.”

Fears of slowing growth

The New Jersey League of Municipalities argues, though, that local leaders will offer fewer lucrative tax breaks to developers if they have to split the returns among more parties. All 564 of New Jersey's municipal governments are members of the association.

“ This will have a critical adverse impact on the economic development assistance due to environmental contamination, site conditions, and extreme blight, or which have smaller returns – for example, the construction of affordable housing,” Lori Buckelew, the league’s deputy executive director, said at a committee hearing on the bill in February. “In authorizing PILOT agreements, municipalities determine that the project would not be built if not for that PILOT. A significant increase in the amount of PILOT a project pays reduces the possibility that project will be built at all.”

Builders also have voiced concerns the bill would cause municipalities to offer PILOTs less frequently. Jeff Kolakowski, the CEO of the New Jersey Builders Association, said the state’s push to build more affordable housing could be threatened by any changes to tax abatement laws.

“ The reason why a lot of those projects need PILOTs is because they're asked to subsidize and have set-asides and deed restrict their properties and only sell them at limited price points,” Kolakowski said at the same hearing. “They build those properties at a loss. So they need to make up the revenue somewhere else.”

Singleton said he “fundamentally disagrees” with the opposition’s concerns.

“This has no impact on development,” Singleton said. “Developers will pay no more than what they would ever pay under a PILOT, as negotiated by the municipality. What does change is the distribution to the same taxpayer.”

Jersey City schools strained

Few places have generated more conversation around tax abatements and school funding than Jersey City. It has 159 PILOT agreements currently on its books. The city took in roughly $95 million from those agreements in 2025, according to budget documents. If those properties had paid regular local property taxes, they would have generated more than $222 million.

PILOT revenue impacts on local schools have been a hot topic in Jersey City for the past decade. As school funding reforms dominated state politics in 2016 and 2017, then-state Senate President Steve Sweeney, a South Jersey Democrat, derided Jersey City schools as being overfunded by the state, arguing the city should contribute more.

In April 2017, then-Mayor Steve Fulop signed an executive order dedicating 10% of all future PILOT agreements to Jersey City schools.

But that revenue sharing never happened. Nathaniel Styer, a spokesperson for current Mayor James Solomon, and Norma Fernandez, the superintendent of Jersey City Public Schools, both said Fulop’s executive order was never implemented; neither could explain why. The result is the 42 PILOT agreements entered into by Jersey City after the order was signed do not require revenue be directed to the city’s schools.

In the years since, Jersey City schools have lost nearly $300 million from the state as legislators changed the formula for state aid to reflect growth in a city’s tax base. The city’s school district raised its tax levy in response, contributing to surging local property taxes that have increased roughly 45% over the past five years. And those taxes will rise again this year, with the school district increasing its levy, the county expected to do the same, and the city facing a $255 million shortfall.

Fernandez said if the schools were getting some of the city’s PILOT revenue, the school tax increases wouldn’t have been as steep.

'It's never enough' — Newark's balancing act

Newark also relies heavily on PILOT deals to drive its redevelopment and encourage affordable housing, said Allison Ladd, Newark’s deputy mayor of economic and housing development. That’s because Newark local laws have inclusionary zoning rules that require projects getting tax abatements to provide at least 20% of their housing units at affordable rates.

Ladd said those local rules combined with the PILOT deals are key reasons there are almost 1,000 affordable housing units currently under construction in Newark.

“We have to provide, sometimes, these incentives to make sure that it actually works,” Ladd said. “Because it's real estate, and real estate is a business decision in the long run.”

Newark has no plans to back off using tax abatements, Ladd said.

“ If we scale back, even though some developers may continue to do the work that we're talking about, they also may not,” Ladd said. “We really want to make sure our development is downtown, is in our neighborhoods, and is both mixed income and affordable for seniors and for families.”

