The Princeton Council and Princeton University have reached an agreement to continue the university’s voluntary financial contribution to the town for the next two years.
The council approved a resolution to extend the initial agreement, which was reached in 2014 and expires this year. The new agreement will cover 2021 and 2022, at which point the two parties may negotiate another agreement.
Under state law, Princeton University is a tax-exempt entity, which means it does not have to pay property taxes on some of its properties because it is an educational institution. The university does pay property taxes on other parcels.
The resolution was approved unanimously by the Princeton Council at its Dec. 14 meeting. Mayor Liz Lempert, whose husband is a Princeton University professor, recused herself while the agreement was discussed and approved.
The two-year agreement is the result of a year-long discussion between Princeton University and municipal representatives, said Princeton Councilwoman Ever Niedergang. She served on the town’s negotiations team with Princeton Councilwoman Michelle Pirone Lambros and Administrator Marc Dashield.
“This agreement continues the pattern of a 4% increase in the voluntary payment in each year of the contract for the next two years. It affirms the university’s commitment to the well-being of the municipality and its taxpayers,” Niedergang said. “The Princeton Council believes this short-term agreement is one key step in continuing to build a relationship with the university, focused on our shared mutual interests in maintaining the town’s fiscal health, diversity of population and thriving downtown.”
Under the terms of the agreement, Princeton University will voluntarily contribute $3.6 million in 2021 and $3.7 million in 2022 to the municipality. The combined $8.4 million will be used by the town in any way that it sees fit.
In a carry-over from the original six-year voluntary contribution agreement, Princeton University will contribute $250,000 toward the construction of a proposed Department of Public Works facility on River Road.
The Princeton Department of Public Works is divided between two locations – the Princeton Public Works maintenance garage on North Harrison Street near Nassau Street, and the Princeton Public Works annex at the end of John Street, near the Community Park School.
Princeton University also will contribute $550,000 in 2020, $150,000 in 2021 and $150,000 in 2022 to support the town’s new combination career and volunteer Princeton Fire Department. Until this year, the 232-year-old Princeton Fire Department was an all-volunteer group. Six full-time paid firefighters have been hired to supplement the volunteers.
Pirone Lambros said the university’s support for the combination career/volunteer Princeton Fire Department is “vital.”
“The financial support helps to provide the municipality with funding toward the critical needs of our fire department to be on the ready for any emergency. It will help to continue to maintain our readiness,” Pirone Lambros said.
The Princeton Fire Department has responded more quickly to calls for help since the town hired the six paid firefighters, she said. Teams of two firefighters are on duty at the Princeton Fire Department around the clock to respond to emergencies, along with the volunteer firefighters.
“Overall, a Princeton that has economic, sustainability and socio-economic diversity is a stronger town. We believe our relationship with the university will help to achieve and build our shared vision,” she said.
Princeton University President Christopher Eisgruber agreed. The town and the university worked collaboratively to meet many challenges during the COVID-19 pandemic, and the extension of the voluntary contribution agreement is a “further reflection of the university’s ongoing support for the community,” he said.
Since the current agreement was approved in 2014, Princeton University has contributed more than $21.8 million to support municipal operations.
In addition to the voluntary contributions, Princeton University is the largest taxpayer in the Municipality of Princeton. In 2019, it paid $11.6 million in property and sewer taxes to the town. At least $6 million of the university’s annual tax payments to Princeton are made voluntarily on properties that qualify for tax exemption under state law.
