Beck responds to proposed tax on Red Bank nonprofits

RED BANK — N.J. Sen. Jennifer Beck (R-12th District) said she shares Councilman Michael DuPont’s concern that residents are shouldering a disproportionate tax burden because of the large number of nonprofits in the borough.

“I share your concern about the additional burden carried by the Borough of Red Bank’s citizens due to significantly higher than average number of not-for-profit organizations and tax-exempt properties,” Beck told DuPont in a letter dated April 8.

Beck said she spent time researching the suggestions contained in DuPont’s March 18 letter, which urged her to advocate for ways that would tax the borough’s not-forprofits or urge those organizations to enter into a payment in lieu of taxes (PILOT) agreement with the borough.

“While these ideas may remedy the situation, it would entail crafting a constitutional amendment, and could potentially be damaging to many charities and nonprofits that do so much good for our communities,” Beck explained in her letter.

Beck said organizations located in the borough such as Lunch Break and the Boys & Girls Club wouldn’t be able to sustain themselves and pay taxes.

“They can’t afford to pay,” Beck said. “They serve the neediest parts of our community, so we’re looking for a way to balance things, with larger organizations providing more.

“The tax-exempt properties don’t pay for the services they use,” Beck said. “We’re trying to figure out how to go about it equitably. We’re looking for the best methodology.”

In an effort to pursue this effort further, Beck said she met with Mayor Pasquale Menna last week.

“[The mayor] and I believe we have a potential legislative solution that will require a statutory but not a constitutional change,” stated Beck.

According to Beck, seeking a constitutional change would be a difficult process, with an unlikely outcome, because it would prompt much objection.

Beck explained that the bill would require a municipality to inventory current tax-exempt properties and require that in the case of any expansion of that property, the not-for-profit must enter into an in-lieu-oftax payment with the municipality.

“The Office of Legislative Services is confirming that in this instance only a statutory change would be needed,” Beck said. “This bill would exempt schools and religious institutions.”

During an April 6 interview, DuPont said $374 million of tax-exempt real estate in the borough is held by not-for-profits, which amounts to 16.6 percent of all real property in Red Bank.

“The net result is that Red Bank loses $1.7 million in tax revenue every year,” DuPont said previously.

DuPont said tax-exempt nonprofits are located on 182 parcels of land in the borough. Those properties include the Count Basie Theatre, Two River Theater, Visiting Nurse Association of Central Jersey, The Salvation Army, The Community YMCA, Lunch Break, KaBoom Fireworks on the Navesink, Parker Family Health Center, and a wide range of religious and educational organizations that serve a regional need at the Red Bank taxpayers’ expense.

DuPont feels that religious institutions, as well as emergency medical services, should remain exempt.

“Not-for-profits use public services and do not pay for these services,” wrote DuPont. “Cities and towns cannot give them away for free any longer.”

DuPont added that his suggested payment in lieu of taxes is subject to negotiation.

“There’s no state law requiring it, but it is state law that the municipality provide services,” DuPont said.

Beck explained that the issue isn’t just relevant to the borough, but to municipalities throughout the state.

“We are looking for ways to address this, not just here in Red Bank, but also in more urban areas like Newark and Jersey City,” Beck said.