Newark’s city government does not have arrangements in place to directly share PILOT revenue with the city’s schools, but Ladd said city leaders work with school district leaders and the state School Development Authority to get new schools built and existing ones renovated around Newark. And in some cases, projects benefitting from PILOT agreements may include space for schools.

“Like with all funding sources that come from another funding source, like in this case PILOT revenue, it's never enough,” Ladd said. “ We're looking at it, I think, from a holistic standpoint. Sometimes the dedication is just not enough. But we work hard to use those partnerships.”

How some schools benefit now

Some communities have been proactive in sharing PILOT revenues with their local schools. Woodbridge, a suburb of more than 100,000 people in Middlesex County, has been aggressive both in using PILOT deals to bring new development, and in using the money collected from those deals to help the local schools.

Woodbridge Mayor John McCormac, who formerly served as state treasurer, called PILOT revenue a windfall for the township because the bulk of projects getting the tax abatements use few local services. McCormac said he doesn’t think PILOT deals harm school finances, because the school districts are able to raise taxes to fill out their budgets as needed, and he argues that having PILOTs drives down the municipal share of property taxes and mitigates the burden of the school share.

But he said his administration tries to dedicate about 25% of the town’s PILOT revenue to school capital projects each year because doing so benefits the whole community.

“We want to share our good fortune with the schools, because even though they’re not hurt, they should share in our success,” McCormac said.

This column originally appeared in On The Way, a weekly newsletter covering everything you need to know about NYC-area transportation.

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The Bronx just can’t catch a break.

A new analysis published this week by Columbia University researchers found that air quality has worsened in parts of the South Bronx near highways since the MTA’s congestion pricing program went into effect in early 2025.

The pollution uptick in the Boogie Down was predicted four years ago in the transit agency’s environmental review of the Manhattan tolls, which warned that truck traffic in the borough could increase as drivers circumvent the congestion charge.

But the new study, which is still undergoing peer review, shows for the first time that the tolls may be harming some of the city’s poorest communities.

The Columbia researchers analyzed two years of data from 19 air quality sensors around the Bronx. Four of those sensors, which were near expressways, “exhibited significant increases” in fine particulate matter, according to the study. Two others, including one in a community garden, saw decreases in pollution. The remaining sensors didn’t clock a significant shift in air quality.

The findings add a wrinkle to a Cornell University study released last year, which found that overall air pollution in the New York City region dropped as a result of the tolls.

“We knew this data was going to be hard to hear,” said  David Rosales with the group South Bronx Unite, which has partnered with Columbia University for a decade on air quality research. “Since congestion pricing, air pollution in our community has increased, statistically significantly increased, according to the data.”

The risk of additional air pollution in parts of the Bronx hits hard: The borough’s residents suffer from some of the highest rates of asthma in the country.

After Bronx leaders raised concerns over the tolling program’s potential effect on air pollution, the MTA pledged $70 million in mitigation measures for the borough. The agency provided funding for things like asthma programs and the electrification of diesel-burning refrigeration trucks at Hunts Point Produce Market.

Those initiatives are still being rolled out while the study shows the South Bronx’s air pollution has worsened.

“Mitigation can't be adding a Band-Aid onto a wound that's already infected,” said Rosales. “Right now, people in the South Bronx can't breathe. They're going to the emergency room because of asthma. And so mitigation, in our opinion, doesn't justify burdening our community.”

The drop in air quality is the latest slight to Bronxites.

Subway riders in the borough were miffed last year when they learned the MTA had allocated more than $10 billion to modernize aging subway signals, but none of the upgrades would come to Bronx tracks.

The MTA also snubbed the Bronx four years ago by declining to extend the planned Interborough Express line there, a longtime goal of regional planners.

The MTA’s Penn Access project, which aims to bring Metro-North service to Penn Station along with four new stations in the Bronx, is years behind schedule due to a scheduling feud between the New York transit agency and Amtrak.

