Princeton University

Local Contributions

Princeton University is committed to ensuring the success of the greater Princeton community and contributes greatly to the overall economic growth of New Jersey. The University’s Office of Community and State Affairs serves to manage important town/gown relationships and to work with state and local governments on University issues. Princeton University nurtures these partnerships through this work and the contribution of millions of dollars annually to local communities.

Community Contributions 2004–05

Property tax payments. The University owns approximately 4,000 acres for commercial and academic use in several central New Jersey municipalities, with significant holdings in Princeton Borough, Princeton Township, West Windsor Township, Plainsboro Township, and South Brunswick Township. Most of the academic properties are located in Princeton Borough and Princeton Township, which serve as hosts to the University’s main campus (500 acres). The following chart includes property and sewer tax paid:

Total local taxes paid: approximately $9 million

• The University is the largest taxpayer in both Princeton Borough and Princeton Township. In total, the University pays 12.33 percent of the net assessed valuation in the two communities (4.08 percent in the township and 8.34 percent in the borough; 400 times greater than the next largest taxpayer in the borough and five times greater than the next largest taxpayer in the township).

• In the borough, the University and one other charitable non-profit institution are in a special “large-user” category of water usage and pay sewer taxes at a rate that is 3.5 times the rate paid by a homeowner.

Voluntary property tax payments on University housing. The total tax payment in both Princeton Borough and Princeton Township included hundreds of thousands of dollars in taxes on housing for faculty, staff (including the official residence of the University president), and graduate students. This is housing that might qualify for tax exemption under New Jersey state law. Taxes were paid in full on these residential properties—voluntarily—in order to ensure that the public school system would be compensated for school-aged children who might have dwelt in University-owned housing. In Princeton Borough, for example, it is estimated that the University paid more than $2 million in 2005 taxes on properties that might qualify for tax exemption under New Jersey state law.

Property tax payments on certain athletic facilities. The University paid more than $500,000 in 2005 property taxes on certain athletic facilities, including Princeton Stadium.

Removing buildings from the tax rolls. The University’s policy is to remove a building from the tax rolls only when 100 percent of the building is used for educational purposes. This is a voluntary gesture, because state law exempts colleges and universities from paying taxes on any portion of a building used for academic purposes. In addition, when a University property is removed from the tax rolls (a 100-percent academic building), the University, instead of abruptly ceasing all payments, will phase out or pay down the tax payments over a 10-year period. Again, this is a voluntary, and not a mandated, procedure.

Payments for infrastructure improvements. The University spent about $160,000 to maintain 8.5 miles of private roads it opens to the public. The University also paid $16,000 to light Prospect Avenue. During the past decade, more than $2.5 million has been spent on crosswalk and road improvements for the benefit of the public.

Payments for maintenance of and improvements to publicly used facilities. The University annually spends hundreds of thousands of dollars for the maintenance of University-owned but publicly used facilities such as McCarter Theatre, an internationally renowned, Tony-award-winning regional arts facility. A few years ago, the University paid more than $2 million to renovate the Princeton Garden Theatre, the borough’s only movie theater. Its renovation was a major contribution toward the vitality of the downtown area and the quality of life for Princeton residents. Also, the upkeep of and renovations to the University train station, home to the ‘’Dinky’’ shuttle train, including the construction of an adjacent parking lot, have cost the University more than $1.2 million since 1985. As well, the Historical Society of Princeton doesn’t pay any rent to use a University-owned building on Nassau Street in the heart of Princeton Borough.

Voluntary contribution to municipality. The University every year makes voluntary cash contributions to Princeton Borough. In 2005, the total non-tax voluntary contribution in the borough was $819,000. This amount includes a one-time donation of $250,000 for infrastructure improvements on borough-owned roads; $60,000 for affordable housing as per a special affordable housing agreement (see below); $159,000 payment on behalf of the McCarter Theatre Center, which is off the tax rolls, but which the University owns and agreed to pay the municipal portion of the taxes; and a general contribution of $350,000. The township received $60,000 for its affordable housing program (see below). These contributions were, of course, in addition to the cash contribution of hundreds of thousands of dollars the University made to each municipality when the University voluntarily left certain residential properties on the tax rolls.

Affordable housing contributions. The University pays both Princeton Borough and Princeton Township a contractual contribution earmarked for affordable housing. An agreement for both communities resulted in the following donations to the two communities’ affordable housing funds: $80,000 in 2001, $90,000 in 2002, $100,000 in 2003, $110,000 in 2004, and $120,000 in 2005. The University’s contributions to affordable housing in both cash and land gifts amounted to an estimated $1.4 million since 1990.

Service support and special gifts, 1995–2005. The University has contributed more than $11.2 million in special gifts to municipalities and community organizations, including:

• $1.4 million to the United Way since 1995.

• $1 million for cultural enrichment programs for the children of 9/11 victims and scholarships for students at the John Jay College of Criminal Justice, which trains firefighters and police officers.

• $680,000 to assorted area charities in grants and memberships (the University has donated approximately $70,000 per year).

• $500,000 to the Princeton Public Library.

• $500,000 to Princeton Regional Schools.

• $490,000 to the University Medical Center at Princeton (which is not part of Princeton University), including capital campaign gifts and annual contributions to its operating budget.

