The truth about tax abatements

by Councilwoman Erin McElroy Barker

July 17, 2026

After the Fanwood Council meeting on Monday, July 13th, 2026, I feel compelled to speak up about what I see happening to our town discourse, specifically pertaining to the current discussion about the short-term tax abatement ordinance. 

Being a Council member is a serious responsibility that I have never taken lightly. The decisions we make affect all of our neighbors, as well as ourselves. But for most of my time, I believed there was always room for discussion and understanding, even when we did not agree. I am afraid that what I have seen over the last year in Fanwood, and in other towns around us, is unfortunately no longer the case. It has become a rather ugly fight of “us vs. them,” with accusations and misinformation rather than respect, 

We collectively spent more than two hours debating the extension of the 2015 short-term tax abatement ordinance at the most recent meeting, yet misinformation still persists about the program. Let me make one thing clear: taxpayers do not pay for funds "lost" to a short-term abatement, because there are no funds lost. 

By law, a short-term abatement still requires the property owner to pay the same taxes on the property in the first year as were paid on the property prior to improvement. That means the taxpayers DO NOT pay more to compensate for lost taxes, as was repeatedly suggested. The taxes are shared with the schools – just like the taxes paid by homeowners. Over the five-year period post-construction, property owners have to pay more each year until they are at full taxation at the new assessed value (on the property as improved) in year six. 

So, neither the town nor the schools lose ANY tax money due to a short-term abatement. And, starting in year 2, they receive significantly more tax revenue from the improved property than they did previously. Anyone claiming otherwise is either misinformed or intentionally spreading false information. 

We all agree that Fanwood no longer needs these types of tax abatements to attract development/investment. That’s why we are sunsetting this program once the remaining projects that are currently in the ground are complete or in 24 months, whichever comes first.

Towns like ours with very few sources of revenue have to rely almost solely on private homeowners for our entire operating budget. That is a huge burden, and one we have fought hard to reduce. During the COVID years, the goal was to reduce tax increases as much as possible to relieve some of the burden all Fanwoodians were feeling at that time. However, the problem then, as now, has been rising costs and few ratables to support the budget. 

The purpose of the short-term abatement program was to stimulate investment along the South Ave corridor. This investment leads to better schools, better home values, better services, and some relief for single-family homeowners. When an abandoned lot that was paying minimal taxes to the town and schools can pay 5-6 times more in taxes by the end of a five-year abatement, that SAVES taxpayers money because that property becomes a new, higher ratable — a source of additional revenue for Fanwood outside of private homeowners.

Of the three short-term tax abatements that exist in Fanwood since the original Ordinance was put in place in 2015, the Fanwood Animal Hospital is the first to have run its full course. The end result is an increase in annual tax payments from $24,877 before the improvements to $42,756 in 2025. Even over the course of the abatement, the borough, schools and county received more in taxes than they would have if the property had not been improved. To be specific, that is $24,536 for the schools, $8,810 for the municipality, and $4,340 for the county – all in new tax revenue that would not have otherwise been received.  

Despite what a small but loud group of individuals continues to claim, I can definitively say that no elected officials in Fanwood benefit personally from development. All of our efforts are aimed at following the law and protecting Fanwood. So, while I am offended by these allegations, it is clear that they are made by people who do not want the actual truth but would rather continue to fuel a version of this story that is either categorically false or misleading at best. 

Having said that, I also understand that development can be a challenging and divisive issue that sparks strong emotions. Development does bring challenges, from traffic to stress on services to changes in neighborhood character, and we are not blind to those. But when considering state affordable housing requirements and the desire to improve our downtown and increase tax revenue, the development of Fanwood’s Downtown has clearly had a positive impact on our community. 

What has been happening in town for the better part of the last year is not productive and respectful discussion. Meeting after meeting, one social media post after another, I see anger, misinformation, and displaced blame, demonizing the Council and fueling discord and division. Some community members (and some who do not even live in Fanwood) have used this issue to support their argument. They are often doing so in a private Facebook group that we are not a part of. As a result, very little productive discussion and no resolution. 

I am sad and frustrated that this is happening in our town, and I do not believe I can change the minds of those who are determined to believe what they believe. But I am still hopeful because I am certain that the vast majority of our residents do not subscribe to these false narratives and are still willing to engage in open-minded, policy-based discussions about Fanwood’s future. As we have said in every council meeting, if you have questions or concerns, we are available. 

Councilwoman Erin McElroy Barker
Fanwood, NJ