MTA officials noted that since congestion pricing went into effect, daily traffic on the Major Deegan and Cross Bronx expressways declined by nearly 10,000 and 11,000 vehicles, respectively. They also blamed last year’s Canadian wildfires for worsening air quality.

The congestion tolls are a boon for the city's transit system. The revenue from the program finances $15 billion in MTA infrastructure upgrades, including the addition of several new elevators at Bronx stations.

MTA Chair Janno Lieber pointed to the program’s positive effect on the city’s overall air quality, and said he was working to help address the air quality concerns in the South Bronx.

“Reducing air pollution has always been one of the core goals of New York’s congestion pricing program,” Lieber wrote in a statement. “The data shows it’s already succeeding, and now we’re taking the next step by using revenues to fund additional improvements for Bronx residents.”

Eric Goldstein, an attorney with the Natural Resources Defense Council, said the findings pushed by the MTA and the Columbia researchers can both be right.

“The overall story of congestion pricing is such an affirmative one in terms of air quality, congestion, pollution and health of the mass transit system,” said Goldstein. “But that doesn't mean that there might not need to be some small mitigation measures added to the South Bronx if in fact it turns out that there are some additional pollution burdens that can be traced back to diversion of traffic through congestion pricing's program.”

NYC transportation news this week

The “super speeder” crackdown. New York Assembly Speaker Carl Heastie said state lawmakers have agreed on a deal to require the owner of any vehicle that racks up 16 or more speed-camera tickets in 12 months to install a speed-limiting device in their car. This so-called super speeder measure is expected to be included in a final state budget agreement, which is now five weeks late.

One train from New Jersey to Long Island? The federal takeover of the Penn Station renovation project is opening up the possibility of creating a unified regional transit system.

Free buses for all vs. discounted transit for the needy. The nonprofit Citizens Budget Commission says in a new report that the money required for Mayor Zohran Mamdani’s free bus plan would be better spent expanding fare discounts — on buses and subways — for low-income New Yorkers.

PATH fare hike. The cost of a single ride went up this week, from $3 to $3.25. Bundles of 10 trips, 20 trips or 40 trips on TAPP cards will also cost more, increasing from $2.85 per ride to $3.10.

Now-empty Spirit Airlines terminal. What will happen to LaGuardia Airport’s Marine Air Terminal, the Art Deco masterpiece that security line haters appreciated for its dainty size?

Pedicab enforcement. Midtown business groups are pushing for an overhaul of the city’s pedicab industry in order to protect tourists from being ripped off.

Is Mamdani the city’s first “bike mayor?” He’s not only pushing to expand the city’s network of protected bike lanes — the 34-year-old democratic socialist has also made biking around town a seemingly genuine part of his political identity.

Curious Commuter

Have a question for us? Use this form to submit yours and we may answer it in a future newsletter!

Question from Colin in Brooklyn

If I don't have a credit card (or have maxed out my accounts!) but I do have $3 in cash, can I take the train? How does that work now that the MetroCard is gone?

Answer

If you have a physical OMNY card, you can load it up with cash at the new vending machines inside subway stations or at the MTA’s retail partners. The MTA is currently selling physical, reloadable cards at machines for a $1 surcharge. So to ride the subway, you’d need $4. The machines also sell single-use fare cards for $3.50. The long and the short: You’ll need a couple of quarters on top of your $3 cash if you’re paying for a single fare.

Mother's Day in Manhattan's Chinatown and the Lower East Side will be busier than usual this year.

Paramount Pictures is staging a film production with military vehicles and prop weapons in Lower Manhattan throughout the day, according to public notices.

People could be stopped on the sidewalk during stunt sequences. There will be traffic diversions at the busy intersection of Bowery and Canal Street, complicating access to the Manhattan Bridge.

A second shoot will happen at the Brooklyn-bound outer roadway, pushing Brooklyn-bound traffic to the lower roadway for at least three hours. And Paramount will hold parking on more than a dozen blocks.