• $490,000 for emergency services, fire, and first aid (a $40,000 annual gift), including the purchase of a new rescue vehicle in 2001 for $155,000.

• $250,000 for infrastructure improvements in the borough.

• $300,000 to Princeton Borough for park redevelopment at Monument Drive.

• $282,000 to Princeton Township for infrastructure and sewer projects.

• $200,000 to the Trenton Economic Development Corporation.

• $150,000 to Princeton Borough for the Downtown Library Plaza Redevelopment.

• $100,000 to the Arts Council of Princeton for a new building.

• $100,000 to Princeton Township for open space preservation at the Institute Woods.

• $50,000 to the Princeton YWCA capital campaign.

• $50,000 to the Princeton Charter School.

• $30,000 to Princeton Community Housing for the expansion of Elm Court.

• $30,000 to the community New Year’s Eve celebration.

• $25,000 to the Princeton Regional School Foundation.

• $2.5 million in in-kind donations to various community nonprofit groups and the municipality—excluding the McCarter Theatre Center and the University Medical Center at Princeton. For example, the University provides free Internet access in various public locations. Also, qualifying Princeton High School students are allowed to enroll in University classes (at current tuition costs for 45 young people, this gift is worth an estimated $180,000 annually). Last year, the University committed to an extensive Princeton Township reforestation program at a cost of $450,000.

Regional Economic Impact

With approximately 5,400 benefits-eligible employees, Princeton University is one of the largest private employers in central New Jersey. The institution’s overall regional economic impact amounted to $2 billion for 2004–2005 (FY’05). This is based on the University’s total expenditures of approximately $920 million ($850 million plus $70 million for the Princeton Plasma Physics Laboratory), along with the expenditures of more than 550,000 people attending events throughout the year on campus and the expenditures of the thousands of students and employees. Included in these statistics is the $23-million economic impact of the nationally acclaimed McCarter Theatre Center, whose facility is owned by the University (McCarter programming drew approximately 170,000 visitors last year, with an operating budget of $10.3 million and approximately 150 full- and part-time employees).

The University strives to purchase goods and services in New Jersey as much as possible. Approximately 80 percent of the $196.2 million spent on capital construction ($171.5 million) and major maintenance ($24.7 million) in 2004–05 went to New Jersey firms; and about half of the $127 million spent on non-construction purchases in 2004–05 went to New Jersey firms.

Serving as a major employment center with a total payroll of $492.9 million, Princeton was the source of approximately $12.3 million in New Jersey state income tax revenue from those on the University payroll. In addition, the University’s intense economic activity created employment opportunities off campus at businesses and industries whose economic health is linked to the University. The non-University job-generation impact from University-related activities was estimated to be 11,000 jobs in 2004–05.

Princeton University continued to play an important role in attracting prestigious international, tax-paying corporations to central New Jersey, particularly to the University-developed Forrestal Center properties in Plainsboro and South Brunswick. These lands feature premier office, retail, and residential space as well as academic space, with an approximate assessed valuation of $1.3 billion in Plainsboro and South Brunswick. The total Forrestal acreage in the two towns amounts to 2,023 acres, 630 of which the University has developed but no longer owns. More than one third of the original Forrestal acreage has been preserved as permanent open space. The Forrestal Center project has been lauded throughout the state as an example of responsible land- use planning and quality development.

The University also has helped spur the high-tech alley on U.S. Route 1 by helping to create hundreds of new jobs through research and development. For example, the University’s multidisciplinary research centers, including the Princeton Institute for the Science and Technology of Materials (PRISM), have formed research and development partnerships with approximately 275 New Jersey-based companies (including 60 start-ups) and entrepreneurs in a wide array of fields, ranging from aviation and environmental monitoring to medicine and telecommunications.

Princeton is also committing substantial resources to propel its engineering school into the top five in the nation. The strategic plan for the School of Engineering and Applied Science (SEAS) clearly identifies the school’s further engagement and collaboration with industry, and it has launched an aggressive outreach effort to the venture and investment communities.

According to the Moody’s Investor Service Municipal Credit Research report, the University’s positive effect on the local economy and the stability of its presence is the dominant factor in the Triple A bond rating for Princeton Township and the Princeton Regional School District, and the Double A bond rating for Princeton Borough.

Expenditures, 2004–05

• Total expenditures: $920 million ($850 million plus $70 million for the Princeton Plasma Physics Laboratory [PPPL])

• Total payroll: $492.9 million

• Construction spending: $196.2 million; in the past decade, spending has been more than $1 billion on 500 significant projects and hundreds of small renovations

Employment, 2004–05

• Total number of benefits-eligible employees: 5,400

• New Jersey state income taxes paid by University employees: $12.3 million

Visitors, 2004–05

Estimated total: 550,000, including five top attractions: athletic events, 250,000; the McCarter Theatre Center, 170,000; other concerts and performances, 100,000; the Art Museum, 95,750; summer events (non-alumni-related conferences, camps, and academic programs), 36,000; Orange Key tours, 26,000; alumni-related events, 22,000 (includes Reunions Weekend and Alumni Day); Firestone Library, 18,500; Commencement, 8,000 to 10,000; Cotsen Children’s Library, 6,750; and the Princeton Plasma Physics Laboratory (PPPL), 2,200.