A wide-ranging discussion at the Sept. 24 East Brunswick Board of Education meeting put a growing local issue under the microscope: how PILOT agreements affect school funding, taxpayers and a district already confronting new development and redistricting.
For more than 20 minutes, board members questioned how payments in lieu of taxes work, where the money goes and what happens when families living in PILOT developments send children to East Brunswick schools.
Under a PILOT, the Township collects a negotiated service charge instead of ordinary property taxes on the improvements. The school district still raises the money in its approved levy. That led to a more complicated question at the meeting: if a PILOT property is outside the conventional tax base, who ultimately carries the school-tax burden?
It is also a question that has entered the 2026 Township Council campaign. Candidates began raising PILOT revenue, development and school funding publicly before the Sept. 24 meeting and returned to the issue during public comment that night.
The Board’s discussion, however, went beyond the campaign arguments. Its attorney and business administrator explained how the money actually moves, board members questioned what that means for families and taxpayers, and District Walk provided an unusual East Brunswick example: a 30-year PILOT on homes that will be sold from the developer to individual homeowners and potentially resold again during the life of the agreement.
An issue in the council race, too
When the Township Council took up the Brunswick Square redevelopment plan on Sept. 14, PILOTs and the schools were already part of the council campaign.
“The idea of pilots is not that popular. Indeed, money is being taken away from the school district,” Vincent Le Blon, a retired Superior Court judge and former council president who is running for Council, told the Council that night. That is Le Blon’s characterization; how PILOT money actually moves is explained below.
Township officials addressed the issue at the same meeting. Mayor Brad Cohen, who is not on the ballot, said “the school always gets its levy” and “the cost of that pilot gets divided among everybody else.” He added: “For anybody to stand here and say that the schools are shortchanged from pilots is factually not true.” He also said PILOT money can go only to school capital projects, not “ongoing expenses.” Township Attorney Anthony Iacocca said school contributions are among the items negotiated when a developer brings a project to the Redevelopment Agency.
Ten days later, after the Board’s own discussion, Le Blon and his running mates spoke during public comment at the school board meeting.
Le Blon said residents “deserve a precise accounting of the pilot revenue and a clear explanation of how municipal resources may legally support public schools.” He cited a state statute that he said lets the Township transfer surplus funds to the school board, a reading Eyes on EB has not confirmed.
“Where legally and financially appropriate, we should explore using pilot revenues to support eligible school capital needs,” said Mina Abdo. Girish Vazirani called for “a guaranteed sharing of revenue when these projects are approved.”
What the Board heard
The Board’s discussion, which opened a new standing agenda item for community questions, laid out the mechanics.
Board Attorney Matthew Giacobbe explained the basic rule: “95% of it goes to the municipality, 5% of it goes to the county. That’s under law … There’s nothing in the pilot law that says that the schools get anything.”
School Business Administrator Joseph Crotchfelt described what that means in practice. The district still raises its levy, he said, but when property is under a PILOT, that levy is spread across the properties paying ordinary taxes. “The impact is to the individual taxpayer,” he said, “whether you’re a resident or a commercial business in town.”
Board Vice President Dr. Wilbur Pan put it as a comparison between two similar families with children in the same schools, one in a conventionally taxed home and one in a PILOT development. If the Board raises its levy by the 2% the law allows, he asked, would the PILOT family’s payment change?
“Typically not,” Mr. Giacobbe answered. “That property is not part of your tax base.” He added, “Typically the pilot payments are less than an ad valorem tax.”
“Even though … they’ve got some kids coming to our schools, they’re not bearing the same burden for educating the students,” Dr. Pan said. “The burden on those two houses is not the same.”
Towns can choose to share PILOT money with their schools, Mr. Giacobbe said; one town his firm represents gives its district $1.3 million a year. East Brunswick has no such agreement on any record we reviewed, and a state bill that would require some sharing, S-1807, has sat in a Senate committee since Feb. 5. Board President Dr. Marianne Tanious reported that Board leaders recently raised “our concerns around pilots and their impact on schools” with Sen. Vin Gopal’s office.
