JERSEY CITY, NJ - Although touted to help the school district to fill a gap in the school district budget left by cuts in state aid, Mayor Steven Fulop said the city may not be able to deliver on the $82 million raised by the payroll tax.
“Prior to the Board of Education members voting on their budget with a $700 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,” Fulop said in a release this week. “We advised the Board they should request in writing an extension from the state of New Jersey, 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.”
On March 18, members of the Jersey City Board of Education rolled out a tentative $736 million school budget that would impose a 478 percent school tax levy increase. The 2020-2021 budget – if passed as presented would be $98 million more than last year and would raise about $200 million from local taxpayers.
The budget is impacted by a $48 million cut in state aid for this year. But the overall impact resulting from making up for that loss of aid is expected to be much higher. This bad news was compounded by the possible loss on the $83 million in payroll taxes, designed to help the district cope with drastic cuts in state aid.
Last year, the district imposed a 10 percent increase in local taxes, and if the board does not find new revenue or areas elsewhere to cut, taxpayers will have to bear the burden of the gap rather than in the past when state aid made up for most of the district’s budget.
Following an audit commissioned under former Board President Sudhan Thomas, the board managed to avoid layoffs and drastic tax increases, reducing the gap last year from an estimated $100 million less than $50 million.
This was through a reduction in labor without significant layoffs, the elimination of contracts to outside consultants, and a switch in health-coverage allowing the district to self-insure.
“This year, the state cut an additional $87 million in aid,” Thomas said. “That’s why this year’s budget has such a big gap.” Most likely, school officials offered the budget gap will be made up from a combination of layoffs and tax increases.
The district has been struggling for several years to meet budget gaps, last year managing to avert teacher layoffs, but at the expense of other staff.
School officials claim the district has been short-changed when it came to state aid even before Gov. Murphy and other state legislators imposed $175 million in state aid cuts. Under a bi-partisan review panel whose report came out in 2008, the district was supposed to receive $1 million in additional aid yearly. But under former Gov. Chris Christie that increase was withheld, and the Murphy cuts have put the district in a fiscal crisis mode.
The school board canceled its March 26 meeting due to the virus outbreak.
The district has a board caucus meeting scheduled for Monday, April 27 in District Office, 346 Claremont Avenue, and a regular meeting on April 30 Fred W. Martin Center for the Arts (PS #41) 59 Wilkinson Ave.
Both meetings will be streamed live on the district Facebook website.
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