Trustee Patrick Tolte said the district is monitoring the fiscal risks that can follow long-term payments-in-lieu-of-taxes (PILOT) agreements after he and Assistant Superintendent Will Herman attended an Aug. 12 Nassau County Industrial Development Authority hearing in Mineola.

"Over successive years, this shortfall becomes a funding cliff where the district loses significant revenue," Tolte said, warning that when a PILOT ends and the property transitions to regular property taxes, the shift "does not come with an adjustment to the district's tax base growth factor," which can leave the district unable to raise its levy proportionately.

Tolte told the board the district currently has multiple piloted properties and urged proactive planning: "Ideally, the district would wanna be begin by setting aside funds years before the pilot agreement ends so that we could kind of taper that transition and minimize the impact." He added that the district's ability to set aside reserves is itself constrained.

Assistant Superintendent Will Herman explained the mechanics to the board, saying the tax-base growth factor is "part of the tax-levy formula" and noting that "we have 9 pilots in the district. None of those count towards our growth factor." He said including a property in the growth factor when a PILOT ends, even for one year, would help avoid a revenue hole.

Tolte and other members pressed for legislative changes. Tolte referenced bills he said had passed both chambers in June — "Senate bill s 40 40 b supported by Jack Martins and assembly bill a 7 5 3 2 supported by assemblyman Ed Ra" — and said he did not believe the governor had yet signed the measures. He urged the board to support reforms that would allow school-district representation on IDA boards or otherwise ensure PILOT properties are counted in the growth factor.

Board members debated how PILOTs historically were used for nonprofits and utilities but are now often applied to private residential developments that can add students to districts. Tolte said that while PILOTs "provide a steady and predictable revenue stream during the active years of the agreement," the district should be cautious about offering or relying on long-term PILOTs for luxury residential projects.

Tolte asked the district to consider outreach and education, proposing a public-facing video explaining how PILOTs work and their short- and long-term effects on school finances. "It might be helpful if we produce a video," he said, noting the complexity of the topic for community members.

The board did not take an immediate policy vote on PILOTs at the meeting. Several members acknowledged this is an ongoing legislative and budget-planning issue that the district and regional school boards association are tracking.