By Sudhan Thomas

The Jersey City Board of Education has received $3,500 less per student per year below the legally mandated full levels since Christie administration took office in 2009. The JCBOE budget was underfunded by about $25 million from 2009 through 2013; the underfunding dramatically increased to more than $100 million each year from 2013, putting the total underfunding in 10 years in excess of $1 billion.

The School Development Authority (SDA), the state agency tasked with funding capital expenses, including repair, modification and replacement of old buildings, underfunded the BOE’s Long Range Facilities Plan (LRFP) in the past 10 years by over $1.1 billion. Between 2013 and 2018, the BOE fund balance went from $75 million in surplus to an operational budget deficit of $100 million.

This $2.1 billion underfunding is a violation of the School Funding Reform Act (SFRA) and runs contrary to New Jersey’s constitutional guarantees of “thorough and efficient education.”

The state was in control of the BOE as a state-administered school district through these years of underfunding. The Christie administration’s 2% school tax levy cap limited the BOE’s ability to increase the school tax, which accounts for 24% of a homeowner’s property tax bill.

In 2018, the school tax was $110 million, accounting for 15% of the annual $630 million budget, with the remaining funding came from state and federal sources. The $630 million budget, however, was still $110 million less than the fully funded level established by the SFRA.

In 2018, the state of New Jersey passed “S2,” which further eliminated $175 million in state adjustment aid from the BOE budget, essentially claiming Jersey City taxpayers had been underfunding their own school budget by $270 million.

The state then proceeded to dump $270 million in the BOE’S bank cap, allowing the BOE to bypass the existing annual 2% school tax levy cap. The BOE has three years through 2021, per bank cap regulations, to increase the school tax as much as $380 million, which could increase a homeowner’s property tax by 60%.

A payroll tax projected to collect $80 million annually was hurriedly introduced to pay for this $175 million cut. The payroll tax was supposed to pay each year’s adjustment aid cut and escrow the remaining collection to pay for the future year’s adjustment aid cuts, expected to run out in nine years.

Why the BOE chose not to contest the budget cuts totaling over $2.1 billion starting in 2009 is a $2.1 billion mystery! This massive $ 2.1 billion underfunding, $175 million adjustment aid cut is finally now the subject of a comprehensive law suit- constitutional challenge filed by the JCBOE against the State of New Jersey in April, 2019.

The state responded by trying to get a summary judgement dismissal of the BOE lawsuit which Judge Mary Jacobson, Superior Court, Mercer County, denied in January, 2020 thereby allowing the lawsuit to proceed to trial.

The BOE has since pursued an all-encompassing approach in taking lead on the funding challenges and since 2018 has created over $65 million in savings to cut the carry-forward deficit from $100 million to $50 million.

The state, however, has increased the adjustment aid cut to $240 million from the original $175 million dramatically increasing each year’s state aid cut by an average $ 30 million. This would deplete the payroll tax escrow in four years instead of the projected nine years.

The BOE currently faces a $150 million funding gap. The BOE adopted a fully balanced budget with a $50 million increase in the school tax levy, but the mayor’s decertification of the $86 million payroll tax commitment -- citing COVID-19 -- creates an existential threat to the BOE’s ability to afford thorough and efficient education. The potential of 1,200 layoffs looms ahead, which will eviscerate the school district. A dire situation which needs immediate and urgent redress.

Superintendent Franklin Walker and BOE President Lorenzo Richardson are experienced and capable leaders. The city should come together in this pandemic moment of grief and uncertainty to cure the epidemic of BOE full funding to ensure the 30,000 children of Jersey City have a real shot at the American dream.

Sudhan Thomas is a Community Organizer / Civic Activist – Former President, Jersey City, Board of Education - Former Director , New Jersey School Boards Association

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