The shoot is scheduled for Sunday from 4 a.m. to 8 p.m., according to the notices, which were posted in English and Chinese on lampposts across the affected blocks.

Separate towing warnings list the name of the project as “Little Falls.” A listing on castingnetworks.com describes the production as a feature film and seeks “military types” for the Mother’s Day shoot.

The plans have drawn concern from some Chinatown residents, who say they were caught off guard by the timing and wartime imagery on a holiday when families typically gather at neighborhood restaurants.

Paramount Pictures did not immediately respond to a request for comment, nor did a locations department contact listed on the flier.

Under city rules, notices for filming don’t go up until about 48 hours before filming. That's meant to help minimize the chance that a shoot will draw larger crowds, according to the Mayor’s Office of Media and Entertainment.

The agency coordinated closely with the production, community stakeholders and city agencies for months to “minimize disruption and ensure the operation is conducted safely and responsibly,” Commissioner Rafael Espinal said in a statement.

“The production has also worked with several local Chinatown businesses and organizations directly as part of the shoot,” Espinal said. “Film and television production supports thousands of New York City jobs and small businesses, and we remain committed to balancing that economic activity with the needs and quality of life of local communities, including being mindful of production concentration in heavily impacted neighborhoods.”

Still, some residents said the plans weren’t well communicated — and they aren’t happy about it.

Susan Lee, a Chinatown community activist and a former candidate for City Council, said she first learned of the shoot Wednesday night through an Instagram post from Explore Chinatown.

She began posting about it on social media and said she heard from neighbors and small business owners who were frustrated by the timing. Lee said three friends told her they were rescheduling Mother's Day plans because of the shoot.

“One of my friends said it best: ‘What, Chinatown has no mothers?’” Lee said. “Why are they doing this on Mother's Day?”

She said she's worried the parking disruptions would hurt local businesses and the military imagery would startle seniors who likely haven’t had more advance warning about the filming.

Lee connected Gothamist with other residents, including a longtime Chinatown physician and a member of a local block association, who shared similar concerns.

Dr. Wah Lee, a physician who has practiced in Chinatown for nearly 20 years and is unrelated to Susan Lee, said he saw the notices outside his building Thursday morning, three days before filming.

He said he and his neighbors are accustomed to film crews using the iconic neighborhood as a backdrop — "Law & Order" shoots regularly nearby, he noted — but the wartime imagery gave him pause.

“I have treated patients that have, you know, gone through World War II, and people from the Vietnam War,” he said. "If they're not sure what's going on, they look out the window and they see a bunch of soldiers and a tank rolling down the street, I'm just concerned for their health and wellbeing."

He also questioned the timing. Families, he said, typically gather at neighborhood restaurants on Mother’s Day, but filming can make getting around difficult.

“They have stop-and-go measures, but I also know that sometimes when they shoot a scene, they can be shooting that scene for quite a while,” the physician said. “The only way to get around there is to really circle an entire block.”

That’s a challenge when you’re walking with “your elderly mother out on a rollator,” he said.

Dorina Yuen, a member of the Elizabeth Broome Block Association, which represents residents near the border of Chinatown and Little Italy, said she also learned about the shoot on Thursday, when it became a topic in her community group chat.

Yuen questioned whether production had given enough notice to a broad enough range of community contacts.

“We're not just a tourist destination but densely populated residential areas,” she said. “For Paramount to close off these major thoroughfares on a weekend is more than enough of an insult, but to do so on Mother's Day … is really a point of disrespect.”

The wartime imagery was particularly troubling, she added, on a day when “families are trying to celebrate happy moments.”

Parking will be held on stretches of Bowery as well as Canal, Elizabeth, Hester, Chrystie, Grand, Broome and Delancey streets, according to the notices.

The first scene is set for Bowery and Canal, with traffic diversions in place. Brooklyn-bound traffic on the Manhattan Bridge's outer roadway will be diverted to the lower roadway between 3 p.m. and 6 p.m. for a second scene.