Jersey City school district faces loss of funding

$736 million budget introduced for district

Superintendent Franklin Walker presented a $736 million budget to the board of education at an emergency meeting in March.
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Superintendent Franklin Walker presented a $736 million budget to the board of education at an emergency meeting in March.

According to the city, the $86 million in payroll tax revenue the city had announced the Jersey City school district would receive can’t be guaranteed because of the economic impact caused by the ongoing coronavirus pandemic.

State Sen. Sandra Cunningham introduced legislation last year, which was signed into law by Gov. Phil Murphy, allowing Jersey City to implement a payroll tax to help offset the cost of cuts in school funding.

The payroll tax ordinance, which was approved by the council in November 2018 and went into effect in January 2019, imposes a 1 percent payroll tax on an employer’s gross payroll to benefit Jersey City public schools. Employers are required to file and pay the new tax on a quarterly basis.

$736 million budget

The Board of Education voted 8-1 to approve a $736 million budget for the 2020-2021 school year at an emergency meeting in March on the same day the city informed the board it could not certify the payroll tax.

“Prior to the Board of Education members voting on their budget with a $700 [per household] tax increase, the city notified the Board of Education in writing that due to the Coronavirus it could not certify a payroll tax amount, as no government in the country would have visibility into that number in light of the current situation,” said city spokesperson Kimberly Wallace-Scalcione.

“We advised the Board they should request in writing an extension from the state of NJ, because voting on a budget without clarity of a payroll tax number would do further damage to residents of Jersey City. The Board members acknowledged they were in receipt of our message before their meeting that the payroll tax couldn’t be certified, and nevertheless decided to vote anyway on a budget with question marks.”

The school board had sought an extension to file the budget with the county, given the extenuating circumstances caused by the virus, but was forced to take a vote to submit the budget by the deadline because they were unable to receive one.

The introduced budget of $736 million includes a roughly $64 million increase in the school tax levy compared to the previous academic year.

The school district faces a loss of more than $175 million in state aid over the next five years due to changes in the state’s school funding formula. The district, which educates more than 30,000 students in more than 40 schools, lost $27 million in state aid last year alone. The cuts have continued to increase with the recent announcement of an adjusted state aid formula where Jersey City saw more funding cuts than any other school district for two years in a row.

According to Superintendent of Schools Dr. Franklin Walker, the district also faces increased healthcare costs and allocation to charter schools.

“This year, we have an increased allocation to our charter schools of over $13 million while at the same time, the cost of operating a service organization continues to increase in salaries for teachers, nurses, custodial, security, medical benefits, the maintenance of old school buildings and the cost of operating,” Walker said.

Walker said that while the school administration is asking for $50 million, “$30 million-plus is based upon a deficit that we carried over. So in all reality, the only thing that I’m asking for this administration is basically $11 million to reinvest in our students going forward.”

107 full-time positions, mostly new math and language arts support, are also part of the budget.

“Most of our kids have never experienced a day in a fully-funded school,” said resident Nancy Pokler who phoned in to the meeting for public comment. “They have been waiting and waiting and doing without the basics and operating in crisis mode for so long they should not have to wait or do without any longer; they need you to act now. We believe Mr. Walker can lead us to success, but he can’t do it with a budget that values our schools This board must have the courage to empower him with this budget.”

Proposed tax increase

To help fund public schools, the district will raise taxes using the bank cap.

By state law, this tax levy is subject to a two-percent cap, but this isn’t a hard cap because if a district doesn’t raise taxes as much as it is allowed to in a given year, it can hold onto the unused funds in a Levy Cap Bank and use it later.

In Jersey City, the district could impose a 47 percent increase to the school tax levy from $136 million to $200 million.

That means the owner of a home with an average assessed value of about $452,000 would pay an extra $688 in school taxes next year.

During the meeting, Trustee Mussab Ali said that it would be equal to less than $50 per month for an average household in Jersey City.

The board will now make changes to the budget before it is finalized and submitted to the state in May.

Jersey City residents could also see a tax increase in the municipal portion of their tax bill because of the more than $70 million budget gap the city currently estimates it is facing due to loss of revenue and emergency spending because of the pandemic.

The city had introduced a $613.9 million budget which aimed to keep taxes stable, but it is currently being reevaluated due to the virus.

For updates on this and other stories check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Marilyn Baer can be reached at Marilynb@hudsonreporter.com.