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Jersey City Mayor Steve Fulop, left, is sparring with Senate President Stephen Sweeney over Jersey City tax abatements. (Reena Rose Sibayan | The Jersey Journal)

(Jersey Journal file photo)

Jersey City would be forced to share its tax abatement revenue with the public school district under a bill introduced yesterday by Senate President Stephen Sweeney.

The bill would amend state law governing tax abatements to require municipalities share their abatement revenue with school districts if the municipalities aren't paying what the state considers their "local fair share" to schools.

The legislation, plus a letter Sweeney sent to Jersey City Mayor Steve Fulop Monday and released to the media yesterday, led to a back-and-forth between the two men that was reminiscent of their testy exchanges last year when they were both hoping to run for governor.

At the heart of Sweeney's proposal introduced in the Legislature is what the state defines as a municipality's "local fair share," the amount local taxpayers should be funding the school district. It is calculated using a town's tax base and the average income of its residents.

Jersey City -- where local school taxes are $114 million versus $421 million in state aid -- pays 36 percent of its fair share, coming up about $200 million short. Elsewhere in Hudson County, Bayonne pays 81 percent of its fair share, Secaucus 69 percent and Hoboken 22 percent, according to the state Office of Legislative Services.

A growing chorus of critics statewide has criticized Jersey City for its tax abatement policy -- the council is expected to adopt the 70th abatement of Fulop's term next week -- saying the city's growing tax base should result in more local funding of the city's public schools.

Under Sweeney's legislation, Jersey City, and any other town that doesn't pay its local fair share, would be forced to give some of its payment in lieu of taxes (PILOT) revenue to the school district. As it stands, Jersey City keeps nearly all of the money it receives from tax abatements, giving a tiny portion to the county.

Asked about Sweeney's proposal, city spokeswoman Jennifer Morrill said Fulop is "supportive of changes" to the state's tax abatement law. About Sweeney's four-page letter, in which the senate president says Jersey City's public school district receives $121 million in state aid "to which your booming city is no longer entitled," Morrill was less polite.

"While it took the senate president a week to write this letter and forward it to the press, the mayor is more than happy to debate (the) senate president on this at any time, without him being surrounded by an army of staff to draft memos," Morrill said.

Sweeney spokesman Richard McGrath said the letter "must have hit a nerve to elicit such a defensive reaction."

"But our goal is not to engage in a personal argument with the mayor of Jersey City, it is to correct the faults in the state's school funding system, including the negative impact of tax abatements, to provide full funding for all school districts in New Jersey," McGrath said.

In September, Fulop said he was "open" to allocating some abatement dollars to the school district, an idea Bayonne approved last month. Asked if the mayor would support an idea like Bayonne's, which gives 5 percent of PILOT revenue to its school district, Morrill said no, adding, "Bayonne and Jersey City are entirely different."

Last year Jersey City's PILOT program took in $127,800,476 from tax-abated properties. If all these properties were taxed conventionally, the total would be $211,967,791.