State law recently granted Jersey City the power to implement a payroll tax and set some limits. At the same time, the Jersey City school district is in a funding crisis and is feeling the first effects of reduced state aid, restricted tax increases and the loss of ratables due to tax abatement agreements (PILOTS).
As our City Council considers this tax and options, this is an opportunity to diversify our revenue sources from being mostly dependent on property taxes, while providing some funds to help deal with the school funding crises that has our school district loosing $175 million in state aid over the next few years and encouraging the hiring of Jersey City residents by Jersey City employers. Since the city can exclude Jersey City residents and set the minimum number of employees, this may not effect small businesses, restaurant and other businesses that tend to hire a high number of locals and may only impact the businesses in the large office towers, many of which have tax abatements that do not contribute to our schools, while the city incurs costs due to increased traffic and sewer use. This small tax may not have much of a negative effect as these offices tend to locate in proximity to Wall Street.
If done right this tax could give Jersey City a revenue boost with very little downside and a bonus creating an incentive to hire residents while replacing lost state aid to our schools.
We need our City Council to review, evaluate and act.