District Walk: a PILOT that changes hands
Most people picture a PILOT as a deal with a developer that owns an apartment complex. District Walk, the roughly 218 condominium homes going up on Route 18 on the former Loehmann’s Plaza site, works differently.
These are for-sale homes. Under the Township’s financial agreement, Ordinance 25-37, and the state law it follows for condominium units, N.J.S.A. 40A:20-14, the tax treatment doesn’t stay with the Pulte affiliate that builds them. When a home is sold, the exemption “shall continue and inure to the Unit purchaser, and his or her respective successors or assigns,” and the owner pays the service charge directly to the Township. If that owner later sells, the next owner receives whatever years remain. The 30-year clock, which starts when each home is completed, does not start over.
Dr. Tanious put the effect in terms of students.
“Let’s say a family’s in a pilot program and has students in the school district. They live there for 15 years,” she said. “Another family can move in, another 15 years. So it’s two cycles of students that could essentially go through.”
At District Walk, Family A could buy a new home, sell it years later to Family B, which inherits the remaining years, and Family B could sell to Family C for the rest of the term. Not every home will change hands or house school-age children. But a 30-year PILOT on a for-sale home is attached to the property, not to one household.
The charge is based on the home’s sale price, not a tax assessment. The agreement assumes a 30-year mortgage for the full price at a rate tied to Freddie Mac’s national average, with a 6.5% floor, even if the buyer pays cash. Association fees are added in, and the charge is 10% of a year of those payments, plus a 2% administrative fee. A resale resets the calculation to the new price.
The agreement includes its own worked example: a $750,000 purchase, an assumed 7% rate and $325 a month in association fees produce an annual service charge of $6,377.72. That is the agreement’s illustration, not an actual homeowner’s bill. As of Sept. 21, Middlesex County Clerk records showed at least one District Walk sale in progress but no completed deed to an individual homeowner.
The break also shrinks. The charge must rise at least 2% a year from year six. From year 16 it can be no less than 60% of the ordinary taxes the home would otherwise owe, rising to 70% in year 21 and 85% in year 26. After year 30, the home is taxed like any other. A family that buys in year 20 inherits a much smaller discount than the first owner received.
As with other PILOTs, the District Walk service charge is split between the Township and the county. The East Brunswick Public Schools receive no direct share of the PILOT service charge itself. The land is handled separately: the agreement taxes it conventionally and credits those land taxes against the service charge. How that will work for an individual owner after a sale has not been established in any record Eyes on EB has reviewed.
Where the students go
The district is also redrawing elementary school boundaries, with a community committee forming, a presentation expected in November and a target of September 2027.
Mr. Crotchfelt explained why new housing matters even when enrollment barely moves. “Our overall enrollment has been kind of flat,” he said. “You’re up 40, you’re down 40 on 8,000 kids.” But “with some of these developments, those kids are going to go to a specific school. We’re not going to bus them to eight different elementary schools if they’re in one development.”
He pointed to the possible 250-unit project at Brunswick Square, which the district’s demographer did not include: “Those kids should be going to Irwin,” in “a community that has an explosion of development.”
None of this means District Walk, or PILOTs, caused the redistricting effort; the district cites uneven enrollment, long bus routes and program space. But new homes add students to particular schools however they are taxed, which makes housing, school capacity and taxation connected questions.
What’s still unknown
Still open: how land taxes and the land tax credit will work for District Walk owners after a sale, what an actual owner will pay, the development’s association fees, and how many students it will bring. The District Walk agreement also caps the exemption at a period it writes as “twenty-five (35) years,” a conflict it doesn’t resolve.
Eyes on EB previously examined the District Walk financial agreement in “At Vermella, 219 Townhomes Are Planned — and a 30-Year Tax Deal Comes With Them.” Quotes are from the school district’s video of the Sept. 24 Board of Education meeting and EBTV’s video of the Sept. 14 Township Council meeting, with timestamps linked; Eyes on EB also reported on the Sept. 14 meeting. The unit count is from the District Walk master deed recorded June 23, 2026; the Ordinance 25-37 agreement allocates 219.
