Op-Ed: An Open Letter to State Senate President Steve Sweeney

Ellen Simon | May 18, 2018 | Opinion
I'm not begging you for more money for Jersey City schools; I'm begging you for better policy

Ellen Simon
You think Jersey City schools’ dependence on state aid is unfair and unsustainable. As a Jersey City public school parent, a former member of the city’s board of education, and a local activist for increased funding from the city to the schools, I agree with you.

Our local fair share for our schools, under the School Funding Reform Act, is $370 million for 2018. The actual amount Jersey City residents will pay in taxes this year is almost $250 million short of that. Thanks to the shortfall in local funds, our schools remain underfunded by about $100 million a year, nearly $3,300 a pupil below SFRA’s adequacy standards.

But the gap between what we should pay and what we do pay is too large for us to bridge without help from state policymakers. I’m not begging you for more money; I’m begging you for better policy. If you cut the state’s aid for Jersey City’s schools without creating new policies that increase the local contributions to schools, you will only punish our students, seven out of 10 of whom live in poverty.

By your reckoning, Jersey City Public Schools are over-aided by $174 million a year from the state. Our schools, indeed, get $151 million in state adjustment aid, an aid category that was intended, when it began in 2008, to be a 10-year bridge for districts that had been overreliant on the state.

That 10 years is up.

Yet, during that time, the state did nothing to compel the city to increase its local contribution to the schools. Rather than give us a path to increase our local revenue, the Legislature capped school tax increases, with few exceptions, at 2 percent a year. Using that cap, it would take Jersey City 60 years to get to its 2018 local fair share and bridge the gap in our local funding, according to the Education Law Center.

Making things worse

Still, not all the responsibility for underfunding our schools lies with state policymakers. In Jersey City, we’ve managed to take that already limiting cap and make it even worse.

The role of our city’s political machine in school politics means we have, even in recent years, passed school tax increases below 2 percent, and missed opportunities to use the “banked cap,” allowing higher levies to cover increased enrollment or higher pension and health costs.

The Jersey City Board of Education on May 7 passed a budget with a “banked cap” tax increase for an additional $5.3 million in school funds. As far as I can tell, it was the first time the board had passed a tax increase including a banked cap since 2011. Under pressure from the grassroots group New Jersey Together, the measure squeaked by with a vote of 5-4. The “no” votes included a board member who’s a city employee and another whose spouse is a city employee.

Having served on our board from 2014 to 2017, I take my share of responsibility for prior missed opportunities. But I know why they happened. The board, in recent years, has become a hotbed of dysfunction, with outside controversies, ethical missteps, and questionable leadership choices being the rule, rather than the exception.

I can safely say that, during my time on Jersey City’s Board of Education, we spent 10 times longer talking about individual workman’s comp and personnel cases than we did about the tax levy.

Then there’s the city’s government, past and current, which has also been no help.

One-third of Jersey City property, by value, with a market value of $11.4 billion, has a tax abatement, paying nothing to the schools. As permitted by state law, these abated buildings make a payment in lieu of taxes to the city, the city keeps 95 cents on the dollar, gives a nickel to the county, and the schools, to repeat, get nothing.

A perverse incentive

While the payments from abated developers are lower than conventional taxes, the portion the city keeps is higher than it would be under conventional property taxes. This has created a perverse incentive for the city to hand out more abatements.

For instance, the city declared City Hall and its parking lot a blighted area, in need of redevelopment, laying the groundwork for a developer to build on the parking lot — with another tax abatement. For reference, an apartment across the street from this “blighted” area is up for rent at $4,450 a month.

Mayor Steven Fulop ran for office in 2013 promising to use new abatement payments to fund schools. Four years later, he announced, following protests, that 10 percent of future payments in lieu of taxes would go to the schools. But the city’s legal department subsequently issued an analysis saying such revenue sharing wouldn’t be possible under the law. (Interestingly, the legal analysis says the city could use some of its budget surplus for schools. The city has shown no interest in doing so.)

Both state policy and local politics have failed Jersey City’s students.

That’s why we need you. Our local political class has shown no urgency to address our local school underfunding. The state has not only restricted how much we can raise; it’s also created perverse incentives around abatements that starve our schools.

What we need is comprehensive state policy that will compel us, as a city, to step up and fund our schools.

The Legislature can and should:

  • Raise the annual cap for school-tax increases and require an increase at the full amount in districts that are locally underfunded.
  • Require locally underfunded cities with abated property to give an annually increasing portion of city revenue to schools, eventually equal to what the schools would have received had that property been taxed at a conventional rate.
  • Compel locally underfunded cities to use a set portion of any city budget surplus to fund schools.
  • There are other possible tools we could use, including new taxes that would create revenue streams that go directly to schools: New York City has a mansion tax, payable on the sale of homes that cost $1 million or more, as well as a city income tax. Philadelphia has a soda tax that was intended to be earmarked for schools. Any of these would be quite helpful in locally funding Jersey City’s schools. As with the other solutions, our local leadership has proven that if it’s not compulsory, it probably won’t happen.

    Jersey City can do more to fund its schools. That we have not, to date, is a failure of policies at the state level and politics at the city level.

    If the Legislature cuts our funding without giving us the tools we need to address those policy and political failures and raise our local contribution substantially, it will be the cruelest lesson in public negligence the children who depend on Jersey City public schools, who are some of the poorest in the state, ever receive.