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Friday, April 18, 2014

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Princeton University to contribute $1 million to Princeton Borough

Contribution for 2006 will be increased each year

Princeton University has agreed to increase its voluntary contribution to Princeton Borough to $1 million in 2006, some $200,000 more than it would have contributed under its existing agreement with the borough.

It will then further increase its contribution each year by the percentage increase in the borough tax rate, and it will also increase its contribution every time it constructs a new tax-exempt building in the borough.

The new contribution plan was announced by University President Shirley M. Tilghman and by Borough Mayor Mildred Trotman. It builds upon an agreement approved by the University and the borough in 2002 that has led to significant increases in the University's contribution over the past four years.

"This year marks the 250th year in which the University has been located in Princeton Borough, and we deeply appreciate the many benefits of living and working in this exceptionally vital and diverse community," Tilghman said. "Over the years we have contributed to the community in many ways, and we are pleased to be able to make this increased financial contribution in recognition of the important stake we have in the vitality of the borough and in the services it provides."

The $1 million contribution is a sum of three component contributions:

  • A voluntary payment of the municipal portion of the property tax that would be paid by McCarter/Berlind Theatres if they were on the tax rolls. The agreement regarding McCarter has been in place since 1987, and it was extended in 2004 to include Berlind. This payment in 2005 was just under $150,000.
  • A voluntary contribution of $250,000 to support borough capital/infrastructure projects that was first made in 2005 at the request of former Mayor Joseph O'Neill. The University agreed last fall to make this contribution again in 2006.
  • A voluntary contribution to the borough's operating budget that under the 2002 agreement increased from just over $100,000 in 2002 to $350,000 in 2005. This contribution was scheduled to increase to $400,000 in 2006.

Under the new agreement, the University will make a total contribution in 2006 of $1 million, and then it will increase its contribution each year by the percentage increase in the borough tax rate. The University also will increase its contribution proportionately whenever it receives a certificate of occupancy for a new tax-exempt building in the borough. In addition, this year it will make a one-time contribution of $65,000 to support borough parks, with $25,000 helping to cover the cost of lighting the Princeton Battle Monument in front of Borough Hall. This latter contribution is made in recognition of Mayor O'Neill's special attachment to that project. (In 2000 the University contributed $300,000 toward the improvement of the Borough Hall park along Monument Drive.)

The University also has agreed to increase its annual contribution to the Fire Department from $5,000 to $20,000, and it will continue to make an annual $35,000 contribution to the First Aid and Rescue Squad. These emergency service agencies assist the residents of both Princeton Borough and Princeton Township.

The University's voluntary contributions are in addition to its annual property tax payments on borough properties, which last year exceeded $3 million and which include properties that might qualify for tax exemption under state law. The University voluntarily leaves all faculty, staff and non-dormitory graduate student housing in the borough and the township on the tax rolls to ensure that the public school system is compensated for any school-aged children who might live in these properties. The University also paid more than $1 million in sewer taxes in 2005, and each year it pays more than $1 million for permits of various kinds.

The first financial transaction between the borough and the University (then the College of New Jersey) occurred in 1756 when the college chose to settle in Princeton, instead of New Brunswick, because the people of Princeton offered a more attractive financial incentive to relocate from Newark. They offered the college a monetary grant of 1,000 pounds, 10 acres of campus lands and 200 woodland acres for fuel. The earliest recorded University financial contribution to the borough was in 1891. In the 1960s the University began making periodic contributions to the borough, and it has made annual contributions in every year since 1972.

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