Princeton is getting a tax cut! Hooray!!! Consolidation IS working. But despite the municipal savings that came from consolidation, Princeton taxpayers are still facing a hike in their tax bills in the medium-term. How can this be? One problem is that everybody seems to want more money. Mercer County recently passed a budget that envisages stiff tax hikes for prosperous areas like Princeton. The Public School system wants more money too. The County and School system account for around 75% of our tax bill, so if they demand more money, then it ends up costing us, even if we are able to realize municipal savings from consolidation.
Closer to home, our much-loved library is also asking for more money. We are left staring at a huge bill for our services, and that leaves many of us with sticker shock. To make matters worse, Princeton has fewer things to tax these days. We recently learned that the total value of ratables in Princeton has decreased. That means that we have fewer sources of revenue, but a larger bill to pay. What is to be done?
We have choices. One is to pass the expense onto local residents, in the form of higher taxes. This is unacceptable. We already pay very high taxes here in Princeton. They are a major burden to local residents. Another possibility is to slash services, for example, only open the library one day a week, or make residents have to pay for trash pickup. This is also unacceptable to most of us. In Princeton we value our municipal services and quality of life. A third possibility is to grow the revenue pie by finding new things to tax. This means allowing new economic activity in Princeton that can be taxed. Robbinsville township recently secured a $14 million revenue jackpot by allowing a new Amazon distribution center to open there. Not only will this revenue offset local taxes, but it also offers the possibility of local residents benefiting from expedited Amazon shipping times, possibly to include same-day shipping.
At Walkable Princeton, we see tremendous advantage in finding new revenue sources that will allow us to pay our bills without forcing Princeton residents to pay ever-increasing tax bills. New development should be encouraged around our downtown area, which would provide new tax ratables. People want to live in Princeton, so why not let them live here, and benefit from the extra property taxes? Right now, this policy is being tested at the former hospital site. Princeton University Medical Center is still paying taxes on the land at their now-vacant former home at Witherspoon Street. That is likely to change, as they struggle to find a developer that is able to revitalize the site. If the site goes undeveloped, it will be a drain not just on the finances of the Medical Center, but on all of us, as the lack of tax revenue is passed on to everybody else.
The former hospital site is zoned for 280 residential units. We think this is a good idea, because Princeton needs homes, especially affordable homes, and these new homes would be walkable to Princeton jobs and services. Other residents have demanded a lower-density use for the site, involving fewer units. From a tax perspective, this is entirely misguided, because reduced housing at the site will give us reduced tax revenues, quite the opposite of what we need right now.
Princeton could balance its budget and provide homes that people desperately want in central Princeton by allowing more development on selected in-fill parcels around the downtown area. Apart from the hospital site, there are several other obvious empty and under-developed locations, where some degree of development would allow us to reap a revenue benefit and fight back against a seemingly-never-ending increase in expenses. We must remember that when we say ‘go build somewhere else’, we are throwing away a chance to find the revenue we need to limit our tax bill.