State Senate Pres. Steven Sweeney, who represents a southern New Jersey district, wants to cut state school aid to districts perceived to be overfunded. These include Jersey City, although local school officials claim that according to state projections previously done to evaluate aid, Jersey City is underfunded.
Jersey City receives about $400 million in state aid, which covers two thirds of its annual budget of slightly more than $600 million. Sweeney’s argument is that other districts around the state feel short-changed, and he would like to redistribute the aid.
State school aid is partly the result of a series of state Supreme Court decisions requiring districts to provide an equal education to all students, whether in suburban or impoverished areas.
Urban districts like Jersey City suffered significantly during the post-World War II era when people moved to the suburbs, leaving cities with large populations of poor people and extremely old buildings that yield low tax revenues.
Sweeney argues that the state has failed to claw back aid after conditions in some of these cities have changed.
He believes that Jersey City receives $175 million more than it should under the state guidelines.
Other critics of Jersey City’s aid point to the fact that Jersey City is the fastest growing city in the state, although much of the development was generated through tax abatements that are exempt from paying school taxes.
Sweeney has introduced legislation that would end a form of school funding that sent $151 million in state aid to Jersey City in 2017-18. The Sweeney bill would eliminate the aid over a five-year period for any city with a payroll tax.
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“The recent utterances of draconian cuts to Jersey City … will decimate Jersey City and cripple our public schools.” – Sudhan Thomas
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Legislation would establish a payroll tax
State Sen. Sandra Cunningham has co-sponsored legislation that would establish a 1 percent payroll tax on businesses in Jersey City.
Originally an idea brought up by members of the Jersey City Board of Education earlier this year to help offset previous loses in state aid, the Cunningham proposal is expected to generate about $70 million in local revenue. Newark already has a similar tax.
The law would apply to any city with a population over 200,000.
“The employer payroll tax is a good way to generate revenue,” Cunningham said.
The bill was co-sponsored by State Sen. and Union City Mayor Brian Stack, who represent parts of Jersey City in the state Senate.
Public employers such as the city of Jersey City or the Jersey City school district would be exempt from paying the payroll tax under this legislation, which also creates a loophole that would allow the city to exempt local business employees who reside in Jersey City.
School officials call cuts draconian
School Board President Sudhan Thomas said the district will fight “any and all measures” aimed at underfunding the school district.
“We will use all available means and are already in full preparation to take on these anti-public education forces to ensure there is a full and permanent settlement ensuring full funding of our public schools, to ensure the constitutionally-mandated thorough and efficient education at risk through these proposed measures,” Thomas said.
The idea of a payroll tax was part of a plan he introduced during recent efforts to balance this year’s school budget, to replace revenue already lost through previous cuts. The district, he said, has lost aid for the last eight years for an estimated total of $1 billion. Last year, the state cut $8.3 million.
“For over eight years – since the advent of the Republican Christie administration – the school funding reform act (SFRA) has never been fully funded, costing Jersey City… about $3,300 per year [per student], totaling about $1 billion in underfunding of Jersey City public schools,” Thomas said.
He said Jersey City’s $2 billion long range facilities plan proposed in 2013 was ignored and never funded by Christie, which has severely impacted Jersey City’s school infrastructure, early childhood capacity fulfillment, and maintenance, among other needs.
“New Jersey now has a Democratic governor and the Democrats control both house of the state legislature. It has been our hope and belief that the mistakes of the last eight years will not be repeated,” Thomas said.
In fact, he hopes that under Gov. Phil Murphy, past errors will be remediated and the Jersey City school restored to full funding.
“The recent utterances of draconian cuts to Jersey City … will decimate Jersey City and cripple our public schools,” Thomas said. “It is important to know that these socially unjust proposals are anti-constitution.”
Thomas suggested that the state modify laws governing tax abatements to allow for schools to be funded.
“Senator Cunningham and Senator Stack have shown exemplary leadership in advocating for Jersey City and we fully support creative measures such as the Cunningham payroll tax initiative to fund our schools,” Thomas said. “But the board’s inability to exercise any control over the revenues portion of the budget impairs our ability to carry out our responsibilities, and this will have to end now.”
Al Sullivan may be reached at asullivan@hudsonreporter.com.
