With state aid to Jersey City Schools falling quickly and federal Covid relief to the city ending, further tax hikes are likely.
Tucked into Governor Murphy’s $53.1 billion spending plan unveiled on Tuesday was another massive cut in state aid to Jersey City schools.
The cuts were not unexpected. “This is close to what I estimated for Jersey City this school year” said Danielle Farrie of the the Education Law Center.
Nonetheless, at $51.1 million, the cut to Jersey City schools would be the largest in the state, dropping total aid to the district from $184 million in 2023 to $133 million for 2024.
Cuts to school aid come at the same time that the city will see federal Covid relief money dry up. Money from the American Rescue Plan was used by the city last year to close a $70 million revenue shortfall.
The city is hoping that an increase in “ratable” taxpaying properties will offset as much as half of lost Covid money. However, increased costs related to such items as health insurance, the “Pompidou x” museum and a possible payment of up to $30 million to city employees who worked during the state of emergency, could make another city tax hike inevitable.
Last year, the average homeowner saw a municipal tax increase of $1,162. That increase was separate from last year’s $1,600 average school tax hike.
The city has taken some steps to reign in spending. In January, the city instituted an incentive program to to encourage workers with 15 or more years of total service to retire early and has reportedly instituted a hiring freeze.
School tax increases have been driven by factors largely beyond the control of the Board of Education and administrators, however. These include Jersey City’s explosive development, changes in state law, and a push by education advocates to fund the schools at an “adequate” level.
In 2018 state legislators voted overwhelmingly in favor of a new school funding formula called S2 which eliminated the “over-aiding” of districts like Jersey City in favor of less affluent districts, like Elizabeth and Paterson.
Newark is an illustration of S2 at work. This year its schools will see state aid increase by $114 million. With a slightly larger population, Newark’s tax base is half that of Jersey City’s. It’s per capita income is substantially lower while its poverty rate is higher.
In 2018, Jersey City enacted a payroll tax, the proceeds from which would go to the schools and help to offset some of the loss in state aid.
But Jersey City Board of Education President Natalia Ioffe places much of the blame city and state. “It is unfortunate that the students of Jersey City Public Schools continue to be neglected by the municipal and state authorities. The payroll tax revenues meant to support our school system still come up short of the original estimates, and there seem to be no mechanisms in place to ensure proper collection of the payroll tax.”
Ioffe said that the acting business administrator and superintendent are preparing a budget “that would be able to cover the bare minimum needs” of the schools. The Board, she said, has also approved an “operational audit” to improve efficiency and transparency.
Education blogger and St. Peter’s University Assistant Professor Brigid D’Souza wants taxpayers to look at the big picture. “It is imperative for the community to understand these cuts in context so that we can support our schools children citywide with fully funded public schools.”
Said Jersey City Schools Superintendent Norma Fernandez, “The loss of $51 million in state aid will impact the district’s ability to meet the constitutional requirements for a thorough and efficient education.”
There may be hope, however, for a restoration of some of this week’s announced cut in school aid. In 2021 the Department of Education found that similar cuts violated a provision of the American Rescue Plan. Said Ward E Councilman James Solomon, “It’s my understanding that this cut violates federal law and should not happen this year.” He added that “It underscores the need to have a sustainable plan to cut costs and waste and add revenue that doesn’t fall on the back of homeowners.”
Photo courtesy of David McElwee