By Victoria Hurley-Schubert, Staff Writer
If a tax exemption challenge is successful, the $2.2 million in additional tax revenue would double what the university currently voluntarily contributes with a payment in lieu of taxes (PILOT).
”It’s pretty clear to me that most of these properties are outside of the academic function,” said Bruce Afran, attorney for the plaintiffs. “I don’t think it matters because the university has said it will not renew the PILOT because the borough wouldn’t give it a zoning variance for its arts project. The university is holding the PILOT over the borough’s head. That’s not a gift if one is using it as blackmail to compel the zoning board to pass a variance.”
”If they’re going to use their gift in lieu of taxes as a weapon, then it’s not much of a gift,” said Mr. Afran. “We’re far better off with getting some commitment legally to this additional money than to have to have the university use it as a weapon over the borough’s head.”
”I think the days of the PILOT are gone,” said Kenneth Fields, one of the plaintiffs in the suit. “It belongs to a kinder and gentler age. I think instead of the PILOT the university should be paying property tax on a number of its buildings and that’s where the contribution from the university will come from.”
”We believe the lawsuit is without merit and will not be successful, but if it does increase our tax payments then that would affect the level of voluntary contribution we would be willing to make,” said Robert Durkee, vice president and secretary of Princeton University. “We will not want to make any long-term commitments regarding our voluntary contributions until after the lawsuit is resolved.”
This year, the university contributed $1,180,496 to the borough budget with its voluntary payment that was part of a six-year agreement.
”We believe that our current level of contribution to the borough is very generous compared to where it was a decade ago, and as a proportion of the borough’s total tax collections it is much more generous than any of our peers. It is one of the very few budget items we did not cut in trimming our budget by $170 million over the past few years,” said Mr. Durkee, who also said the university contributed $500,000 to the township this year. “We believe our contribution to the township is generous when added to the substantial number of potentially exempt properties that are kept on the tax rolls in the township.”
University funding comes from three sources: grants, tuition and gifts, said Mr. Durkee.
”It is important to remember that every dollar that comes to the university comes with the expectation that it will be used to support the university’s exempt purposes of education and research,” he said. “We have long believed that our educational mission is served by being located in a thriving and diverse community, so we are justified in keeping some properties on the tax rolls that could be exempt and making voluntary contributions, but our justification for these payments has to be that they are serving our educational mission and they have to be at a level we can justify to our students and their families who pay tuition and to our donors.”
The borough will also have to spend some dollars defending itself in the suit, since it is the taxing agency, said Maeve Cannon, borough attorney.

