Planet Princeton

Princeton University slated to pay residents first installment in tax settlement this fall

Seven months after Princeton University and a group of residents who challenged the school’s property tax exemptions reached a legal settlement, no money has been distributed to homeowners.

Under the agreement, which was reached in October of 2016 just a few days before the trial was set to begin, the school agreed to help lower-income Princeton residents pay their property tax bills for six years. The school agreed to contribute $2 million in 2017 and then $1.6 million a year for the following five years to a fund that will distribute annual payments to Princeton homeowners who received a homestead benefit under the New Jersey Homestead Property Tax Credit Act.

For the last few months, homeowners who qualify for the benefit, many of them senior citizens on fixed incomes who have been struggling to pay their property taxes and stay in Princeton, have been wondering when they will receive a payment.

Details regarding how the payments will be made are still being worked out.

“We and the plaintiffs are still trying to identify an appropriate entity to administer the fund,” Princeton University Vice President Robert Durkee said in an email.

Resident Ken Fields, a plaintiff in the case and a trustee for the Eleanor Lewis Trust, said the first distribution of funds was always slated for October of 2017.

“Whoever distributes the funds must have non-profit status and must have sufficient administrative wherewithal, so there were a few false starts, even though their costs would indeed be covered as part of the settlement agreement,” Fields said. “People should receive their money in October, as planned.”

Under the agreement, the 2017 distributions will establish a maximum amount per household, and any excess after making all eligible distributions will be donated to 101: Inc., a non-profit organization that provides need-based scholarships for graduates of Princeton High School attending post-secondary educational institutions other than Princeton University.

The university also agreed to make three contributions of $416,700 to the Witherspoon Jackson Development Corporation each year from 2017 through 2019 to be used to support housing and related needs of economically disadvantaged residents in the Witherspoon Jackson neighborhood and elsewhere in Princeton. The money for 2017 also has not been distributed yet.

“Under the terms of the agreement, funds cannot be distributed to the Witherspoon Jackson Development Corporation until certain documentation, as described in the agreement, has been provided,” Durkee said. “That documentation has not yet been provided, so no funds have yet been distributed.”

The university also agreed to make a $3.48 million annual voluntary contribution to the town of Princeton in 2021 and again in 2022, the same amount it is scheduled to contribute in 2020, the final year of the University’s current seven-year agreement with the municipality. The school’s voluntary payment agreement with the town remains fully in place through 2020. That agreement includes an annual increase of 4 percent.  The agreement with the town does not extend past 2020, but under the settlement agreement, the university agrees to make the 2020 contribution again in 2021 and 2022.

Under the agreement between the plaintiffs and the university, the plaintiffs agreed to withdraw their pending complaints for tax years 2011, 2014, 2015 and 2016. As part of the deal the plaintiffs agreed that the settlement”is not to be construed as an admission that any of the university’s exempt property should be subject to taxation,” and they agreed that the settlement “aligns with the university’s commitment to supporting the affordability and socioeconomic diversity of the Princeton community.”

The full agreement is private, Fields said. As part of the agreement, the university also paid the legal fees for the plaintiffs, who were represented by Princeton lawyer Bruce Afran. Neither the university nor the plaintiffs are disclosing how much Afran was paid by the university. Durkee referred questions about the plaintiff’s legal fees to the plaintiffs. Fields declined to disclose the dollar amount, saying neither Afran nor the university want the payment amount to be made public.

Krystal Knapp

Krystal Knapp is the founding editor of Planet Princeton. She can be reached via email at editor AT planetprinceton.com. Send all letters to the editor and press releases to that email address.

  • Ernst Goldman

    That’s PU’s way of showing middle finger to middle class taxpayers. This way they are off the hook from the nuisance of going thru the trial, while scoring some points to placate leftist “social justice” crowd, while making sure none of despised middle class taxpayers will get any benefit from this gesture. From this arrogant Ivory tower perspective – A Trifecta.

  • Dennis

    Why is the money being disbursed to selective citizens? Put into the general fund and have it relieve everyone’s tax burden in this overtaxed community. Just watch, half of the money will end up going to administrative costs, not citizens.

  • Pat Palmer

    Does anyone know the criterion for deciding which households get tax relief?

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