Princeton University will help lower-income Princeton residents pay their property tax bills under a settlement agreement that ends the litigation challenging the University's property tax exemptions. The litigation had been scheduled for trial beginning October 17.
Under the agreement, the University will contribute $2 million in 2017 and then $1.6 million a year for the following five years to a fund that will distribute annual payments to Princeton homeowners who received a homestead benefit under the New Jersey Homestead Property Tax Credit Act. The 2017 distributions will establish a maximum amount per household and any excess after making all eligible distributions will be donated to 101: Inc., a non-profit organization that provides need-based scholarships for graduates of Princeton High School attending post-secondary educational institutions other than Princeton University.
In addition, the University will make three contributions of $416,700 to the Witherspoon Jackson Development Corporation, annually from 2017 through 2019. The Witherspoon Jackson Development Corporation is a non-profit entity, and the funds are to be used to aid and facilitate housing and related needs of economically disadvantaged residents in the Witherspoon Jackson neighborhood and elsewhere in Princeton.
The University also agreed to make a $3,480,000 annual voluntary contribution to the town of Princeton in 2021 and again in 2022, the same amount it is scheduled to contribute in 2020, the final year of the University's current seven-year agreement with the municipality.
"Princeton University cares deeply about preserving the diversity of the Princeton community, and the contributions we have agreed to make will help to achieve that," said Princeton President Christopher L. Eisgruber. "We have a long history of contributing to the well-being of our community, not only through our annual unrestricted contributions and targeted contributions for affordable housing, the schools and the library, and community services of various kinds, but in the educational, cultural and other opportunities we provide to members of the community.
"We had every confidence that the courts ultimately would have affirmed the University's continuing eligibility for property tax exemption on buildings and facilities that support its educational, research and service missions, but we concluded that the contributions we will make under the settlement agreement are a better expenditure of funds than continuing to incur the considerable costs of litigation," he said.
Under the agreement between the plaintiffs and the University, the plaintiffs agreed to withdraw their pending complaints for tax years 2011, 2014, 2015 and 2016. The plaintiffs acknowledged that the agreement "is not to be construed as an admission that any of the University's exempt property should be subject to taxation," and they agreed that the settlement "aligns with the University's commitment to supporting the affordability and socioeconomic diversity of the Princeton community."