New Housing Costs Berkeley Heights Schools $2.5 Million a Year, District Says

Students living in Berkeley Heights' PILOT housing developments are costing the school district approximately $2.5 million a year, according to an updated financial analysis presented to the Board of Education.

PILOT stands for "payment in lieu of taxes." These agreements allow developers to pay the township a negotiated fee instead of standard property taxes. The problem for school districts is straightforward: they typically receive little or none of that money, even as developments add students to school classrooms.

This year, 65 students from PILOT properties are enrolled in Berkeley Heights schools. Twenty-five attend Mary Kay McMillin Early Childhood Center, 17 attend Mountain Park Elementary School, 11 attend Columbia Middle School, and 12 attend Governor Livingston High School.

Business Administrator Jennifer Nicholson prepared the financial breakdown. The annual cost includes $1.9 million based on the district's certified tuition rate for 2026-27, $478,000 in services, $104,000 in busing, and $12,000 in lunch costs, totaling approximately $2.536 million.

Board member Natasha Joly, who chairs the Finance and Facilities Committee, reported the findings and said the district has formally asked to be included in township discussions on a PILOT agreement for the Terrace Two development. The district last heard from the township on September 8.

Board member Sai Akiri raised concerns about the Connell Company's RT500 development, which includes 25 to 30 affordable housing units in one building, with a second building expected to open later this year. Board President Deb Terrero clarified that the Connell development is not a PILOT and pays standard property taxes. The school district is expected to receive about $900,000 from that development in 2027.

The timing of this analysis underscores a challenge many New Jersey school districts face: balancing municipal growth with school funding. For Union County Life readers, the Berkeley Heights situation illustrates how local housing decisions affect school budgets and enrollment planning.

The Union County School Boards Association will hold a panel discussion on PILOTs and municipal-school partnerships on October 14 at Union County Vocational-Technical Schools.

FAQ

Q: What is a PILOT agreement?

A: PILOT stands for "payment in lieu of taxes." These agreements allow developers to pay a negotiated fee to the township instead of paying standard property taxes. While this benefits the municipal budget, school districts typically receive little or none of that money, even though the developments add students to school enrollment.

Q: How many students from PILOT housing are in Berkeley Heights schools?

A: There are 65 students from PILOT properties enrolled this year. They are distributed across all school levels: 25 in early childhood, 17 in elementary, 11 in middle school, and 12 in high school.

Q: How much does PILOT housing cost the Berkeley Heights school district?

A: According to the updated analysis, PILOT housing students cost the district approximately $2.536 million annually. This includes tuition ($1.9 million), services ($478,000), busing ($104,000), and lunch ($12,000).

Q: Is the district trying to change this situation?

A: Yes. The district has formally asked to be included in township discussions on a PILOT agreement for the Terrace Two development. Board member Natasha Joly reported this request and noted that the district last heard from the township on September 8.

Q: Is every new housing development in Berkeley Heights a PILOT?

A: No. The Connell Company's RT500 development, which opened with 25 to 30 affordable housing units, is not a PILOT. It pays standard property taxes, and the school district is expected to receive about $900,000 from this development in 2027.

Q: What can school districts do about PILOTs?

A: The Union County School Boards Association is hosting a panel discussion on PILOTs and municipal-school partnerships on October 14 at Union County Vocational-Technical Schools. This provides an opportunity for districts to discuss strategies and share information.