I want to say a few words about two major areas of concern before the Council this spring: Arts and Transit and the budget. For a moment, I would like to set aside the specifics of Arts and Transit and whether I think the change in zoning is a good idea or not. The larger question that concerns me is this: On January 31, the President of Princeton University appeared before the Joint governing bodies to make the case for the importance of Arts and Transit. As part of her presentation, she was quite clear that the PILOT payment, the roughly $1 million dollars the University contributes to our operating budget, was hanging in the balance and dependent on the outcome of the University’s request for a zoning change. I believe her words were carefully and deliberately chosen, but no one present that evening could miss the meaning. This was not the only time we have heard the message, and there has been no attempt to back away from the position. Give us the zoning we want, or risk losing the PILOT. And, in fact, even as we move forward with Arts and Transit, the negotiations for future PILOT payments have ceased.

There are some who would suggest that the PILOT is a mere fraction of what the University would pay if they did not have tax exempt status and, therefore, $1 million is an inadequate sum. Others like to say that the University has become an endowment with a University attached – that $1 million is a rounding error for University. Some challenge the tax exempt status of all the Ivies because they discriminate in their admissions process by granting preferential consideration to alumni children. All that may be true, but we must deal with this reality: Whatever $1 million is to the University, it is a critical amount to our operating budget.

I know people understand – but it bears repeating — that as a governing body we cannot ask a developer for money in exchange for a zoning change. And, it is well within the right of the University to withdraw their PILOT. It is a voluntary payment.

So here we sit simultaneously considering our budget and considering a zoning change that many people in our community feel very strongly about, and we do so with the sword of Damocles over our heads.

On the Council we have stated strongly our preference for a budget that will not increase taxes. (Jenny [Crumiller] and I founded CFAT in an effort to support a zero-increase budget.) But we have to accept the reality that there is a very real chance that the University will withdraw their $ 1 million, and when we started our budget discussion a couple of weeks ago, it became crystal clear just how damaging that would be to the financial health of the Borough. The other reality is that we have a 2% cap on property tax increases. If the University withdraws their PILOT, Bob Bruschi pointed out that it wouldn’t take long for our finances to be seriously compromised.

Those who support the Arts and Transit vision say, “So what? Give them what they want and everything will be fine.” Fine for them, perhaps for now. My informal poll indicates those people are usually not regular Dinky users, or walkers, and often have some tie to the University. But I would hope that those people would understand that while it may not be their ox being gored this time, it is only a matter of time until it is. How are we to make any decision that might remotely impact the University in a way that displeases them when they can simply threaten to withhold their voluntary contribution? I certainly wouldn’t stay in a marriage where every time my husband and I had a disagreement, my husband threatened a divorce. That isn’t a good partnership. We need a relationship where we can count on the University whether they are getting what they want when they want. As taxpayers, we certainly don’t agree with every decision the governing body makes, but we are still obligated as citizens to pay our taxes.

This is a particularly painful decision because if I had to guess, those most hurt by moving the Dinky, will also be those most hurt by the loss of the $1 million PILOT, because, sooner or later, that $1million will have to be made up in taxes, and we are all well aware of the shift in the tax burden that resulted from the revaluation. I find it curious that the University doesn’t care, but I don’t see any evidence to the contrary. The message is, “Buck up. What is another 41 miles a year?”

The University plans to create additional housing at the Merwick site and even more housing on Lower Alexander. Soon, nearly all the residents will owe their soul to the company store in one way or another. It isn’t much of a stretch to imagine a time when residents with ties to the University will decide who will serve as an elected official in this town. I won my primary by a scant 25 votes – not so many votes.

Regardless of what we decide regarding the Arts and Transit, it now occurs to me that we need to free ourselves from this sword of Damocles. My recommendation is that we do the work necessary to get our zero-increase budget for this year, and then – as painful as this is for me to say – I think we need to consider a “University tax.” Not a tax on the University, of course, but some small increase to our taxpayers that we can start to put away as protection against the threat of the withdrawal of the PILOT so that we can make decisions that are in the best interest of the community – whether they are also in the interest of the University – without feeling like we are doing so because we are in a financial squeeze. This isn’t some far-off, remote possibility. The President’s words were chosen carefully. This is a real threat, and I think it would be financially imprudent not to plan for the worse-case scenario because I think it is more of a possibility than we are admitting here tonight.